ACH Return Codes Explained

ACH return codes identify why the bank or ACH operator returned an ACH payment. Every ACH code begins with the letter “R” followed by a two-digit number—such as R07 or R09.

With ACH return codes, it’s easier for financial institutions to quickly communicate why an ACH payment failed to process. 

ACH codes are standardized and maintained by NACHA—the governing organization for the Automated Clearing House network. 

Understanding ACH returns is crucial for any business that accepts ACH payments. This guide contains the full list of ACH return codes so you can better understand why the ACH was returned and what to do about it. 

What Are ACH Returns?

An ACH return means that the ACH (Automated Clearing House) was unable to collect funds from a customer account on an ACH payment, which is an electronic payment between banks for businesses in the US. 

Every ACH return comes with a three-character reason code to explain why the transaction failed. 

There are lots of different reasons why an ACH payment might be returned, including invalid account numbers, insufficient funds, revoked authorization, and more. 

ODFI vs. RDFI

As you’re looking through different ACH return codes and explanations, there’s a good chance you’ll see the terms ODFI and RDFI. Here’s what they mean:

• ODFI: Originating Depository Financial Institution — This financial institution has agreements with an ACH operator (Federal Reserve or Clearing House) to transmit entries through the ACH network on behalf of the originator. Most banks are ODFI-approved, which allows them to send ACH transfers. Other ODFIs may include payment gateways, payment processors, and payment APIs.
• RDFI: Receiving Depository Financial Institution — This is the financial institution that’s being debited or credited for an ACH payment. Similar to ODFIs, all major banks, payment gateways, and payment processors are typically RDFI-approved. 

In simple terms, the ODFI represents the financial institution that initiates the transaction, and the RDFI represents the bank that’s being charged (or refunded). 

Most Common ACH Return Codes

There are more than 80 different ACH return codes. But the first ten are the most common ones that a merchant would likely see on a day-to-day basis.

R01 — Insufficient Funds

The account balance is not high enough to cover the debit entry amount. You can retry the transaction when enough funds are in the account. 

R02 — Account Closed

A previously active account is now closed. The customer would need to provide ACH payment details from an active account.

R03 — No Account or Unable to Locate Account

While the structure of the account information is valid, it does not match the person identified in the entry. It could also mean that the account is not actually open or that the customer’s name doesn’t exactly match the name on the account. 

R04 — Invalid Account Number

The structure of the account provided is not valid. Double-check that the customer has provided the correct account details. 

R05 — Unauthorized Debit to Consumer Account Using Corporate SEC Code

A debit entry was transmitted to the consumer account, but the receiving party did not authorize the entry. 

R06 — Returned per ODFI Request

The ODFI requested that the RDFI return the ACH entry. You’d need to contact the ODFI for a resolution. 

R07 — Authorization Revoked by Customer

The customer who initially authorized the ACH payment has revoked their authorization. In this case, the merchant should find out why the authorization was revoked and suspend any recurring ACH payments associated with that account. 

R08 — Payment Stopped

A stop payment order has been placed on a recurring debit transaction. 

R09 — Uncollected Funds

The account ledger balance would satisfy the dollar value of the transaction, but the available balance is insufficient. This can happen with pending or uncollected checks. If this happens, you can retry the transaction up to two times within 30 days of the initial authorization date after the pending funds clear the account. 

R10 — Customer Advises Unauthorized, Improper, Ineligible, or Part of Incomplete Transaction

The receiver notified the RDFI saying that the entry request is not authorized, improper, ineligible, or is part of an incomplete transaction. Merchants should suspend any recurring payments and contact the customer for a resolution to prevent any further disputes. 

