# HarborMug Gift Club: cancellation and payment recovery

Adopt a short, reason-led cancellation journey and a separate payment-recovery process. At the supplied targets, the model retains **13 customers per monthly cohort**, equivalent to **$312 in product MRR** before discounts. Shipping charges are **$65 separately**. First-cycle product revenue after the modeled discount is **$283.20**; contribution after product and shipping costs is **$192.20**, before other expenses.

The business data is synthetic and Gift Club is a proposed service. These are completed designs and modeled estimates, not measured results or implemented account changes. Customer copy is in English because no other target language was supplied. 🟡 denotes a modeled estimate; 🔴 denotes a planning assumption. Merchant terms are supplied inputs, not externally verified benchmarks.

## Decision and economics

The current journey cancels instantly without collecting reasons or sending confirmation; there is no dunning. Preserve easy cancellation while adding one question, at most one relevant optional offer, explicit confirmation, and an immediate receipt. Do not introduce support approval for cancellation. Work on payment recovery alongside the cancellation flow: its modeled product opportunity is $168/month versus $144/month for voluntary saves.

| Monthly cohort model | Calculation | Result 🟡 |
|---|---|---:|
| Subscribers | $24,000 / $24 | 1,000 |
| Gross churn | 1,000 × 5% | 50 |
| Voluntary losses | 50 × 60% | 30 |
| Payment-failure losses | 50 × 40% | 20 |
| Paid voluntary saves | 30 × 20% | 6 |
| Payment recoveries | 20 × 35% | 7 |
| Product MRR retained | (6 + 7) × $24 | $312 |
| Separate shipping charges | 13 × $5 | $65 |
| Remaining monthly churn | (50 − 13) / 1,000 | 3.7% |
| Annualized product run rate | $312 × 12 | $3,744 |

The annualized figure assumes a retained cohort continues for twelve months at full price. It is not a twelve-month cash forecast, compounding forecast, or lifetime value. No winback revenue is assumed. Pauses produce no revenue while paused and do not qualify as paid saves until a successful resumed payment. Reason frequencies and actual acceptance rates were not supplied, so the 20% target is not a prediction supported by an offer mix.

At full price, each shipment collects $24 product revenue plus $5 shipping, incurs $8 product cost and $4 shipping cost, and contributes **$17** before payment fees, returns, taxes, support and acquisition costs. Discounted shipments collect **$19.20 + $5 = $24.20** and contribute **$12.20**. Shipping contributes $1 per shipped order; it is not product MRR.

For conservative costing, assume all six paid saves receive the discount and all seven recoveries pay full price. First cycle: product revenue $283.20; shipping charges $65; collections $348.20; product cost $104; shipping cost $52; contribution **$192.20**. Across two paid cycles for the same retained cohort: product revenue **$566.40**, shipping charges **$130**, contribution **$384.40**. These figures assume both shipments occur and no subsequent churn. Full-price contribution resumes at $221 per cycle for 13 customers after the offer expires.

Reserve the entire **$9.60** offer liability at acceptance. Six discounts cost $57.60 across two shipments, within the $200 monthly offer budget. A conservative monthly cap is **20 new grants** ($192 committed), subject to existing commitments; never round up to 21 ($201.60). Budget allocation, eligibility and acceptance must be atomic. The offer code is an internal rule identifier, not a public coupon.

## Completed cancellation journey

`Subscription settings → Reason → One eligible relevant offer (or skip) → Confirm cancellation → Receipt + email`

All proposed routes below are design destinations, not live links. Use accessible radio controls, visible labels, keyboard focus, inline errors and comfortably sized touch targets. Give acceptance and rejection comparable visual weight. No timers, preselected consent, or repeat offers after rejection.

**1. Settings — `/subscription`**

“HarborMug Gift Club · $24 per monthly shipment + $5 shipping = $29. Next renewal: December 3, 2026.”

Buttons: **Manage subscription** · **Cancel subscription**. Clicking cancel opens the reason screen directly; no separate intercept page.

**2. Reason — `/subscription/cancel/reason`**

“What’s the main reason you’re cancelling?” Select one reason. Optional field: “Anything else you’d like us to know?” Button: **Continue**. Error if empty: “Please select one reason. You can choose ‘Prefer not to say.’” Free text is never required.

| Radio label | Exactly one disposition |
|---|---|
| It costs too much | Approved discount if eligible; otherwise skip |
| I have more mugs than I need | One-cycle pause |
| My gifting project has ended | Two-cycle pause if eligible; otherwise skip |
| I need customization | No offer; no customization or roadmap promise |
| I’m switching to another option | No offer |
| I only wanted to try it | No offer |
| Other | No offer; optional feedback only |
| Prefer not to say | No offer |

These are proposed reason choices, not measured cancellation frequencies. Record a reason before routing. An ineligible customer goes directly to cancellation confirmation. Do not convert an unavailable offer into a generic discount or support gate.

