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R27 ACH Return Code: Trace Number Error

Read Time: 3 min

Processing Automated Clearing House (ACH) payments doesn’t always run smoothly. Sometimes you find yourself in a position in which an error occurs and you don’t know how to proceed. Such errors produce ACH return codes, which means the ACH payment was unsuccessful. Today, we’ll examine ACH return code R27, particularly why it generates and how to resolve it. But before that, below is a quick review of ACH payments.

An Automated Clearing House (ACH) payment is an electronic funds transfer (EFT) method. This bank-to-bank transfer is only available to institutions in the United States. These payments are popular among businesses because ACH processing fees are typically lower than processing fees incurred using payment processing methods.

In some cases, ACH payments are unsuccessful, resulting in either a reversal or a return to the sender. While many ACH payments process without a snag, it’s not completely uncommon to encounter an unsuccessful ACH payment. In this case, you receive an ACH return code. There are currently 85 different ACH return codes that may be generated for failed transactions, including ACH return code R27.

What is really important is getting to the bottom of these errors to find a possible solution. Continue reading to discover why ACH return code R27 occurs and how to resolve the underlying error.

What Does ACH Return Code R27 Mean?

business people checking numbers to locate issue causing ACH return code R27

ACH return code R27 means that the original entry trace number, which is supposed to be in the addenda record upon a return or a notification of change is gone. However, there’s another instance in which this error occurs in which the trace number of an addenda record doesn’t match the one on the preceding entry detail record.

Each ACH entry in an ACH file has a unique number assigned by the Originating Depository Financial Institution (ODFI) and that’s called the trace number. It consists of eight digits representing the transit and/or routing number of the ODFI, as well as seven digits representing the sequence number assigned by the originator.

While this may sound complicated, you don’t need to feel uneasy. For such entry errors, there’s always a solution.

Formal definition

The formal definition for ACH return code R27 has two options: (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.

Solutions to Fix R27 Return Code

To resolve ACH return code R27, you must first identify where the problem occurred. To identify this, enter the original entry trace number in the addenda record on a return or notification of change entry. The next step is checking if the trace number of the addenda record is or is not the same as the trace number of the preceding entry detail record. If it’s not matching, then you should write the same number.

While ACH return codes, such R27, may be frustrating, they’re typically easy to resolve. Don’t let fear of return codes keep you from the simplicity of accepting ACH payments at your business.

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