Other ACH Return Codes List

Remaining ACH return code reasons include:

• R11 — Customer Advises Not Within Authorization Terms
• R12 — Account Sold to Another DFI
• R13 — Invalid ACH Routing Number
• R14 — Representative Payee Deceased
• R15 — Beneficiary or Account Holder Deceased
• R16 — Account Frozen Returned per OFAC
• R17 — File Record Edit Criteria or Suspicious Entry With Invalid Account
• R18 — Improper Effective Date
• R19 — Amount Field Error
• R20 — Non-Transaction Account
• R21 — Invalid Company ID
• R22 — Invalid Individual ID
• R23 — Receiver Refused Credit
• R24 — Duplicate Entry
• R25 — Addenda Error
• R26 — Mandatory Field Error
• R27 — Trace Number Error
• R28 — Routing Number Check Digit Error
• R29 — Unauthorized by Corporate Customer
• R30 — RDFI Not in Check Truncation Program
• R31 — Permissible Return
• R32 — RDFI Non-Settlement
• R33 — Return of XCK
• R34 — Limited Participation DFI
• R35 — Improper Debit
• R36 — Improper Credit
• R37 — Source Document Presented
• R38 — Stop Payment on Source Document
• R39 — Improper Source Document
• R40 — Return of ENR
• R41 — Invalid Transaction Code
• R42 — Routing Number or Check Digit Error
• R43 — Invalid DFI Account Number
• R44 — Invalid Individual ID Number
• R45 — Invalid Individual or Company Name
• R46 — Invalid Representative Payee Indicator
• R47 — Duplicate Enrollment
• R50 — State Law Affecting RCK Acceptance
• R51 — Ineligible or Improper Item Related to RCK
• R52 — Stop Payment on Item Related to RCK
• R53 — Item and RCK Presented for Payment
• R61 — Misrouted Return
• R62 — Erroneous or Reversing Debit
• R67 — Duplicate Return
• R68 — Untimely Return
• R69 — Field Error
• R70 — Permissible Return Not Accepted or Not Requested by ODFI
• R71 — Misrouted Dishonored Return
• R72 — Untimely Dishonored Return
• R73 — Timely Original Return
• R74 — Corrected Return
• R75 — Return Not Duplicate
• R76 — No Errors Found
• R77 — Non-Acceptance of R62
• R80 — Non-Participant in IAT Program
• R81 — IAT Coding Error
• R82 — Invalid Foreign RDFI Identification
• R83 — Foreign RDFI Unable to Settle
• R84 — Not Processed by Gateway
• R85 — Incorrectly Coded Outbound International Payment

ACH Returns and ACH Return Codes: Top Questions Answered

Here are some of the most common questions we hear about ACH returns.

How Much Do ACH Returns Cost?

ACH return fees typically cost between $2 and $5 per return. 

How Long Does an ACH Return Take?

Most ACH return codes take two banking days to process. But depending on the reason code, the turnaround time could be slightly or significantly longer. For example, return codes related to  unauthorized debit on a consumer banking account typically have a 60-day timeframe. That’s because banking laws tend to be customer-friendly. 

Can You Dispute ACH Returns?

Yes, ACH returns can be disputed if they meet specific criteria. Merchants can request the ODFI to dishonor returns if the transaction was:

• Duplicate
• Misrouted
• Contained incorrect information
• Not returned within the correct time frame
• Led to the unintended credit to a receiver during a reversal

All disputes must be sent within five banking days of the ACH return settlement date. The RDFI can also contest the returns. If returns are contested by the RDFI, then merchants would need to recover funds somewhere other than the Automated Clearing House network. 

What Happens When an ACH Payment is Returned?

ACH payments can be returned for a variety of reasons, which is where the return codes come from. The most common reasons include invalid account numbers, insufficient funds, or revoked authorizations. 

Regardless of the reason, here’s what the ACH return process looks like:

1. The ODFI submits a request for funds
2. The request is sent by an ACH operator the bank that holds the accounts
3. The request goes unfulfilled (for whatever reason), so the operator returns the funds

When the return comes back to the original requestor, it will come with an ACH return code and an ACH return fee. 

It’s up to the initial requester to ultimately take the next steps to collect payment—whether it’s contacting the customer for updated account information, requesting another bank account, requesting another payment method, or something else. Depending on the ACH return code reason, sometimes it makes sense for the original requester to try again. 

Final Thoughts on ACH Return Codes

When you accept ACH payments, you’ll eventually run into ACH return codes—this is just a reality of these types of transactions. 

If you get an ACH return code but don’t know what it means, just come back to this guide to look it up. For the most common ACH return codes, you’ll even see suggested actions to take based on what happened.