What are ACH Returns?
When an ACH Entry cannot be successfully processed, it will trigger an ACH return. It is important to know that an ACH return is not the same as a refund.
ACH Return Codes
There are many reasons why an ACH Entry can be unsuccessful. When this happens, an ACH return is received. Each return begins with an “R” followed by a two-digit number. The two-digit number provides the reason why the ACH is returned and who initiated the return. Though most returns are initiated by the Receiving Depository Financial Institution (RDFI), there are some returns that can be initiated by the Originating Depository Financial Institution (ODFI), ACH Operator, Federal Government Agency, or Gateway. ACH returns must be in accordance with the rules and timeframes established by Nacha.
Nacha Return Rates
Nacha has established return rate thresholds that are not to be exceeded for ACH Debit Returns. Return Rates are calculated by dividing the total number of returns for the return rate category by the total number of debits processed in the preceding two calendar months or 60 calendar days.
Return Rate Category | Details | Return Rate Threshold |
|---|---|---|
Administrative Return Rate | The rate at which an Originator’s or Third-Party Sender’s debit Entries are returned for administrative reasons (R02, R03, or R04) | 3% |
Unauthorized Return Rate | The rate at which an Originator’s or Third-Party Sender’s debit Entries are returned for unauthorized reasons (R05, R07, R10, R11, or R29) | 0.50% |
Overall Return Rate | The rate at which an Originator’s or Third-Party Sender’s debit Entries are returned for all return reasons including administrative and unauthorized | 15% |
Most Common ACH Return Codes
Return Code | Title | Details | Return Initiated By |
|---|---|---|---|
R01 | Insufficient Funds | The account does not have the available balance to cover the debit Entry | Customer’s Bank |
R02 | Account Closed | The bank account is no longer an open account | Customer’s Bank |
R03 | No Account/ Unable to Locate Account | The account number is valid, but the account number doesn’t match up with the individual identified in the Entry | Customer’s Bank |
R04 | Invalid Account Number Structure | The structure of the account number isn’t valid | Customer’s Bank |
R05 | Unauthorized Debit to Consumer Account Using Corporate SEC Code | A debit Entry was to a consumer account, but the Receiver has not authorized the debit Entry | Customer’s Bank but instructed by customer |
R06 | Returned per ODFI’s Request | The ODFI made a request for the RDFI to return the ACH Entry | Customer’s Bank |
R07 | Authorization Revoked by Customer | The Receiver revoked the authorization previously provided to the Originator for this debit Entry | Customer’s Bank |
R08 | Payment Stopped | The Receiver of the debit Entry has placed a stop payment order | Customer’s Bank |
R09 | Uncollected Funds | A sufficient ledger balance exists to satisfy the dollar value of the transaction, but the available balance is below the dollar value of the debit Entry | Customer’s Bank |
R10 | Customer Advises Originator is Not Known to Receiver and/or Originator is Not Authorized by Receiver to Debit Receiver’s Account | The Receiver does not know the identity of the Originator; has no relationship with the Originator; or has not authorized the Originator to debit their account | Customer’s Bank but instructed by customer |
R11 | Customer Advises Entry Not in Accordance with the Terms of the Authorization | The Receiver states that the Originator and Receiver have a relationship and an authorization to debit exists, but there is an error or defect in the payment such that the Entry does not conform to the terms of the authorization (for example, the Entry is for an amount different than authorized; the Entry was initiated for settlement earlier than authorized; the Entry is part of an Incomplete Transaction; the debit Entry was improperly reinitiated | Customer’s Bank but instructed by customer |
Less Common ACH Return Codes
Return Code | Title | Details | Return Initiated By | Account Type | Return Timeframe |
|---|---|---|---|---|---|
R12 | Account Sold to Another DFI | A financial institution received an Entry to an account that was sold to another financial institution | RDFI | Consumer or Non-Consumer | 2 Banking Days |
