A Guide to ACH Return Codes for Business Owners

ACH transactions can sometimes fail, resulting in a return code being issued. This guide will help you navigate these codes and their implications for your business.
Redde Payments
4 min to read

A Guide to ACH Return Codes for Businesses

As a business owner, understanding ACH (Automated Clearing House) return codes is crucial for managing your electronic payments effectively. ACH transactions are a popular method for transferring funds between banks in the U.S. However, these transactions can sometimes fail, resulting in a return code being issued. This guide will help you navigate these codes and their implications for your business.

What Are ACH Return Codes?

ACH return codes are standardized codes used in the ACH network to indicate why a transaction has been returned by the receiving bank. These codes help both the originating and receiving financial institutions understand the issue and take appropriate action. Each return code starts with the letter "R" followed by a two-digit number.

What Happens in the Case of an ACH Reject?

When an ACH transaction is rejected, the receiving financial institution (RDFI) returns the transaction to the originating financial institution (ODFI) with a specific return code. This return code indicates the reason for the rejection. The ODFI then informs the business or entity that initiated the transaction about the issue.

The typical steps involved in an ACH reject are:

1. Notification: The RDFI sends a return code to the ODFI, specifying why the transaction was rejected.

2. Action Required: The business must identify the issue based on the return code and take appropriate corrective action.

3. Resolution: Depending on the return code, the business may need to contact the customer for updated information, retry the transaction, or take other steps to resolve the issue.

Common ACH Return Codes

Here are some of the most common ACH return codes that business owners should be familiar with:

R01 – Insufficient Funds

1. Description: The account doesn't have enough funds to cover the transaction.

2. Action: Retry the transaction up to two times within 30 days or contact the customer for an alternative payment method.

R02 – Account Closed

1. Description: The account has been closed.

2. Action: Ask the customer for new account information or another payment method.

R03 – No Account/Unable to Locate Account

1. Description: The account number is invalid or doesn't match any account.

2. Action: Verify the account details with the customer and retry the transaction with the correct information.

R04 – Invalid Account Number

1. Description: The account number is incorrectly formatted.

2. Action: Obtain the correct account number from the customer and submit a new transaction.

R05 – Unauthorized Debit Entry

1. Description: The transaction was not authorized by the account holder.

2. Action: Stop any further transactions to this account and resolve the issue with the customer.

R06 – Returned per ODFI's Request

1. Description: The transaction is being returned at the request of the Originating Depository Financial Institution (ODFI), often due to suspected fraud.

2. Action: Contact the ODFI to understand the reason and determine the next steps.

R07 – Authorization Revoked by Customer

1. Description: The customer has revoked authorization for the transaction.

2. Action: Stop recurring payments and resolve the issue with the customer.

R08 – Payment Stopped

1. Description: The customer has issued a stop payment on the transaction.

2. Action: Contact the customer to address the issue and obtain authorization for future payments.

R09 – Uncollected Funds

1. Description: The funds are not available due to uncollected deposits.

2. Action: Retry the transaction up to two times within 30 days or contact the customer for a new payment method.

R10 – Customer Advises Not Authorized

1. Description: The customer claims the transaction was unauthorized.

Action: Verify the transaction details with the customer and resolve any discrepancies before attempting a new transaction.

Less Common ACH Return Codes

While the above codes cover the most frequent issues, there are several less common ACH return codes that you might encounter:

R11 – Check Truncation Entry Return

Description: The electronic check deposit was not executed correctly.

Action: Correct the underlying error and resubmit the corrected electronic deposit within 60 calendar days.

R12 – Branch Sold to Another DFI

Description: The branch where the account is held was sold to another depository financial institution.

Action: Obtain the customer’s new routing and bank account information, and submit a new transaction.

R13 – Invalid Routing Number

Description: The routing number provided is invalid.

Action: Get the correct routing number from the customer to use when resubmitting the request.

R14 – Representative Payee Deceased or Unable to Continue

Description: The account was managed by someone who is now deceased or incapacitated.

Action: Contact the beneficiary or new representative for the account.

R15 – Beneficiary or Account Holder Deceased

Description: The account holder or beneficiary is deceased.

Action: No further action can typically be taken.

R16 – Account Frozen

Description: The account is frozen due to legal action or other reasons.

Action: Obtain a new payment method from the customer.

R17 – File Record Edit Criteria

Description: There is a discrepancy in the file code, preventing processing.

Action: Identify the fields causing the processing error and correct them.

R20 – Non-Transaction Account

Description: The account is not set up to handle transactions.

Action: Obtain a different account number from the customer.

R24 – Duplicate Entry

Description: A duplicate entry was received for the same transaction.

Action: Review and correct any errors that caused the duplicate entry.

R29 – Corporate Customer Advises Not Authorized

Description: The corporate receiver claims the transaction was not authorized.

Action: Verify authorization with the corporate customer and address any issues before retrying.

R31 – Permissible Return Entry

Description: The corporate receiver authorized the return of the entry.

Action: Contact the receiver to understand the reason for the return and address any issues.

R32 – RDFI Non-Settlement

Description: The RDFI is unable to settle the transaction.

Action: Contact the RDFI to resolve any issues and determine the next steps.

R34 – Limited Participation DFI

Description: The RDFI’s participation in the ACH system is limited, affecting the transaction.

Action: Contact the RDFI to understand the limitations and seek alternative arrangements.

R37 – Source Document Presented for Payment

Description: The source document for the transaction was presented for payment.

Action: Review and correct any errors in the source document and resubmit the transaction.

How Long Does It Take for an ACH Reject to Return?

The time it takes for an ACH reject to return can vary depending on the specific return code and the nature of the issue. Generally, ACH return codes are processed within 2-5 business days. Here are some specific timeframes for common return codes:

· R01 – Insufficient Funds: Typically processed within 2 business days.

· R02 – Account Closed: Usually processed within 2 business days.

· R03 – No Account/Unable to Locate Account: Generally processed within 2 business days.

· R05 – Unauthorized Debit Entry: Can take up to 60 calendar days.

· R07 – Authorization Revoked by Customer: Processed within 60 calendar days.

· R29 – Corporate Customer Advises Not Authorized: Typically processed within 2 business days.

For other return codes, the processing time may vary, but most are resolved within 2-5 business days. It's important for businesses to monitor their ACH transactions regularly and respond promptly to any returned transactions.


Familiarizing yourself with ACH return codes is essential for managing electronic payments efficiently and minimizing disruptions to your cash flow. By understanding these codes, you can better handle returned transactions and maintain smooth financial operations. For more detailed information on ACH return codes and how to effectively manage them, explore the resources and solutions provided by Redde Payments. With Redde Payments, you can ensure a smoother and more reliable payment process for your business.

Ready to take payments the RIGHT way?

It's easy to get started.
Get started now
No contracts, No cancellation fees
Fast approvals with simple setups
Compatible with the most popular programs