If you recall, I said most of the optional actions you can take during your travels didn't have a difficulty number. Thus, you can't really fail at these actions. If you go hunting, you're going to come back with something. If you try repairing your gear, you will restore it. It's a question of how much, not if at all.
Encounters, however, are different. They've all got target numbers, and until you beat them, they stick around. What's a failed roll mean in these cases?
It doesn't mean failure. It just means you haven't completely overcome the encounter yet. The thing is, if you don't wipe an encounter out in one shot, it hits back. See, in this game, the GM rolls no dice. All he does is slap down cards and narrate. Encounters hurt you when they aren't taken out.
For example, you're wandering through a plague ravaged land. The GM slaps down a 7 of hearts for the encounter, but nothing happens until you bed down for the evening inside the ruins of a building. While you checked it for corpses, rats still infest the walls, and their fleas bite you. You realize it quickly, and roll your medic skill to treat yourself. Unfortunately, you're not a very good medic and you have no gear to aid the roll, so you come up with a high score of 4. The encounter loses points equal to your roll, dropping it to a 3, but it sticks around.
This is your shortfall. You failed the roll by 3, and since the encounter is still alive and kicking, it does its rating in damage to you. In this case, you burn with fever and take 3 points against your health. Tomorrow, you can try again, this time against a difficulty of 3.
This does, however, leave you with another decision. Do you deal with this encounter again and let another day go by, or do you press on and deal with the lingering effects of this encounter while running into another. If you're alone, you're gonna stay put, of course. But let's say you're in a party. Food's running low, but the group thinks it can make it to the next safepoint if they press. They want to go on.
That next day, a new encounter card hits the table. It's a Jack 10 Spades encounter. Raiders rush your position, and your party needs to put them down as fast as possible, because their wild hooting is drawing more of their clan to your position by the minute. But you're still sick. You can either roll against the illness, or you can help the party fight the raiders. That's bad for your health though; you'll take another 3 points of health from the fever. Then again, unless the party can come up with a collective 10, everyone will be taking damage from the raider assault. But remember, you only get one action per day.