iOS Auto-Renewable Subscription: ~70% of US free-trial conversions fail to charge and enter Billing Grace Period (DID_FAIL_TO_RENEW / GRACE_PERIOD)

Hi everyone, I’m an iOS developer and I’m seeing an unusually high billing failure rate at the free-trial → paid conversion point. I’d appreciate any guidance on whether this looks like expected App Store billing behavior, a configuration issue, or a common implementation pitfall.

What I’m seeing

My app offers an auto-renewable monthly subscription with a 3-day free trial. Around the moment the trial ends and the first paid renewal should occur:

• ~70% of users hit billing failure and enter Billing Grace Period
• Before I enabled Billing Grace Period, a similar percentage appeared to go from trial directly to Expired
• Users are US storefront (USA / storefrontId 143441). The app is not released in China.

App Store Connect configuration (summary)

• Product type: Auto-Renewable Subscription
• Duration: 1 month
• Product ID: monthly_trial
• US price: $12.99 / month
• Free trial: 3 days (P3D)
• Environment: Production
• Family Sharing: Off (if relevant)

Tech / integration

• iOS client is currently StoreKit 1 (uses SKReceiptRefreshRequest)
• I have a backend and I’m using App Store Server Notifications V2 to update subscription status
• During Grace Period, I currently continue to grant entitlement and prompt users to update their Apple ID payment method

Redacted Server Notifications V2 example

Below is a typical sequence (IDs masked, only key fields shown). Timestamps are epoch milliseconds; my logs may show local time.

Event A — trial start

• notificationType: SUBSCRIBED
• subtype: INITIAL_BUY
• offer: FREE_TRIAL (P3D)
• price: 0
• storefront: USA (143441)
• productId: monthly_trial
• originalTransactionId: 2000029926****436
• purchaseDate (ms): 1768156450000
• expiresDate (trial end, ms): 1768415650000

Event B — trial ends, first paid renewal attempt fails, grace period begins

• notificationType: DID_FAIL_TO_RENEW
• subtype: GRACE_PERIOD
• expirationIntent: 2 (billing error)
• isInBillingRetryPeriod: true
• renewalPrice: 12990 (USD equivalent to $12.99)
• renewalDate (ms): 1768415650000
• gracePeriodExpiresDate (ms): 1769798050000
• transaction expiresDate (ms): 1769798050000
• appTransactionId: 7051882678****984
• originalTransactionId: 2000029926****436

Questions

1. Has anyone seen very high DID_FAIL_TO_RENEW / GRACE_PERIOD rates for US trial conversions? Is this ever normal (e.g., payment verification patterns), or does it usually indicate a problem?
2. Are there known pitfalls with StoreKit 1 + receipt validation + Server Notifications V2 that could make this look worse than it is (e.g., entitlement misclassification, timing issues, relying on stale receipt data, etc.)?
3. What’s the recommended user-facing flow during Billing Retry / Grace Period? (We currently grant access and ask users to update payment method.)
4. Would migrating the client to StoreKit 2 improve reliability of detecting in-grace/in-retry states (even if it doesn’t affect billing success itself), or is the backend approach sufficient?

What I’ve checked

• App Store Connect pricing and trial configuration appear correct
• We do not revoke access during Grace Period
• The rate remains unusually high (~70%)

Thanks in advance for any similar cases, diagnostic tips, or best practices. I can provide additional anonymized samples if helpful.