R13 | Invalid ACH Routing Number | Entry contains a RDFI Identification or Gateway Identification that is not a valid ACH routing number. | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R14 | Representative Payee Deceased or Unable to Continue in That Capacity | The representative payee is either deceased or unable to continue in that capacity. The beneficiary is not deceased | RDFI | Consumer or Non-Consumer | 2 Banking Days |
R15 | Beneficiary or Account Holder (Other Than a Representative Payee) Deceased | (1) The beneficiary is deceased; or (2) the account holder is deceased. | RDFI | Consumer | 2 Banking Days |
R16 | Account Frozen/Entry Returned Per OFAC Instruction | (1) Access to the account is restricted due to specific action taken by the RDFI or by legal action; or (2) OFAC has instructed the RDFI or Gateway to return the Entry | RDFI or Gateway | Consumer or Non-Consumer | 2 Banking Days |
R17 | File Record Edit Criteria/Entry with Invalid Account Number Initiated Under Questionable Circumstances/Return of Improperly-Initiated Reversal | (1) Field(s) cannot be processed by RDFI; (2) the Entry contains an invalid DFI Account Number (account closed/no account/unable to locate account/invalid account number) and is believed by the RDFI to have been initiated under questionable circumstances; or (3) either the RDFI or Receiver has identified a Reversing Entry as one that was improperly initiated by the Originator or ODFI | RDFI | Consumer or Non-Consumer | 2 Banking Days |
R18 | Improper Effective Entry Date | (1) The Effective Entry Date for a credit Entry is more than two Banking Days after the Banking Day of processing as established by the Originating ACH Operator; or (2) the Effective Entry Date for a debit Entry is more than one Banking Day after the processing date | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R19 | Amount Field Error | (1) Amount field is non-numeric. (2) Amount field is not zero in a Prenotification, DNE, ENR, Notification of Change, refused Notification of Change, or zero dollar CCD, CTX, or IAT Entry. (3) Amount field is zero in an Entry other than a Prenotification, DNE, ENR, Notification of Change, Return, dishonored Return, contested dishonored Return, or zero dollar CCD, CTX, or IAT Entry. (4) Amount field is greater than $25,000 for ARC, BOC, and POP Entries | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R20 | Non-Transaction Account | ACH Entry to a non-Transaction Account | RDFI | Consumer or Non-Consumer | 2 Banking Days |
R21 | Invalid Company Identification | The Identification Number used in the Company Identification Field is not valid | RDFI | Non-Consumer | 2 Banking Days |
R22 | Invalid Individual ID Number | The Receiver has indicated to the RDFI that the number with which the Originator was identified is not correct | RDFI | Consumer or Non-Consumer | 2 Banking Days |
R23 | Credit Entry Refused by Receiver | Any credit Entry that is refused by the Receiver | RDFI | Consumer or Non-Consumer | RDFI must transmit Return by second Banking Day upon receipt of Refusal |
R24 | Duplicate Entry | The RDFI has received a duplicate Entry; i.e., the trace number, date, dollar amount and/or other data matches another transaction | RDFI | Consumer or Non-Consumer | 2 Banking Days |
R25 | Addenda Error | (1) Addenda Record Indicator value is incorrect. (2) Addenda Type Code is invalid, out of sequence, or missing, (3) Number of Addenda Records exceeds allowable maximum, (4) Addenda Sequence Number is invalid | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R26 | Mandatory Field Error | Erroneous data or missing data in a mandatory field | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R27 | Trace Number Error | 1) Original Entry Trace Number is not present in the Addenda Record on a Return or Notification of Change Entry; or (2) Trace Number of an Addenda Record is not the same as the Trace Number of the preceding Entry Detail Record | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R28 | Routing Number Check Digit Error | The check digit for a routing number is not valid | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R29 | Corporate Customer Advises Not Authorized | The Receiver (Non-Consumer) did not authorize the Entry | RDFI | Non-Consumer | 2 Banking Days |
R30 | RDFI Not Participant in Check Truncation Program | The RDFI does not participate in a Check Truncation Program | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R31 | Permissible Return Entry (CCD and CTX only) | The RDFI may return a CCD or CTX Entry that the ODFI agrees to accept | RDFI | Non-Consumer | Not defined, determined by the ODFI and RDFI. |
