ACH payments are one of the most efficient ways to move money between U.S. bank accounts. They reduce processing costs, improve cash flow, and make recurring payments simple. Still, even the most reliable ACH systems occasionally face failed transactions. When that happens, the transaction is assigned an ACH return code that tells you why it was returned.
This guide from covers what ACH return codes are, why they occur, and how to minimize them. We also include the full NACHA ACH return code list for reference.
What Is an ACH Payment
An ACH payment is an Automated Clearing House transfer that moves funds electronically between bank accounts. Unlike card transactions, which run through credit networks, ACH payments move directly between financial institutions through the NACHA network. They are commonly used for payroll, bill payments, and subscription billing.
For businesses, ACH is a cost-effective way to collect payments without card fees or manual invoicing.
What Happens If an ACH Payment Is Returned
An ACH return happens when the customer’s bank cannot process a debit or credit entry. Common reasons include:
- Insufficient funds
- Closed or invalid account
- Revoked authorization
- Stop-payment request
When this occurs, the receiving bank sends back a return code that identifies the issue. Returns are usually processed within two business days, though unauthorized transactions may be returned for up to 60 days.
What Are ACH Return Codes
ACH return codes are two-character identifiers defined by NACHA that indicate the reason an ACH payment failed. These codes allow merchants and processors to quickly identify and resolve issues.
Monitoring return codes helps merchants maintain healthy ratios and stay compliant with NACHA’s limits. At Corepay, we help businesses track and reduce return rates using automated alerts and reporting tools through our proprietary Netvalve gateway.
Complete ACH Return Code List
Use this table to understand each ACH return code and what action you should take.
| Code | Meaning | Description / Merchant Action |
|---|---|---|
| R01 | Insufficient Funds | Customer’s account does not have enough funds. Retry after confirming balance. |
| R02 | Account Closed | Account closed. Contact customer for updated banking details. |
| R03 | No Account or Unable to Locate Account | Invalid account or routing number. Verify accuracy. |
| R04 | Invalid Account Number | Account number formatting error. Correct and resubmit. |
| R05 | Unauthorized Debit (Consumer) | Transaction not authorized. Obtain proper written authorization. |
| R06 | Returned per ODFI’s Request | Originating bank requested the return. Confirm with your processor. |
| R07 | Authorization Revoked by Customer | Stop debits until new authorization is obtained. |
| R08 | Payment Stopped | Receiver placed stop payment. Contact customer. |
| R09 | Uncollected Funds | Funds temporarily unavailable. Retry later after confirmation. |
| R10 | Customer Advises Unauthorized or Improper | Verify customer authorization and investigate validity. |
| R11 | Check Truncation Entry Return | Duplicate check entry. Correct and resubmit if valid. |
| R12 | Branch Sold to Another DFI | Routing number updated. Obtain new account information. |
| R13 | Invalid Routing Number | Routing number incorrect. Verify with financial institution. |
| R14 | Representative Payee Deceased | Identify new authorized account representative. |
| R15 | Account Holder Deceased | Stop transactions immediately. Contact estate representative. |
| R16 | Account Frozen or Blocked | Account frozen by bank or OFAC instruction. Verify before retrying. |
| R17 | File Record Edit Criteria | Data formatting issue. Correct ACH file. |
| R18 | Improper Effective Entry Date | Invalid date entered. Adjust submission date. |
| R19 | Amount Field Error | Invalid amount format. Correct and resubmit. |
| R20 | Non-Transaction Account | Account type cannot process ACH entries. |
| R21 | Invalid Company Identification | Company ID mismatch. Confirm with bank. |
| R22 | Invalid Individual ID Number | Receiver identification number invalid. |
| R23 | Credit Entry Refused by Receiver | Receiver refused credit. Contact for clarification. |
| R24 | Duplicate Entry | Duplicate transaction detected. Review and cancel duplicate. |
| R25 | Addenda Error | Missing or invalid addenda record. Correct formatting. |
| R26 | Mandatory Field Error | Required data field missing. Update ACH file. |
| R27 | Trace Number Error | Incorrect or missing trace number. Correct entry. |
| R28 | Routing Number Check Digit Error | Routing number verification failed. Confirm digits. |
| R29 | Corporate Customer Advises Not Authorized | Corporate debit not authorized. Verify agreement. |
| R30 | RDFI Not Participant in Program | Receiving bank not part of required ACH program. |
| R31 | Permissible Return Entry | Return allowed under NACHA rules. Review reason. |
| R32 | RDFI Non-Settlement | Bank unable to settle. Confirm with ODFI. |
| R33 | Return of XCK Entry | Error related to check conversion. |
| R34 | Limited Participation DFI | Bank not participating. Choose alternate method. |
| R35 | Improper Debit Entry | Incorrect debit type or authorization. |
| R36 | Improper Credit Entry | Incorrect credit type or information. |
| R37 | Source Document Presented for Payment | Duplicate paper document. Cancel ACH resubmission. |
| R38 | Stop Payment on Source Document | Payment stopped on original source. |
| R39 | Improper Source Document | Invalid source document provided. |
| R40–R47 | Federal or Identification Errors | Errors related to government ENR or invalid IDs. |
| R50–R53 | RCK Entry Errors | Returned check conversion issues. |
| R61–R77 | Administrative or Timing Errors | Misrouted, duplicate, or late returns. |
| R80–R85 | International ACH Errors | Errors related to foreign bank processing or IAT participation. |
ACH Return Time Frames
Most ACH debit returns must be submitted within two banking days of settlement.
Unauthorized transaction codes such as R05, R07, R10, R11, and R29 may be returned for up to 60 calendar days.
ACH Return Fees
ACH return fees typically range from $2 to $5 per occurrence, depending on your processing agreement. Excessive returns may increase your fees or risk thresholds. Corepay helps merchants monitor and reduce return frequency to keep costs low.
Can You Dispute a Returned ACH Payment
You can dispute an ACH return if:
- It was submitted in error or duplicated
- It was misrouted
- Data was incorrect
- It was returned after the allowed timeframe
Corepay assists merchants in filing disputes quickly through our Netvalve gateway to minimize revenue loss.
How to Reduce ACH Returns
Keeping your return ratios below NACHA’s thresholds is critical for compliance:
- Less than 0.5% unauthorized returns
- Less than 3% administrative returns
- Less than 15% overall returns
To reduce returns:
- Verify customer bank details before debits.
- Obtain clear written or electronic authorization.
- Use account verification tools to prevent data entry errors.
- Process Notices of Change (NOCs) promptly.
- Monitor your return reports weekly and address recurring codes.
Why This Matters
High ACH return rates can lead to processing limitations, added fees, or NACHA compliance reviews. By understanding return codes and addressing root causes, you improve cash flow and avoid unnecessary risk.
Corepay’s processing technology and reporting tools help you stay compliant, automate monitoring, and maintain a healthy ACH success rate.