**3a. Price offer**

“Save $9.60 over your next two shipments.”

“Pay $19.20 for the mug + $5 shipping = $24.20 per shipment for your next two shipments. After that, your monthly total returns to $29 ($24 + $5 shipping). Your next renewal is December 3, 2026. This offer is available once per customer in 180 days, cannot be combined with another offer, and will not be offered again within 30 days.”

Buttons: **Apply discount and keep my subscription** · **No thanks, continue cancelling**.

Eligibility requires price reason, unused 180-day allowance, no offer within 30 days, no stacking and available budget. Acceptance must succeed before showing: “Your discount is applied to your next two shipments. Each totals $24.20; later shipments return to $29.” On failure: “We couldn’t apply the offer. Your subscription has not changed.” Keep cancellation available.

**3b. Pause offer**

For excess supply: “Skip one monthly cycle.” Body: “No charge or shipment on December 3, 2026. Your subscription resumes January 3, 2027 at 10:00 a.m. Eastern Time, at $24 + $5 shipping = $29.”

For project ended: “Take a two-cycle break.” Body: “No charge or shipment on December 3, 2026 or January 3, 2027. Your subscription resumes February 3, 2027 at 10:00 a.m. Eastern Time, at $24 + $5 shipping = $29.”

Buttons: **Pause until [resume date]** · **No thanks, continue cancelling**. Acceptance receipt repeats skipped cycles and resume date, with **Manage or cancel subscription**. Dates above use the supplied next renewal; render actual dates before acceptance for each customer. Do not silently reset billing dates. A customer who declines proceeds directly to confirmation with no second offer.

**4. Final confirmation — `/subscription/cancel/confirm`**

“Cancel future shipments?”

“If you confirm, your subscription ends immediately on [effective date]. Your December 3, 2026 renewal will not be charged, and future recurring shipments will stop. Any prepaid shipments remain valid. Cancellation does not cancel or refund an order already paid for. Return requests are reviewed separately under our unused-within-30-days policy; final refunds require merchant approval.”

“We delete subscription preferences 90 days after the cancellation effective date, on [deletion date]. Legally required order records are kept separately. You can review a restart before then.”

Buttons: **Confirm cancellation** · **Go back**. Go back returns to subscription settings without re-showing an offer. Confirm is idempotent: stop future billing and fulfillment schedules, store the effective date and reason, then issue the receipt. Never report success until cancellation is committed.

**5. Receipt**

“Your HarborMug Gift Club subscription is cancelled as of [effective date]. Your December 3 renewal will not be charged. Future recurring shipments have stopped; prepaid shipments remain valid. We’ve sent your confirmation. Subscription preferences will be deleted on [deletion date].”

Links: **Review restart options** (`/subscription/reactivate`) and **Get help** (`/support`). Restart opens a review of price and next shipment date, with explicit consent to resume billing. It must not create an immediate charge merely from an email click.

## Customer email drafts

Tokens in brackets must be populated from confirmed subscription and invoice state. Use a calendar date for every date token. Except for an immediate failure notice, scheduled sends and actions occur at 10:00 a.m. America/New_York. Use actual current invoice amounts: discounted product invoices are $19.20 + $5, rather than the standard $24 + $5.

### Cancellation receipt — immediate, operational

**Subject:** Your HarborMug Gift Club subscription is cancelled

Your subscription was cancelled on [effective date]. Your next renewal on [next renewal date] will not be charged, and future recurring shipments have stopped. Prepaid shipments remain valid.

Cancellation does not refund existing orders. For a return request, contact support; unused items may be eligible within 30 days, with merchant approval required for a final refund.

Your subscription preferences will be deleted on [deletion date, effective date + 90 days]. Legally required order records are kept separately. You can review restarting your subscription here: [review restart link]. We’ll show the price and next shipment date before you confirm.

For help, reply to this email or visit [support link].

HarborMug

### Day 7 re-engagement — marketing consent required

**Subject:** Ready for another HarborMug shipment?

If your gifting plans have changed, you can review restarting HarborMug Gift Club. The standard monthly shipment is $24 plus $5 shipping, totaling $29. You’ll see the next charge and shipment details before confirming.