R32 | RDFI Non-Settlement | The RDFI is not able to settle the Entry | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R33 | Return of XCK Entry | This Return Reason Code may only be used to return XCK Entries and is at the RDFI’s sole discretion | RDFI | Consumer or Non-Consumer | 60 Calendar Days |
R34 | Limited Participation DFI | The RDFI’s participation has been limited by a federal or state supervisor | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R35 | Return of Improper Debit Entry | Debit Entries are not permitted for CIE Entries or to loan accounts (reversals are exceptions) | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R36 | Return of Improper Credit Entry | ACH credit Entries (with the exception of Reversing Entries) are not permitted for use with ARC, BOC, POP, RCK, TEL, and XCK | ACH Operator | Consumer or Non-Consumer | Next file delivery time following processing |
R37 | Source Document Presented for Payment | The source document to which an ARC, BOC, or POP Entry relates has been presented for payment | RDFI | Consumer or Non-Consumer | 60 Calendar Days |
R38 | Stop Payment on Source Document | A stop payment order has been placed on the source document to which the ARC or BOC Entry relates. | RDFI | Consumer or Non-Consumer | 60 Calendar Days |
R39 | Improper Source Document/ Source Document Presented for Payment | (1) the source document used for an ARC, BOC, or POP Entry to its Receiver’s account is improper, or (2) an ARC, BOC, or POP Entry and the source document to which the Entry relates have both been presented for payment and posted to the Receiver’s account | RDFI | Consumer or Non-Consumer | 2 Banking Days |
Codes to be Used by Federal Government Agencies Returning ENR Entries Only
Return Code | Title | Details | Return Initiated By | Account Type | Return Timeframe |
|---|---|---|---|---|---|
R40 | Return of ENR Entry by Federal Government Agency | This Return Reason Code may only be used to return ENR Entries and is at the Federal Government Agency’s sole discretion | Federal Government Agencies For ENR Entries Only | N/A | N/A |
R41 | Invalid Transaction Code | Either the Transaction Code included in the Addenda Record does not conform to the ACH Record Format Specifications contained in Appendix Three (ACH Record Format Specifications) or it is not appropriate with regard to an Automated Enrollment Entry | Federal Government Agencies For ENR Entries Only | N/A | N/A |
R42 | Routing Number/Check Digit Error | The Routing Number and the Check Digit included in the Addenda Record is either not a valid number or it does not conform to the Modulus 10 formula | Federal Government Agencies For ENR Entries Only | N/A | N/A |
R43 | Invalid DFI Account Number | The Receiver’s account number included in the Addenda Record must include at least one alphanumeric character. | Federal Government Agencies For ENR Entries Only | N/A | N/A |
R44 | Invalid Individual ID Number/ Identification Number | The Individual ID Number/Identification Number provided the Addenda Record does not match a corresponding ID number in the Federal Government Agency’s records | Federal Government Agencies For ENR Entries Only | N/A | N/A |
R45 | Invalid Individual Name/Company Name | The name of the consumer or company provided in the Addenda Record either does not match a corresponding name in the Federal Government Agency’s records or fails to include at least one alphanumeric character | Federal Government Agencies For ENR Entries Only | N/A | N/A |
R46 | Invalid Representative Payee Indicator | The Representative Payee Indicator Code included in the Addenda Record has been omitted or it is not consistent with the Federal Government Agency’s records | Federal Government Agencies For ENR Entries Only | N/A | N/A |
R47 | Duplicate Enrollment | The Entry is a duplicate of an Automated Enrollment Entry previously initiated by a DFI | Federal Government Agencies For ENR Entries Only | N/A | N/A |
Codes to be Used by RDFI Returning RCK Entries Only
Return Code | Title | Details | Return Initiated By | Account Type | Return Timeframe |
|---|---|---|---|---|---|
R50 | State Law Affecting RCK Acceptance | (1) The RDFI is located in a state that has not adopted Revised Article 4 of the Uniform Commercial Code (1990 Official Text) and has not revised its customer agreements to allow for Electronic presentment; or (2) the RDFI is located within a state that requires all canceled Checks to a specific type of account to be returned to the Receiver within the periodic statement | RDFI For RCK Entries Only | Consumer | 2 Banking Days |
