If your business accepts Automated Clearing House (ACH) payments, you may encounter an error called ACH return code R25. A return code of any kind usually refers to a specific payment that wasn’t successful. This may happen due to several reasons. Before we jump into the underlying reasons you may have received ACH return code R25, as well as how to troubleshoot this return, we’ll unpack any information you might’ve missed about ACH payment processing and why it’s important for your business.
ACH transactions are a type of electronic funds transfer (EFT) used only by businesses within the United States. It’s basically a bank-to-bank transfer. However, these transfers don’t always complete successfully, as some end up reversed or returned. In these cases, you encounter one of 85 ACH return codes created by the National Automated Clearing House Association (NACHA).
You may see some codes more frequently than others. For example, the ACH return code R25 return code is not as common as some other ones because it regards the addenda. An addenda record, often referred to as the “ACH addenda” or “NACHA addenda record,” is a type of record containing supplemental data for identification and payment purposes.
What Does ACH Return Code R25 Mean?
R25 return code means that there’s an error with the addenda record indicator, thus the transaction cannot go through. This can happen for a few reasons. The addenda type could be incorrect, out of sequence, or altogether missing. Another reason is that the number of addenda records surpasses the maximum allowed amount. R25 return code can also happen when the addenda sequence number is false.
You shouldn’t worry when errors like this happen. There’s usually an easy fix. Continue reading to find out possible solutions for ACH return code R25.
The formal definition for the R25 code is as follows: “Addenda record indicator value is incorrect.”
This happens due to several reasons. The addenda type may be invalid, out of sequence, or missing. The number of addenda records may exceed the allowable maximum. Finally, the addenda sequence number may be invalid.
Solutions to Fix R25 Return Code
Now that we understand why this error comes about, let’s look at the possible solutions.
The first step is checking what caused the error reason. Is it happening because the addenda type is invalid? Is it out of sequence or missing? The easy fix here is to reformat the addenda type. If the value of addenda records you’ve entered is above the maximum threshold, change the value to an amount that won’t exceed the threshold.
If the number sequence is invalid, change the addenda sequence number to one. This is clearly stated in the entry information for ACH return code R25, which states that the sequence can’t be any other value but one.
In short, don’t let something as easy to correct as an ACH return code deter you from accepting ACH transactions at your business today.