Grace Period Policy Template: Copy-Paste Rules

A grace period that exists only inside your billing settings is not a policy — it is a rumour your subscribers cannot read. When a payment fails, the questions arrive immediately: do I still have access, how long do I have, what happens next? This grace period policy template gives you the exact words to answer them: a customer-facing policy you can copy and adapt, the internal rules that sit behind it, and the edge cases to settle before they settle themselves, badly, in a support thread.

The thinking behind grace lengths and structures is covered in the subscription grace periods guide. This page is the wording layer, and it is designed to sit inside the wider subscription billing policy template if you publish one combined policy.

The customer-facing policy (copy-paste)

Replace the bracketed items with your own details. Everything else can be published as written.

What happens if your payment fails

"If we cannot collect a payment from the card on file, your subscription does not end straight away. You enter what we call a grace period, and here is exactly how it works.

Your access continues. During the grace period you keep full access to [Product] — your account, your data, and everything you have created with it. Nothing is held back while we sort the payment out.

We will try again, and we will tell you. Over the next [16] days we will retry the card on file a small number of times, and we will email you [and text you, if you have opted in] when a payment fails and before the grace period ends. Most failed payments are an expired card or a temporary problem with the bank, so in most cases updating your card is all it takes.

Updating your card ends the process immediately. As soon as a payment succeeds — or you add a new card and it is charged successfully — your subscription returns to normal, your billing date stays the same, and the grace period is over. There are no late fees and no penalty charges from us for a failed payment.

If the grace period ends. If we still cannot collect payment when the grace period ends on [day/date calculation, for example 'the 17th day after the failed payment'], your subscription will be paused: you will not be charged again, and access to [paid features] will stop until a payment succeeds. Your account and data are kept for [90] days after that, and you can restart at any time by updating your card. After [90] days, paused accounts and their data may be deleted.

You can always cancel instead. A grace period is never a trap. You can cancel at any time during it, from your account page, and cancelling stops all further retries straight away."

The internal rule table behind the words

The published policy makes promises; this table is how operations keeps them. Settle every row before the policy goes live, because a row left vague here becomes an inconsistency a subscriber will eventually screenshot.

Rule	Monthly plans	Annual plans	Notes
Grace length	16 days from the failed payment	16 days, extendable to 21 by support for a billing-contact issue	One number per plan type. Two numbers invite disputes about which applied.
Access during grace	Full access, no feature restriction	Full access	If your product restricts access instead, the customer wording must say so plainly — never promise full access and deliver a paywall.
Retry cadence	Up to 6 attempts across the grace period, decline-aware; hard declines never retried	Same, with attempts weighted to the strongest payment windows	The customer wording says "a small number of times" on purpose; the internal cadence can be tuned without republishing the policy.
Outreach cadence	Email on failure, mid-grace, and before the end; SMS where opted in	Same, plus a personal outreach for high-value accounts	Every promised notification is a deliverability obligation. Promise only what the sequence actually sends.
Fees	None	None	If you do charge late fees anywhere, they must appear in the customer wording with the amount. Silence plus a fee is the fastest route to a chargeback.
End of grace	Subscription paused, no further charges, data held 90 days	Subscription paused; remaining prepaid time handled per the refund rule below	"Paused" and "cancelled" must mean the same thing in the billing system, the product, and the policy. Pick the true word.
Restart	Card update plus successful charge restores access immediately, original billing date retained	Same	Retaining the original billing date avoids silent cycle drift, which subscribers read as being charged early.
Cancellation during grace	Stops retries immediately, access ends per the standard cancellation rule	Same	Non-negotiable, and stated in the policy. A retry placed after a cancellation is a trust-destroying error, not a recovery tactic.

