ACH return codes are standardized identifiers that explain why a payment through the Automated Clearing House (ACH) network was unsuccessful. These codes streamline communication between financial institutions, helping resolve issues efficiently. Managed by NACHA, the governing body for the ACH network, each code starts with the letter “R” followed by a two-digit number, such as R04, which indicates an invalid account number.
ACH payments may fail for various reasons, including insufficient funds, unauthorized transactions, or errors in payment details. When this happens, the transaction is returned to the originator with an ACH return code, enabling them to take corrective action.
How Do ACH Return Codes Work?
ACH return codes follow specific rules outlined by NACHA. These rules guide how ODFIs (Originating Depository Financial Institutions) and RDFIs (Receiving Depository Financial Institutions) handle each return scenario.
Example Scenarios:
Unauthorized Transactions:
If a consumer notices an unauthorized debit for a streaming subscription, they can request their bank to return the payment using R05. The bank has up to 60 days after settlement to initiate this return.
Insufficient Funds:
If a consumer authorizes a debit but lacks sufficient funds, the payment will be returned with R01. In this case, the receiving bank must return the payment within 2 banking days after settlement.
Why Are ACH Return Codes Important?
Efficient Communication: Clear codes simplify the resolution of payment issues.
Risk Mitigation: Institutions can quickly identify and address errors or fraud.
Compliance: Following NACHA’s standardized rules ensures regulatory adherence.
Most Common ACH Return Codes
| Code | Title | Account Type | Time Frame |
|---|---|---|---|
| R01 | Insufficient Funds | Consumer or Non-Consumer | 2 Banking Days |
| R02 | Account Closed | Consumer or Non-Consumer | 2 Banking Days |
| R03 | No Account / Unable to Locate Account | Consumer or Non-Consumer | 2 Banking Days |
| R04 | Invalid Account Number Structure | Consumer or Non-Consumer | 2 Banking Days |
| R05 | Unauthorized Consumer Debit using Corporate SEC Code | Consumer | 60 Calendar Days |
| R06 | ODFI Requested Return | Consumer or Non-Consumer | Undefined |
| R07 | Customer Revoked Authorization | Consumer | 60 Calendar Days |
| R08 | Payment Stopped | Consumer or Non-Consumer | 2 Banking Days |
| R09 | Uncollected Funds | Consumer or Non-Consumer | 2 Banking Days |
| R10 | Originator not known and/or not authorized to Debit Receiver’s Account | Consumer; Non-Consumer for ARC, BOC, IAT, or POP. | 60 Calendar Days |
| R11 | Customer advises not within Authorization Terms | Consumer; Non-Consumer for ARC, BOC, POP, and IAT | 60 Calendar Days |
| R12 | Account Sold to Another DFI | Consumer or Non-Consumer | 2 Banking Days |
| R13 | Invalid ACH Routing Number | Consumer or Non-Consumer | Next File Delivery Time Following Processing |
| R14 | Representative Payee Deceased | Consumer or Non-Consumer | 2 Banking Days |
| R15 | Beneficiary / Account Holder Deceased | Consumer | 2 Banking Days |
| R16 | Account Frozen / Returned per OFAC | Consumer or Non-Consumer | 2 Banking Days |
| R17 | File Record Edit Criteria / Suspicious Entry with Invalid Account No. / Return of Improperly-Initiated Reversal | Consumer or Non-Consumer | 2 Banking Days |
| R18 | Improper Effective Date | Consumer or Non-Consumer | Next File Delivery Time Following Processing |
| R19 | Amount Field Error | Consumer or Non-Consumer | Next File Delivery Time Following Processing |
| R20 | Non-Transaction Account | Consumer or Non-Consumer | 2 Banking Days |