**Review my subscription** → [review restart link]

HarborMug · [Unsubscribe link]

### Day 30 winback — conditional, marketing consent required

Send only for a recorded price objection with fresh offer eligibility and reserved budget. No automatic send for missing customization or other unmatched reasons. A discount already used during the prior 180 days disqualifies this send; cancellation does not reset eligibility.

**Subject:** Save $9.60 on two HarborMug shipments

If price was the sticking point, you can return with 20% off the product price for your next two shipments. Each shipment is $19.20 plus $5 shipping, totaling $24.20. After those two shipments, the monthly total returns to $29.

This offer cannot be combined with another offer and is available once per customer in 180 days. Review the offer and next billing date before deciding to restart.

**Review my return offer** → [offer review link]

HarborMug · [Unsubscribe link]

Suppress both marketing emails after reactivation, consent withdrawal, preference deletion, or a pending payment-failure case. Include unsubscribe functionality and the merchant’s verified postal footer before enabling marketing; no postal address was supplied. Marketing eligibility must be checked at send time, not only when queued.

## Payment recovery: schedule and completed drafts

Use one proposed manual policy: initial failure D0; eligible retries D3, D8 and D13; cancel unresolved subscriptions D16. This resolves conflicting schedules in the Skill references into one explicit operational design. Do not also enable an overlapping Smart Retry schedule. Verify processor support and card updater behavior before implementation; Stripe is proposed only and no settings were changed.

Immediately hold the unpaid shipment. Keep already prepaid shipments valid. A confirmed successful payment releases only the associated held shipment once. Suppress later reminders, retries and cancellation after recovery. Updating a card alone is not payment success. At D16 stop retries, cancel future renewals and prevent later auto-collection of the unfulfilled invoice; an explicit restart creates one reviewed payment path, never duplicate collection of old and new invoices.

| Day | Action at 10 a.m. Eastern unless immediate |
|---|---|
| 0 | Hold unpaid shipment; immediate failure email |
| 3 | Recheck state, retry if permitted, then send reminder only if still unpaid |
| 7 | Reminder with actual next retry date (D8) |
| 8 | Second permitted retry |
| 12 | Final reminder with D13 retry and D16 deadline |
| 13 | Last permitted retry |
| 16 | Recheck payment state, cancel unresolved subscription, send operational receipt |

For `stolen_card`, `lost_card` or `fraudulent`, do not retry that payment method. Ask neutrally for another method; do not disclose a fraud accusation. For `expired_card`, require updated details or a confirmed updater result before retry. For `do_not_honor`, permit only one retry at D3; for `generic_decline`, permit D3 and D8 only. For insufficient funds use D3/D8/D13 if permitted by processor advice. Unknown codes require processor guidance before retry. Every notice reflects actual permitted next action; never promise a retry for a blocked method. Card updates trigger at most one controlled attempt on the replacement method after explicit customer confirmation, with concurrency protection against scheduled retries.

### D0 — immediate failure notice

**Subject:** Your HarborMug Gift Club payment didn’t go through

We couldn’t collect your payment of [invoice total] on [failure date]: [product amount] for the product plus [shipping amount] shipping. Your unpaid shipment is on hold. Prepaid shipments remain valid.

[Retryable: We plan to try again on [next permitted retry date]. / Replacement required: Please provide a different payment method. We won’t retry this payment method.]

**Update payment method** → [direct secure payment-update link]

Need help? Reply to this email or visit [support link].

HarborMug

### D3 — still unpaid, after permitted attempt

**Subject:** Your HarborMug payment still needs attention

Your [invoice total] payment ([product amount] product + [shipping amount] shipping) is still unpaid, and that shipment remains on hold.

[If another retry is permitted: Our next payment attempt is [actual next retry date]. / Otherwise: A different payment method is needed; we won’t retry the current method.]

**Update payment method** → [direct secure payment-update link]

Reply if you need help.

HarborMug

### D7 — reminder

**Subject:** Update your payment to release your HarborMug shipment

Your payment of [invoice total] is still unresolved: [product amount] product plus [shipping amount] shipping. Your unpaid shipment remains on hold.

[If permitted: We plan to try again on [D8 date]. / Otherwise: Please use a different payment method; no retry is scheduled on your current method.]

**Update payment method** → [direct secure payment-update link]

You can reply or visit [support link] for help.

HarborMug

### D12 — final reminder

**Subject:** Your HarborMug subscription will end on [D16 date] unless payment is resolved

Your [invoice total] payment ([product amount] product + [shipping amount] shipping) remains unpaid. Your unpaid shipment is on hold. If payment is not resolved before [D16 date] at 10:00 a.m. Eastern Time, we’ll cancel future renewals and recurring shipments. Prepaid shipments remain valid.