R51 | Item Related to RCK Entry Is Ineligible or RCK Entry Is Improper. | An ineligible or improper RCK Entry | RDFI For RCK Entries Only | Consumer | 60 Calendar Days |
R52 | Stop Payment on Item Related to RCK Entry | A stop payment order has been placed on the item relating to the RCK Entry | RDFI For RCK Entries Only | Consumer | 60 Calendar Days |
R53 | Item and RCK Entry Presented for Payment | In addition to an RCK Entry, the item to which the RCK Entry relates has also been presented for payment | RDFI For RCK Entries Only | Consumer | 60 Calendar Days |
Codes to be Used by the ODFI for Dishonored Return Entries
Return Code | Title | Details | Return Initiated By | Account Type | Return Timeframe |
|---|---|---|---|---|---|
R61 | Misrouted Return | The RDFI has placed the incorrect Routing Number in the Receiving DFI Identification field | ODFI | Consumer or Non-Consumer | 5 Banking Days after the Settlement Date of the Return Entry |
R62 | Return of Erroneous or Reversing Debit | The Originator’s/ODFI’s use of the reversal process has resulted in, or failed to correct an unintended credit to the Receiver | ODFI | Consumer or Non-Consumer | 5 Banking Days after the Settlement Date of the Return Entry |
R67 | Duplicate Return | The ODFI has received more than one Return for the same Entry | ODFI | Consumer or Non-Consumer | 5 Banking Days after the Settlement Date of the Return Entry |
R68 | Untimely Return | The ODFI received the ACH return outside of the permissible time frames in Nacha Rules | ODFI | Consumer or Non-Consumer | 5 Banking Days after the Settlement Date of the Return Entry |
R69 | Field Error(s) | One or more of the field requirements are incorrect | ODFI | Consumer or Non-Consumer | 5 Banking Days after the Settlement Date of the Return Entry |
R70 | Permissible Return Entry Not Accepted/Return Not Requested by ODFI | The ODFI received a Return Entry identified by the RDFI as being returned with the permission of, or at the request of, the ODFI, but the ODFI did not agree to accept the Entry or has not requested the return of the Entry | ODFI | Consumer or Non-Consumer | 5 Banking Days after the Settlement Date of the Return Entry |
Codes to be Used by the RDFI for Contested Dishonored Return Entries
Return Code | Title | Details | Return Initiated By | Account Type | Return Timeframe |
|---|---|---|---|---|---|
R71 | Misrouted Dishonored Return | The ODFI has placed the incorrect Routing Number in the Receiving DFI Identification field | RDFI | Consumer or Non-Consumer | 2 Banking Days after the Settlement Date of the dishonored Return Entry |
R72 | Untimely Dishonored Return | The dishonored Return Entry has not been sent within the permissible time frames in Nacha Rules | RDFI | Consumer or Non-Consumer | 2 Banking Days after the Settlement Date of the dishonored Return Entry |
R73 | Timely Original Return | The RDFI is certifying that the original Return Entry was sent within the permissible time frames in Nacha Rules | RDFI | Consumer or Non-Consumer | 2 Banking Days after the Settlement Date of the dishonored Return Entry |
R74 | Corrected Return | The RDFI is correcting a previous Return Entry that was dishonored using Return Reason Code R69 - Field Error(s,) because it contained incomplete or incorrect information | RDFI | Consumer or Non-Consumer | 2 Banking Days after the Settlement Date of the dishonored Return Entry |
R75 | Return Not a Duplicate | The Return Entry was not a duplicate of an Entry previously returned by the RDFI | RDFI | Consumer or Non-Consumer | 2 Banking Days after the Settlement Date of the dishonored Return Entry |
R76 | No Errors Found | The original Return Entry did not contain the errors indicated by the ODFI in the dishonored Return Entry | RDFI | Consumer or Non-Consumer | 2 Banking Days after the Settlement Date of the dishonored Return Entry |
R77 | Non-Acceptance of R62 Dishonored Return | The RDFI returned both the Erroneous Entry and the related Reversing Entry, or the funds relating to the R62 dishonored Return are not recoverable from the Receiver | RDFI | Consumer or Non-Consumer | 2 Banking Days after the Settlement Date of the dishonored Return Entry |
Codes to be Used by Gateways for the Return of International Payments
Return Code | Title | Details | Return Initiated By | Account Type | Return Timeframe |
