ACH return codes are used to communicate the status of a payment transaction between financial institutions, such as banks and credit unions. The Automated Clearing House (ACH) Network is an electronic system for processing payments, including direct deposits, payroll transactions, tax refunds, and bill payments. When an ACH payment is sent from one institution to another, an ACH return code is sent back to the sender. The return codes are used to identify why a payment was not accepted or successfully processed.
ACH return codes can range from R01 - Insufficient Funds to R50 - Non-Transaction Account (for example, savings accounts). The most common return codes include:
- R01 - Insufficient Funds
- R02 - Account Closed
- R03 - No Account/Unable to Locate Account
- R04 - Invalid Account Number
- R07 - Authorization Revoked by Customer
- R10 - Customer Advises Not Authorized
- R29 - Corporate Customer Advises Not Authorized
- R33 - Stop Payment on Item
- R51 - Requested Item is Ineligible for Filing
- R52 - Requested Item Is Stale-Dated.
It is important to understand the meaning of each ACH return code, as well as how to prevent future issues from occurring. For example, if you receive an R01 - Insufficient Funds return code, it means there are not enough funds in the account to cover the transaction. In some cases, this can be resolved by providing additional funds or by re-submitting the payment. If a payment is returned with an R02 - Account Closed return code, it means the account has been closed and the payment cannot be accepted. In this case, it is important to contact the customer and request a new payment method.
Understanding ACH return codes is an important part of managing payment processing transactions. By knowing how to identify and respond to each code, you can quickly ensure payments are processed correctly and help prevent future issues. If you need assistance understanding ACH return codes, many banks and financial institutions are available to help. Additionally, there are numerous online resources to help provide further information and guidance on the topic.
It is also important to note that each bank or institution may have different return codes and policies in place. Ensure you familiarize yourself with the requirements of your own institution to ensure payments are processed correctly. By doing so, you can help ensure your transactions are secure, efficient, and accurate.