Edge cases to settle before you publish

• Trials. Decide whether a failed first charge after a trial gets the same grace or a shorter one, and say which in the trial terms. A trialist whose first charge fails has no usage history to protect, but they do have an expectation set at signup — meet the one you set.
• Partial payments and split payments. If your processor collects part of an amount, state whether the grace clock stops, restarts, or continues. The defensible default: grace continues until the full amount is collected, and the subscriber can see the outstanding balance in their account at all times.
• Annual plans and refunds. When an annual subscription ends at grace expiry, decide what happens to any prepaid period beyond the failure. Whatever you decide, it belongs in the policy in one sentence — this is the edge case most likely to produce a dispute.
• Card updated, charge still fails. A new card can fail too. The grace clock does not reset on a card update; it resets on a successful payment. Say so internally, and make sure support does not promise otherwise.
• Subscriber disputes the charge mid-grace. A dispute pauses your recovery activity for that payment by necessity. Document the handoff: dunning stops, the dispute process owns the account, and winback does not touch the subscriber until it resolves.
• Price changes mid-grace. The retry attempts the amount that was due when the payment failed, not a newly announced price. Charging more than the failed invoice, mid-recovery, without fresh consent is both a policy breach and a conversion killer.
• Regulated or usage-billed add-ons. If part of the bill is metered, state whether grace covers the whole account or the base subscription only, and what happens to the metered balance at pause.

Grace only matters if the recovery inside it works — across the market, involuntary churn is an estimated 20–40% of subscriber churn, according to Recurly research, and the grace window is where that churn is won or lost. Estimate the value sitting inside your own window with the recovery calculator, and sanity-check your recovered share against the failed payment recovery benchmarks before you lengthen or shorten the period on instinct.

Adaptation rules that keep the template honest

• Every date in the policy must be computable by the subscriber. "17th day after the failed payment" passes; "a reasonable period" fails.
• Never promise notifications you do not send. Audit the policy against the live sequence once a quarter. Policy drift and sequence drift meet in the support inbox.
• Keep fees, holds, and deletions in the same type size as everything else. A grace policy written to be skimmed past its consequences is a future chargeback with a preamble.
• One policy, every surface. The help centre, the dunning emails, and the account page quote the same numbers. Where they disagree, subscribers believe the worst version — and they are usually right to.

The bottom line

A good grace policy is a promise with dates in it: access continues, retries happen a small number of times, updates fix it instantly, and the end — when it comes — is a pause with a way back, never a surprise deletion. Publish the words above, settle the internal table and the edge cases behind them, and audit the two against each other quarterly. If you want the recovery work inside the grace window itself handled — decline-aware retries, branded emails, and SMS in one sequence for a flat $179/mo — the next step is the plan and its 14-day trial on the pricing page.

Frequently asked questions

How long should a subscription grace period be?

Long enough to contain a full recovery sequence — commonly around two weeks — and short enough that the end date feels real. The template uses 16 days, which fits up to six decline-aware retry attempts plus outreach, but the right length for your business depends on your billing cycle and product, as long as it is one stated number applied consistently.

Should subscribers keep full access during grace?

That is a product decision, but it must be an honest one: whatever the policy promises, the product must deliver. Full access during grace is the more generous and simpler model, and it protects the relationship you are trying to recover. If you restrict access, say exactly what is restricted, in plain words, in the policy.

Does updating a card restart the grace period?

No. The grace period ends when a payment succeeds, not when a card changes. A new card can fail as well, and resetting the clock on every update would let a failing account drift indefinitely. Make this rule clear internally so support never promises a reset.

What happens when the grace period ends?

Under this template, the subscription is paused: no further charges, paid access stops, and the account and its data are held for a stated period — 90 days in the template — during which the subscriber can restart by updating their card. State the hold period in the policy and honour it exactly.

Can a subscriber cancel during a grace period?

Yes, always, and cancelling must stop all retries immediately. A grace period that makes leaving harder than staying is not a recovery tool, it is a trap, and subscribers treat it as one. State the right to cancel inside the policy itself, as the template does.