|---|---|---|---|---|---|
R80 | IAT Entry Coding Error | The IAT Entry is being returned due to one or more of the following conditions: (1) invalid DFI/Bank Branch Country Code (2) invalid DFI/Bank Identification Number Qualifier (3) invalid Foreign Exchange Indicator (4) invalid ISO Originating Currency Code (5) invalid ISO Destination Currency Code (6) invalid ISO Destination Country Code (7) invalid Transaction Type Code | Gateway | Consumer or Non-Consumer | 2 Banking Days |
R81 | Non-Participant in IAT Program | The Gateway does not have an agreement with either the ODFI or the Gateway’s customer to transmit Outbound IAT Entries | Gateway | Consumer or Non-Consumer | 2 Banking Days |
R82 | Invalid Foreign Receiving DFI Identification | The reference used to identify the Foreign RDFI of an Outbound IAT Entry is invalid | Gateway | Consumer or Non-Consumer | 2 Banking Days |
R83 | Foreign Receiving DFI Unable to Settle | Settlement problems in the foreign payment system | Gateway | Consumer or Non-Consumer | 2 Banking Days |
R84 | Entry Not Processed by Gateway | For Outbound IAT Entries, the Entry has not been processed and is being returned at the Gateway’s discretion because either (1) the processing of such Entry may expose the Gateway to excessive risk, or (2) the foreign payment system does not support the functions needed to process the transaction | Gateway | Consumer or Non-Consumer | 2 Banking Days |
R85 | Incorrectly Coded Outbound International Payment | The RDFI/Gateway has identified the Entry as an Outbound international payment and is returning the Entry because it bears an SEC Code that lacks information required by the Gateway for OFAC compliance | Gateway | Consumer or Non-Consumer | 2 Banking Days |
Dishonored Returns - When can an ACH Return be Disputed
A dishonored return must be initiated by the ODFI and must be transmitted within five banking days of the Settlement Date of the Return Entry.
Returned entries can be dishonored if any of the following criteria is met.
The return…
Was not returned within the proper time frame
Contained incorrect information
Was a misrouted
Was a duplicate
Resulted in an unintended credit to the Receiver related to the reversal process
Contested Dishonored Returns - Can the RDFI contest a dishonored return?
The RDFI may refute the dishonored return by transmitting a contested dishonored return within two banking days after the Settlement Date of the dishonored Return Entry.
Dishonored Returned entries can be contested if any of the following criteria is met.
If the original return…
Was timely
Was correct
Has been corrected
Or
If the dishonored return was not returned within the proper dishonored return time frame
Key ACH Terms
ACH Term | Definition |
|---|---|
ACH Operator | An entity that acts as a central facility for the clearing, delivery, and settlement of ACH entries between or among Participating Depository Financial Institutions. |
Banking Day | A business day in the United States in which a bank is open to the public |
Calendar Day | Any calendar day, including business days, weekends, and Federal Holidays |
Consumer Account | A bank account established by a natural person primarily for personal, family, or household use and not for commercial purposes |
Gateway | An ACH Operator or a Participating Depository Financial Institution that acts as an Entry point to or exit point from the United States for ACH Entries |
Non-consumer Account | A bank account established by an Organization primarily for commercial purposes. A Non-Consumer Account may be established by a natural person if the bank records indicate that the account is primarily for commercial and not for personal, family, or household purposes |
ODFI | The Originating Depository Financial Institution has an agreement with the ACH Operator to transmit ACH entries on behalf of its Originators |
Originator | The consumer, business or government organization that initiates the ACH payment process and is authorized to do so. |
RDFI | The Receiving Depository Financial Institution receives ACH entries directly or indirectly from the ACH Operator for debit or credit to the accounts of its customers. All financial institutions must be an RDFI to allow a customer or member to accept funds via ACH. |
Receiver | The intended recipient of the ACH transaction, the bank account holder |
Settlement Date | The date the credit of debit Entry is reflected on the books of the Federal Reserve Bank |