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ACH Return Codes: The Complete List

Read Time: 6 min

ACH return codes are a reality if you rely on ACH payment processing to accept customer transactions. While a convenient way to pay, on occasion, you may have an ACH return. NACHA governs the Automated Clearing House (ACH) network and they return reason codes when an ACH payment cannot go through. Understanding why they happen and how to deal with them is an important step in learning about ACH return codes. In addition to each code, there are also other factors to understand like the ACH return fee. In this blog, we’ll supply you with the complete ACH return codes list as well as information about why you may be receiving any number of these codes.

What is an ACH Payment?

Automated Clearing House payments (ACH) are a method of electronic bank-to-bank payments that United States-based businesses use. They depart from other electronic card processing because they utilize the ACH network and connect from bank account to bank account rather than a virtual terminal or payment gateway.

What happens if an ACH payment is returned?

When an ACH return occurs, it means that the funds couldn’t be collected from the customer’s account. ACH payments can come back returned for a variety of reasons. Some of the frequent reasons include that the customer has insufficient funds, an invalid account number, or revoked authorization.

An ACH operator can request a return of funds by generating an ACH debit return from the receiving depository financial institution (RDFI). Here are the steps a returned ACH payment take:

  1. ACH submits a request for the funds.
  2. The request is sent to the bank holding the accounts.
  3. The bank can’t fulfill the request for some reason, so the operator sends the funds back.
Man looking puzzled after receiving an ACH return code

ACH return codes are what NACHA uses to explain why the funds came back. This code will come back to the original requester with an ACH return fee.

Another thing that you should know is how “notice of change” (NOC) can also play a role in the ACH debit return process. This can happen when customers change their bank account information.

When this happens, the requesting business will submit outdated information, but the updated information will be sent back to them. This updated information is referred to as a notice of change. It requires that the business has the customer’s bank account information updated before submitting another request.

What are ACH Return Codes?

ACH return codes are numbers that come back to requesters when ACH funds can’t be collected from a customer’s account. Similar to credit card decline codes, these codes give more information about why the problem occurred. You should know the following two terms to assist you when you come across an ACH return:

  • Originating Depository Financial Institution (ODFI): The financial institution that has an agreement with The Clearing House or Federal Reserve (ACH operator) to transmit Entries on the ACH network on behalf of the originator
  • Receiving Depository Financial Institution (RDFI): The bank that is being refunded or charged

Read to learn more information on ODFI & RDFI.

There are over 80 different ACH return codes that differ based on the nature of the problem. We’ll list the ten most common codes to watch out for below.

List of NACHA ACH Return Codes

Most of the ACH return codes that you will come across will fall into the list above. Here are some of the less common ACH return codes that may also occur:

Other return and ACH status codes

There are other ACH return codes to be aware of as well. These are ones that you are much less likely to experience, but you should still know exist:

Biggy bank and coins symbolizing what a merchant could face if they run into too many ACH return codes

If the ACH return code that you’re experiencing is with an office of a financial agency that resides outside of the U.S., the following ACH return reason codes are used for International ACH Transactions (IAT):

What is the Time Frame for ACH Debit Return?

The turnaround for an ACH debit return is typically about two banking days. There might be a longer time frame for some ACH return reason codes. Check with your merchant service provider for more information regarding the timeline you can expect.

Generally, How Much is the ACH Return Fee?

As mentioned earlier, each provider can have varying terms and conditions. Generally, ACH return fees can range from $2 to $5 for each return. The conditions for these will depend on the agreement you signed with your initial ACH processing setup.

Can I Dispute a Returned ACH Payment?

While ACH returns can be frustrating there are some actual reasons you can file a dispute over a returned ACH payment. You may dispute an ACH return if:

  • It was a duplicate
  • It was misrouted
  • Information was inaccurate
  • The return didn’t occur within the expected time frames
  • An unintended credit to the receiver was the result of the reversal

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