[If permitted: Our final scheduled attempt is [D13 date]. / Otherwise: We won’t retry the current payment method; please provide a different one.]

**Update payment method** → [direct secure payment-update link]

For help, reply or visit [support link].

HarborMug

### D16 — cancellation after unresolved payment

**Subject:** Your HarborMug Gift Club subscription has ended

Your subscription ended on [effective date] because the [invoice total] payment ([product amount] product + [shipping amount] shipping) remained unresolved. We’ve stopped future renewals and recurring shipments. The unpaid shipment will not be dispatched; prepaid shipments remain valid.

Subscription preferences will be deleted on [effective date + 90 days]. Legally required order records are kept separately.

**Update payment and review restart** → [direct secure payment-update link with restart review]

Updating your details does not automatically restart billing. We’ll show the next charge and shipment before you confirm. Reply or visit [support link] if you need help.

HarborMug

## Operational ownership and release checks

| Owner | Deadline relative to approved launch | Completed design to implement / acceptance condition |
|---|---|---|
| Mia, support | Before launch | Approve English copy, return distinction, reason taxonomy and response handling; no refund promise |
| Alex, escalation owner | Before launch | Assign billing implementer; approve offer ledger, budget reservations and manual retry policy; verify card updater and decline handling |
| Assigned billing implementer, accountable to Alex | Before launch | Implement proposed routes, fulfillment holds and state-driven emails; test duplicate events, retries, payment success races, card replacement and cancellation |
| Mia | Launch + 7 days, then weekly | Review reasons, abandonment, complaints, consent suppression and held orders |
| Alex | Launch + 30 days, then monthly | Compare paid retention and contribution with target; adjust only with observed evidence |

Log cancel starts, reason selected, offer shown/accepted/declined, committed cancellation, pause/resume, paid retained renewal, failed invoice, permitted retry, payment success, recovery cancellation and marketing suppression. Store deduplicated event identifiers and offer history under controlled access. Apply the supplied preference-deletion policy and retain legally required order records separately; do not retain free-text feedback indefinitely by default.

Measure paid saves / unique voluntary cancel attempts; report pause acceptances separately. Recovery rate is unique failed invoices successfully paid / unique failed invoices in a matured cohort; also report subscribers recovered, since the model assumes one invoice per subscriber. Track time to recovery, product revenue after discounts, separate shipping charges, contribution, offer commitments, survey completion and cancellation completion time. Compare like cohorts and exclude already recovered invoices from follow-up counts. Dunning cannot be credited to voluntary retention as well. Targets are hypotheses; no causal lift has been established.

**Boundary decisions:** For the supplied project-ended customer with offer eligibility false, skip the pause and proceed to cancellation confirmation. For the supplied stolen-card failure, make zero automatic attempts on that card and use the replacement-required email wording. With marketing consent false, send operational notices only, never D7/D30 marketing. A voluntary cancellation stops recovery retries and holds any unpaid fulfillment; prepaid shipments remain valid. If modeling a 100% involuntary mix, voluntary paid saves are zero and the model yields 17.5 expected recoveries, $420 product MRR and $87.50 separate shipping charges; fractional counts are cohort expectations.

**Input safeguards:** Missing MRR stops calculation rather than substituting a sample value. A 150% target save rate is rejected. Revenue and per-customer revenue must be positive; percentages must be numeric and within 0–100. The supplied inputs reconcile: 1,000 × $24 = $24,000 product MRR. No annual plan is assumed.

## Evidence and accompanying work

Sources: `inputs/brief.json` supplies the financial targets; `inputs/merchant.json` supplies economics, subscription terms, boundary cases and constraints. The original churn-prevention Skill, its cancel-flow playbook, dunning guide and calculator informed this design. Merchant constraints take priority over generic SaaS access-loss language, multi-offer suggestions and conflicting retry examples.

`calculations.json` contains exact model outputs and rejected-input checks. `calculate.py` reproduces the business model from the supplied inputs. `skill-calculator.txt` preserves the original Skill calculator run. That calculator rounds dollars and includes a simplified LTV estimate; its LTV is not used in the recommendation because shipping, discounts, costs and future retention are not modeled there.

The material launch gaps are the absence of an implemented subscription/payment system, verified marketing postal footer and observed reason/offer performance. The merchant must validate these before sending or charging; no customers were contacted and no accounts were modified.