Automated clearing house (ACH) transfers are often a convenient and fast way of sending money. However, when something goes wrong, the ACH payment might be automatically returned. If you want to figure out why the payment didn’t process correctly, you need to understand what the ACH return codes mean. What are ACH return codes? This guide will go over all the common codes and explain what to do about them.
ACH Return Code R01
The R01 code means that there were not enough funds for your ACH payments. This return code occurs when you debit a customer’s bank account, but they do not have enough funds in their account for your requested payment.
If this happens, you have a few options. You can talk to the customer, asking them to add funds to the account before you try your transaction a second time. You can also try submitting small payment requests in the hopes that their account still has some funds left.
ACH Return Code R02
If you get the R02 code with your returned ACH payment, it means that someone has closed the account. This can happen when the customer has closed their account or when the RDFI has stepped in to close the account.
When you get this code, it can be tricky to receive payment. Typically, you should halt service to the customer until you can clear things up. Try contacting the customer and ask them for a different bank account. You may need to switch to another payment form if they do not have another account.
ACH Return Code R03
The ACH R03 code means that the account number you entered has a valid structure, but the actual account does not exist. This code usually occurs when you entered a routing number or account number incorrectly. It can also show up if the customer’s name does not match the account number.
The R03 ACH return code is typically a code that signals user error. You can often fix it just by double checking your information and putting it in correctly. There is also a chance that the customer gave you the wrong information, so check to see if it was a mistake on their end. Getting a voided check from them will help you ensure you have the right information.
ACH Return Code R04
This code is quite similar to an R03 code. Like the R03, it means there is a problem with the account number you entered. However, the R04 code specifies that the numbers you put in were an invalid structure. This usually means you put in a number with too many or too few digits to be an account or routing number.
You can fix this just by finding the right account information and resubmitting your ACH payment requests. Depending on the situation, you may just need to fix a typo, or you might need to get in touch with the customer to get the correct number.
ACH Return Code R07
The R07 code is a bit rare, but it shows up often enough that you need to know what it means. An R07 code means that your customer has revoked their authorization for sending you ACH payments. Can ACH payments be returned this way accidentally? No, the customer has to sign an affidavit, so this return is always intentional.
If a customer revokes ACH authorization for your organization, you should halt services immediately. It will be necessary to discuss the issue with the customer directly. You may need to negotiate other payment options, and in some cases, lawsuits may be necessary.
ACH Return Code R09
An R09 return code symbolizes that there are not enough funds in the account to handle all of its debt. The bank account might have enough funds for your specific ACH transfer. However, due to a high value of uncollected checks, the total available funds are less than the amount of debits for the account.
Like an error code due to insufficient funds, you have the option of just waiting a few weeks and trying the payment again. However, it can often be more effective to discuss the issue with the client. Once the customer adds more funds to the account to cover all the debits, your transfer can proceed.
ACH Return Code R16
A R16 error code signals that the information you entered was fine, but the account cannot process transactions anymore. An R16 code only occurs when someone has frozen the bank account. This may happen due to RDFI actions or due to legal actions.
You cannot get the account unfrozen yourself, so you will need to halt payments for the time being. Depending on the situation, the customer may be able to provide you with an alternative account to use for payments.
ACH Return Code R19
When you notice an R19 error code, you usually just need to double check all the information for your transfer. The R19 means there is a problem with the amount field. An ACH transfer needs to be for an amount that is more than zero, less than $25,001, and contains no non-numeric symbols. So the R19 code pops up when people make typos.
With the R19 code, you just need to check and make sure you submitted a request for a valid amount of funds. If you need a payment of more than $25,000, contact the customer to discuss a new form of payment.
ACH Return Code R20
The R20 code signals that you put in a bank account, which does not allow ACH transfers. Typically, this code pops up when a customer gives you their standard account but does not realize that account cannot do ACH transfers.
Fixing this error code will require a conversation with your customer. You can ask them to provide you with a different bank account number or enable ACH transactions on their current account.
ACH Return Code R24
An R24 error code is a code that means the transaction looks like a duplicate entry. This can happen if the date, dollar amount, and other identifying information for your ACH transfer matches another transaction.
Handling this error can be tricky because the originator might have already reversed one of the duplicate transactions. Generating a reversal transaction for both duplicated items can just cause further hassle. You will need to talk to the customer and your ACH processing service to address the problem.
Ultimately, there are a lot of reasons your ACH transfer might go wrong. Have you encountered any of these error codes before? If you don’t want ACH returns to be a big hassle, Checkissuing.com can help. With our reliable payment services, you get your ACH transfers sent out on time. Get in touch with us today to learn more about our services.