| R21 | Invalid Company ID | Non-Consumer | 2 Banking Days |
| R22 | Invalid Individual ID | Consumer or Non-Consumer | 2 Banking Days |
| R23 | Credit Entry Refused by Receiver | Consumer or Non-Consumer | 2 Banking Days |
| R24 | Duplicate Entry | Consumer or Non-Consumer | 2 Banking Days |
| R25 | Addenda Error | Consumer or Non-Consumer | 2 Banking Days |
| R26 | Mandatory Field Error | Consumer or Non-Consumer | 2 Banking Days |
| R27 | Trace Number Error | Consumer or Non-Consumer | Next File Delivery Time Following Processing |
| R28 | Routing Number Check Digit Error | Consumer or Non-Consumer | 2 Banking Days |
| R29 | Corporate Customer Advises Not Authorized | Non-Consumer | 2 Banking Days |
| R30 | Receiving DFI Not Participant in Check Truncation Program | Consumer or Non-Consumer | 2 Banking Days |
| R31 | Permissible Return Entry (CCD and CTX only) | Non-Consumer | Undefined |
| R32 | RDFI Non-Settlement | Consumer or Non-Consumer | 2 Banking Days |
| R33 | Return of XCK Entry | Consumer or Non-Consumer | 2 Banking Days |
| R34 | Limited Participation DFI | Consumer or Non-Consumer | 2 Banking Days |
| R35 | Improper Debit Entry | Consumer or Non-Consumer | 2 Banking Days |
| R36 | Improper Credit Entry | Consumer or Non-Consumer | 2 Banking Days |
| R37 | Source Document Presented for Payment | Consumer or Non-Consumer | 2 Banking Days |
| R38 | Stop Payment on Source Document | Consumer or Non-Consumer | 2 Banking Days |
| R39 | Improper Source Document | Consumer or Non-Consumer | 2 Banking Days |
| R40 | Return of ENR Entry | Consumer or Non-Consumer | 2 Banking Days |
| R41 | Invalid Transaction Code | Consumer or Non-Consumer | 2 Banking Days |
| R42 | Routing Number/Check Digit Error | Consumer or Non-Consumer | 2 Banking Days |
| R43 | Invalid DFI Account Number | Consumer or Non-Consumer | 2 Banking Days |
| R44 | Invalid Individual ID Number or Identification Number | Consumer or Non-Consumer | 2 Banking Days |
| R45 | Invalid Individual Name/Company Name | Consumer or Non-Consumer | 2 Banking Days |
| R46 | Invalid Representative Payee Indicator | Consumer or Non-Consumer | 2 Banking Days |
| R47 | Duplicate Enrollment | Consumer or Non-Consumer | 2 Banking Days |
| R50 | State Law Affecting RCK Acceptance | Consumer or Non-Consumer | 2 Banking Days |
| R51 | Item Related to RCK Entry Is Ineligible or RCK Entry Is Improper | Consumer or Non-Consumer | 2 Banking Days |
| R52 | Stop Payment on Item Related to RCK Entry | Consumer or Non-Consumer | 2 Banking Days |
| R53 | Item and RCK Entry Presented for Payment | Consumer or Non-Consumer | 2 Banking Days |
| R61 | Misrouted Return | Consumer or Non-Consumer | 2 Banking Days |
| R62 | Return of Erroneous or Reversing Debit | Consumer or Non-Consumer | 5 Banking Days |
| R67 | Duplicate Return | Consumer or Non-Consumer | 2 Banking Days |
| R68 | Untimely Return | Consumer or Non-Consumer | 2 Banking Days |
| R69 | Field Error | Consumer or Non-Consumer | 2 Banking Days |
| R70 | Permissible Return Not Accepted / Not Requested by ODFI | Consumer or Non-Consumer | 2 Banking Days |
NACHA regularly updates return codes to reflect new use cases and clarify existing rules. A recent example is the update to R11, which now applies to situations where an error occurs in the payment amount or timing.
Conclusion
ACH return codes is crucial for businesses and financial institutions managing ACH payments. By interpreting these codes accurately, issues like unauthorized transactions, insufficient funds, or incorrect account details can be resolved quickly, ensuring smooth payment processing and compliance with NACHA standards.