Reducing ACH Returns

Below are best practices for preventing ACH returns and for dealing with the specific reasons for returns when they do occur.

As a general rule, the best advice is to:

  1. Read the account balance immediately after an IAV.
  2. Submit an ACH transaction as soon as possible after an IAV.
  3. Run a balance check and read the account balance before submitting future ACH transfers for an account.

R01 — Insufficient Funds

Preventative Steps:

  1. Read the account balance immediately after an IAV to confirm there are sufficient funds.
  2. Submit an ACH transaction as soon as possible after an IAV.
  3. Run a balance check and read the account balance before submitting future ACH transfers for an account.

What To Do If You See This Return Code:

Wait until there are sufficient funds before submitting another ACH transaction for the account.

R02 — Account Closed

Preventative Steps:

Run a balance check and then read the account details to confirm that the account is still open: is_closed: false.

What To Do If You See This Return Code:

  1. Stop all future transfer requests for this account.
  2. Have the end user verify a different account.

R03 — Account Not Found

What To Do If You See This Return Code:

  1. Make sure that an account owner verification (identity) has been performed before initiating an ACH transaction.
  2. Confirm that the name provided by the end user is the same as the one from the account owner verification.

R04 — Invalid Account Number

Preventative Steps:

Confirm that the passed_validation field is true before submitting an ACH transaction for the account.

What To Do If You See This Return Code:

Stop all future transfer requests for this account.

Run Only One IAV Per Account

There is usually no need to run multiple IAV jobs for a single account. Once you have the account and routing/transit numbers, these can be reused any number of times, for instance, for multiple future ACH transfers. There is no need to run an IAV before each ACH transfer with the same account.

However, for ACH transfers that occur more than a few hours after the initial IAV, you must run a balance check and read the account balance in order to confirm the account is still open and there are sufficient funds in it.