Smart Retries vs a Fixed Retry Schedule: Which Recovers More?

When a card payment fails, Stripe offers two options to attempt a retry: Smart Retries and a fixed retry schedule. The fixed schedule, also known as payment retry logic, involves predetermined dates and timeframes for retry attempts. In contrast, Smart Retries is an AI-driven model that determines the optimal time to retry failed payments.

According to Stripe, Smart Retries are more effective than a fixed schedule. The model analyzes factors such as the number of devices that have used a payment method in the past few hours and the time of day, learning from new transactions across Stripe. This targeted approach, utilizing machine learning, aims to increase the likelihood of successful payments compared to traditional, rules-based retry logic.

However, neither Stripe's guidance nor its recovery percentage provides explicit data on the performance of Smart Retries versus a fixed schedule.

A soft decline happens when a card payment is refused but the card may still be usable for future attempts. Timing can influence the outcome in such cases. For instance, a soft decline might clear if the customer's account balance changes or if they take a specific action. In contrast, a hard decline or a situation where the customer needs to replace the card will not clear regardless of timing, as the card is deemed irredeemable.

Stripe's Smart Retries offer a more dynamic approach to retry scheduling. Instead of adhering to a fixed calendar (e.g., day 1, day 3, and day 7), Smart Retries makes decisions based on the specific circumstances of each failed payment attempt. This adaptability allows for a more personalized and effective retry strategy, potentially leading to higher recovery rates.

Nonetheless, the exact recovery percentage attributed to Smart Retries remains unspecified in Stripe's documentation, leaving room for further investigation and analysis.