February 2, 2023
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In the last article "Understanding ACH Returns - Part 1", we discussed some basic concepts of an ACH return and how it works in general. In Part 2, we will review some common return scenarios and how you can leverage Marqeta's API to manage ACH returns. 

 

What are the common return reason codes?

The table below shows a list of common return scenarios return reason codes, and the time frames. For a complete list, please refer to Part 4.2 Table of Return Reason Codes of the Nacha Rules.

 

Code

Title

Time Frame

R01

Insufficient Funds

2 Banking Days

R02

Account Closed

2 Banking Days

R03

No Account/ Unable to Locate Account

2 Banking Days

R04

Invalid Account Number Structure

2 Banking Days

R06

Returned per ODFI’s Request

Not defined, determined by ODFI and RDFI.

R08

Payment Stopped

2 Banking Days

R10

Customer Advises Originator is Not Known to Receiver and/or Originator is Not Authorized by Receiver to Debit Receiver’s Account

60 Calendar Days

R11

Customer Advises Entry Not in Accordance with the Terms of the Authorization

60 Calendar Days

R16

Account Frozen/Entry Returned Per OFAC Instruction

2 Banking Days

R17

File Record Edit Criteria/Entry with Invalid Account Number Initiated Under Questionable Circumstances/Return of Improperly-Intiated Reversal

2 Banking Days

R23

Credit Entry Refused by Receiver

RDFI must transmit the Return Entry to the ACH Operator by the ACH Operator’s deposit deadline for the Return Entry to be made available to the ODFI no later than the opening of business on the second Banking Day following the RDFI’s receipt of notification of refusal of the Entry from its Receiver.

R29

Corporate Customer Advises Not Authorized

2 Banking Days

 

How do I initiate a return using Marqeta’s API?

As Marqeta works closely with our sponsoring banks to automate the ACH return process, Marqeta’s customers and the developer community would not need to worry about generating the ACH return file or account for bank-specific configurations. 

Instead, developers can use Marqeta’s API (see details below) to programmatically return ACH transactions. Marqeta will periodically generate ACH return files based on the data received and then submit to the RDFIs. 

To return an ACH entry, post to the “create a direct deposit transition” endpoint and update the transaction state to “REVERSED”

Note that when processing ACH debits, if your program uses Marqeta as the ledger/system of record, Marqeta will perform a balance check first. If there's an insufficient balance in your account, Marqeta would automatically return the ACH debit with R01 - Insufficient Funds. 

 

What is the process to return (“dispute”) unauthorized/improper/incomplete debit entries?

Generally speaking, if a consumer does not recognize the debit entry in the statement or does not believe it’s authorized, RDFIs have 60 calendar days to return the unauthorized debit from the original settlement date. 

There are a few common return reason codes to use when returning such an entry. It’s important to review each case in detail in order to determine and use the most appropriate reason code. Note that a Written Statement of Unauthorized Debit is required for each case. 

 

Reason Code

Description

Written Statement Required?

Time Frame

R05

Unauthorized Debit to Consumer Account Using Corporate SEC Code

Yes

60 calendar days

R07

Authorization Revoked by Customer

Yes

60 calendar days

R10

Customer Advises Originator is Not Known to Receiver and/or Originator is Not Authorized by Receiver to Debit Receiver’s Account

Yes

60 calendar days

R11

Customer Advises Entry Not in Accordance with the Terms of the Authorization

Yes

60 calendar days

 

Please feel free to leave a comment below and let us know if you have any questions or feedback!

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