diff --git a/modules/apps/transfer/ibc_module.go b/modules/apps/transfer/ibc_module.go
index f8cdb530af2..2aa27da7f62 100644
--- a/modules/apps/transfer/ibc_module.go
+++ b/modules/apps/transfer/ibc_module.go
@@ -223,11 +223,12 @@ func (im IBCModule) OnAcknowledgementPacket(
 	if err := im.keeper.OnAcknowledgementPacket(ctx, packet, data, ack); err != nil {
 		return err
 	}
-
+	denom := types.ParseDenomTrace(data.Denom)
 	// AfterTransferEnd
 	if ack.Success() {
-		denom := types.ParseDenomTrace(data.Denom)
 		im.keeper.AfterTransferEnd(ctx, data, denom.BaseDenom)
+	} else {
+		im.keeper.AfterTransferFail(ctx, data, denom.BaseDenom)
 	}
 
 	ctx.EventManager().EmitEvent(
@@ -276,6 +277,9 @@ func (im IBCModule) OnTimeoutPacket(
 	if err := im.keeper.OnTimeoutPacket(ctx, packet, data); err != nil {
 		return err
 	}
+	
+	denom := types.ParseDenomTrace(data.Denom)
+	im.keeper.AfterTransferFail(ctx, data, denom.BaseDenom)
 
 	ctx.EventManager().EmitEvent(
 		sdk.NewEvent(
diff --git a/modules/apps/transfer/keeper/hooks.go b/modules/apps/transfer/keeper/hooks.go
index 3900c1206f8..566db6aada5 100644
--- a/modules/apps/transfer/keeper/hooks.go
+++ b/modules/apps/transfer/keeper/hooks.go
@@ -10,6 +10,10 @@ func (k Keeper) AfterTransferEnd(ctx sdk.Context, packet types.FungibleTokenPack
 	k.hooks.AfterTransferEnd(ctx, packet, base_denom)
 }
 
+func (k Keeper) AfterTransferFail(ctx sdk.Context, packet types.FungibleTokenPacketData, base_denom string) {
+	k.hooks.AfterTransferFail(ctx, packet, base_denom)
+}
+
 // AfterOnRecvPacket executes the indicated hook after OnRecvPacket ends
 func (k Keeper) AfterOnRecvPacket(ctx sdk.Context, packet types.FungibleTokenPacketData) {
 	k.hooks.AfterOnRecvPacket(ctx, packet)
diff --git a/modules/apps/transfer/types/hooks.go b/modules/apps/transfer/types/hooks.go
index f1e7cbfbf3e..974d751cc5e 100644
--- a/modules/apps/transfer/types/hooks.go
+++ b/modules/apps/transfer/types/hooks.go
@@ -6,6 +6,7 @@ import (
 
 type TransferHooks interface {
 	AfterTransferEnd(ctx sdk.Context, data FungibleTokenPacketData, base_denom string)
+	AfterTransferFail(ctx sdk.Context, data FungibleTokenPacketData, base_denom string)
 	AfterOnRecvPacket(ctx sdk.Context, data FungibleTokenPacketData)
 }
 
@@ -23,6 +24,12 @@ func (h MultiTransferHooks) AfterTransferEnd(ctx sdk.Context, data FungibleToken
 	}
 }
 
+func (h MultiTransferHooks) AfterTransferFail(ctx sdk.Context, data FungibleTokenPacketData, base_denom string) {
+	for i := range h {
+		h[i].AfterTransferFail(ctx, data, base_denom)
+	}
+}
+
 func (h MultiTransferHooks) AfterOnRecvPacket(ctx sdk.Context, data FungibleTokenPacketData) {
 	for i := range h {
 		h[i].AfterOnRecvPacket(ctx, data)