Implement smart retry dunning logic for failed subscription renewals

Steps

1. Intercept the invoice.payment_failed webhook and inspect the last payment error code to classify the failure as soft (retry-able) or hard (do not retry).
2. For soft declines, implement an exponential backoff retry schedule (e.g., retry after 1 day, 3 days, 7 days) using your payment platform's built-in retry settings or a scheduled job.
3. For hard declines (invalid card, stolen card, do not honor with no retry indicator), immediately suspend the subscription and send a payment update notification to the customer.
4. Send in-app and email notifications before each retry attempt with a direct link to the customer portal where they can update their payment method.
5. After the final retry attempt fails, trigger a cancellation flow and provide a grace period during which the customer can reactivate with a new payment method.
6. Log each retry attempt with the decline code, retry number, and timestamp for support and analytics.