Explain ACH return codes

[Papa Carder]

ACH return codes are standardized alphanumeric codes (always starting with "R" followed by two digits, e.g., R01, R03) defined by NACHA (the governing body of the ACH Network in the United States). They explain exactly why an ACH transaction (debit or credit) was rejected or returned by the Receiving Depository Financial Institution (RDFI, i.e., the bank receiving the transaction).

When an ACH payment fails to settle, the RDFI sends back a return entry with one of these codes. This notifies the Originating Depository Financial Institution (ODFI, the sender's bank) and the originator (the business or person initiating the payment) of the issue.

Key Facts About ACH Returns (as of 2026)​

• There are over 85 official return codes (some sources list up to 90+ with recent additions).
• Most returns happen within 2 banking days for administrative/funds issues.
• Customer-authorized returns (e.g., unauthorized) can take up to 60 calendar days.
• NACHA sets return rate thresholds (e.g., overall returns >15% can trigger monitoring/penalties; unauthorized returns >0.5% is a compliance issue).
• In 2026, new rules effective March 20 include enhanced fraud monitoring and a potential new code like R90 (for sanctions compliance returns).
• Returns often incur fees (e.g., $2–$5 per return from your bank or processor).

Most Common ACH Return Codes and Their Meanings​

Here are the top 10–15 most frequently encountered codes (based on industry reports and NACHA data):

Code	Description	Meaning / Common Cause	Timeframe to Return	Who Initiates It	Typical Fix / Next Step
R01	Insufficient Funds	Account lacks enough money (or available balance/reserves) to cover the debit. Most common code overall.	2 banking days	RDFI (bank)	Retry after funds are available; remind payer.
R02	Account Closed	The account was closed by the customer or bank before processing.	2 banking days	RDFI	Get updated banking info from payer; remove old details.
R03	No Account / Unable to Locate Account	Valid format, but no matching open account (or name mismatch). Often wrong routing/account combo.	2 banking days	RDFI	Verify/correct account & routing numbers; re-submit.
R04	Invalid Account Number	Account number fails structure/check-digit validation (wrong length, invalid chars).	2 banking days	RDFI	Double-check entry; correct typos.
R05	Unauthorized Debit to Consumer Account	Consumer did not authorize the debit (or revoked authorization).	Up to 60 calendar days	Receiver (payer)	Stop future debits; investigate authorization records.
R06	Returned per ODFI's Request	Originating bank (ODFI) asked for return (e.g., error on their side).	Varies (often quick)	ODFI	Check with your bank/processor for reason.
R07	Authorization Revoked by Customer	Customer canceled/revoked permission for recurring debit.	Up to 60 calendar days	Receiver	Update records; get new authorization if needed.
R08	Payment Stopped	Customer placed a stop-payment order on the specific entry.	Up to 60 calendar days	Receiver	Similar to R05/R07; contact payer.
R09	Uncollected Funds	Funds not yet collected/available (e.g., hold on deposit).	2 banking days	RDFI	Wait and retry; or use different method.
R10	Customer Advises Not Authorized...	Similar to R05; often for ARC/BOC/POP entries (check conversions).	Up to 60 calendar days	Receiver	Verify authorization; stop processing.
R13	Invalid ACH Routing Number	Routing number doesn't exist or is invalid.	2 banking days	RDFI	Correct routing number (use official ABA lookup).
R16	Account Frozen	Account is frozen/restricted (legal, fraud, etc.).	2 banking days	RDFI	Contact payer; likely need new account.
R23	Credit Entry Refused by Receiver	Receiver refuses a credit (push) entry (rare for credits).	2 banking days	Receiver	Confirm why; use alternative delivery.

Less Common but Notable Codes​

• R17 — File Record Edit Criteria (formatting/mandatory field error).
• R20 — Non-Transaction Account (e.g., savings account can't accept certain debits).
• R29 — Corporate Customer Advises Not Authorized (business version of unauthorized).
• R33 — Return of XCK Entry (rare, check-related).
• Newer/niche (2026+): Potential R90 for sanctions-related returns.

Categories of Returns​

• Administrative / Bank-Initiated (R01–R04, R09, R13, R16, etc.): Fast (2 days); fixable by correcting data.
• Customer / Receiver-Initiated (R05, R07, R08, R10, etc.): Slower (up to 60 days); often indicate authorization issues → higher risk/compliance flags.
• ODFI-Initiated (R06): Originator's bank requests return.

Practical Tips​

• Always verify routing/account numbers before first transaction (use NACHA/ABA tools).
• For recurring payments, keep clear authorization records (written/email consent).
• Monitor return rates — high rates (>15% overall or >0.5% unauthorized) can lead to ODFI penalties or termination.
• If you get a return, your processor/bank will usually notify you with the code and explanation.

If you're dealing with a specific return code on a transaction (e.g., from a Bill Pay attempt to a credit card), share the exact code for more targeted advice. For the full official list, refer to NACHA's Operating Rules (available on nacha.org).