ACH payments have become a popular and convenient method for transferring funds electronically, but it’s important to understand the various return codes associated with them, including ACH return code R77. To better understand what the R77 return code means, you’ll first need to familiarize yourself with some relative banking terms.
It all starts with the Automated Clearing House (ACH), which is the network that financial institutions and banks in the United States use to connect electronically. The National Automated Clearing House Association (NACHA) is a non-profit corporation that governs the ACH network. ACH payments are one of the many types of Electronic Fund Transfers (EFT) that route payments from one financial institution to another. The two main parties that play key roles in ACH transactions are the ODFI and the RDFI. The Originating Depository Financial Institution (ODFI) is the bank that initiates payments on behalf of its users, and the Receiving Depository Financial Institution (RDFI) is the bank that receives funds on behalf of its users.
Now that the hard stuff is out of the way, let’s move on to ACH return codes. ACH return codes are a product of returned transactions, with each return code explaining the reason for the error. In this article, we’ll delve into what the R77 return code means, its formal definition, and the possible solutions to fix it.
What Does ACH Return Code R77 Mean?
Specifically with R77, the error has to do with return code R62. ACH return code R62 indicates that an unintended credit was given to the recipient due to ODFI reversals. It can be used for two types of reversals. The first is when an unintended ACH debit entry and subsequent reversal credit entry are transmitted to the receiver’s account. And the second happens when the recipient’s account is credited for unintended credit entries, and the debit reversals are returned.
So, what does ACH return code R77 actually mean? There are two possible reasons that you might receive it.
- The RDFI has returned both the incorrect transaction and the related reversed ACH payment.
- The funds from the R62 dishonored return can’t be received from the recipient.
At this point, the RDFI can use the code to contest the receipt of the dishonored return under code R62. The RDFI can only use this code when it has returned both the incorrect transaction and the reversed ACH payment, or when it is unable to retrieve the funds from the recipient under reason code R62.
The formal definition for R77 return code—Non-Acceptance of R62 Dishonored Return is:
The RDFI returned both the erroneous entry and the related reversing entry, or the funds relating to the R62 dishonored return are not recoverable from the Receiver.
Solutions to Fix R77 Return Code
ACH return code R77 has two possible fixes. First, contact the RDFI to identify which of the two reasons mentioned above, applies to your situation. Once you get in touch with an agent from the RDFI’s ACH department, they should be able to provide you with the necessary details about why it happened. In the first scenario, you’ll need to be patient and wait for the RDFI to correct it. If it’s the second, you’ll need to check with the recipient and sort it out with them. Once you’ve resolved the issue, you can continue accepting ACH payments at your business.