{"id":1,"date":"2021-03-01T13:20:00","date_gmt":"2021-03-01T13:20:00","guid":{"rendered":"http:\/?p=1"},"modified":"2025-07-16T17:17:52","modified_gmt":"2025-07-16T21:17:52","slug":"what-is-an-ach-return","status":"publish","type":"post","link":"https:\/\/payliance.com\/what-is-an-ach-return\/","title":{"rendered":"What is an ACH return? How do I prevent them?"},"content":{"rendered":"\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><h2 class=\"wp-block-post-title\">What is an ACH return? How do I prevent them?<\/h2>\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<div class=\"wp-block-group is-nowrap is-layout-flex wp-container-core-group-is-layout-ad2f72ca wp-block-group-is-layout-flex\"><div class=\"taxonomy-category wp-block-post-terms\"><a href=\"https:\/\/payliance.com\/payments-blog\/\" rel=\"tag\">Payments<\/a><\/div>\n\n<div class=\"wp-block-post-date\"><time datetime=\"2021-03-01T13:20:00-05:00\">March 1, 2021<\/time><\/div><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\">What is it?<\/h3>\n\n\n\n<p>An Automated Clearing House (ACH) return is the equivalent of a bounced check. An ACH return occurs when a registrant provides bank information in order to make a payment; however, the payment is returned by the bank for one of many reasons, the most common of which include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li> Insufficient funds<\/li>\n\n\n\n<li> A stop payment<\/li>\n\n\n\n<li> Incorrect account information<\/li>\n<\/ul>\n\n\n\n<p>To back up a little, ACH payments or eChecks are a form of electronic payment that enables merchants and consumers to send funds between one another. ACH payments are regulated by the <a href=\"https:\/\/www.nacha.org\/\" rel=\"nofollow noopener\" target=\"_blank\">National Automated Clearing House Association<\/a> (NACHA), which handles the administration and governance of the ACH network. NACHA is also responsible for the set of rules to be followed anytime an ACH payment fails, otherwise known as an ACH return.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Here\u2019s an example<\/h3>\n\n\n\n<p>As an example, let\u2019s consider the case of a consumer that wants to use ACH to pay a utility bill each month. This requires the utility company (the Originator) to authorize its merchant bank (the Originating Depository Financial Institution or \u201cODFI\u201d) to initiate an ACH debit from the customer\u2019s bank account. The data for this debit entry is sent through an ACH Operator (usually the Federal Reserve Bank) as part of a batch transfer, usually at the end of the day.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"720\" height=\"420\" src=\"https:\/\/payliance.com\/wp-content\/uploads\/2021\/03\/kitchen.jpg\" alt=\"\" class=\"wp-image-198\" title=\"\" srcset=\"https:\/\/payliance.com\/wp-content\/uploads\/2021\/03\/kitchen.jpg 720w, https:\/\/payliance.com\/wp-content\/uploads\/2021\/03\/kitchen-300x175.jpg 300w\" sizes=\"(max-width: 720px) 100vw, 720px\" \/><\/figure>\n<\/div>\n\n\n<p>In the meantime, the ODFI will debit the end customer\u2019s account and credit the Originator\u2019s account, basically creating a hold for the account. The ACH transaction is then sent from the clearinghouse or Federal Reserve Bank to the Receiving Depository Financial Institution (RDFI), or customer\u2019s bank. Upon receipt of the ACH file, the RDFI will note a debit on the customer\u2019s account for the specified amount of money. It\u2019s important to note that no actual money has changed hands up until this point. Settlement for a debit transaction like this typically occurs within one business day once all the banks have resolved at transactions via settlement.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Understanding ACH Returns<\/h3>\n\n\n\n<p>Successful ACH debit transactions can usually be settled within one business day, but ACH payments that are unsuccessful or rejected will spur an ACH return. An ACH return entry can be initiated by the RDFI in order to notify the ODFI that the entry is a return based on an alphanumeric code. In some cases it may be due to lack of sufficient funds (R01), but there are nearly 80 different reasons why an ACH payment may be rejected. Upon rejection, the original entry is returned, usually within two business days. In a few cases (like Return Reason Codes R07 and R10 where the consumer is disputing or revoking authorization), it may take up to two months or 60 calendar days after the transaction was originated to process an ACH return.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>In an ideal world, merchants could avoid ACH returns altogether.<\/p>\n<cite>John Cullen, Payliance CEO<\/cite><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\">Schedule a Consultation<\/h3>\n\n\n\n<p>Interested in learning more about how Payliance can help you avoid and lower ACH returns? Schedule a consultation with Payliance today to discuss the right payments solutions for your business.<\/p>\n\n\n<p>\n  <a href=\"https:\/\/payliance.com\/get-started\/\" target=\"_self\" class=\"button button--blue button--wide\">\n      <span>\n    Schedule a consult today!\n  <\/span>\n      <svg class=\"icon icon--arrow \">\n  <use xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\" xlink:href=\"#arrow\"><\/use>\n<\/svg>\n  <\/a>\n<\/p>\n","protected":false},"excerpt":{"rendered":"<p>An ACH return occurs when a registrant provides bank information in order to make a payment; however, the payment is returned by the bank for many reasons.<\/p>\n","protected":false},"author":11,"featured_media":205,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_eb_attr":"","content-type":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-1","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-payments-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/posts\/1","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/comments?post=1"}],"version-history":[{"count":9,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/posts\/1\/revisions"}],"predecessor-version":[{"id":9887,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/posts\/1\/revisions\/9887"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/media\/205"}],"wp:attachment":[{"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/media?parent=1"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/categories?post=1"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/tags?post=1"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}