ACH Return Codes: Why an eCheck Comes Back and What to Do

Type a code (R01) or a word ("closed", "stop") to find what it means, how long the bank has to send it and what to do next. The list covers the codes a business taking eCheck payments is likely to see.

Code names follow the Nacha Operating Rules. Your gateway's report may word them a little differently.

A handful of codes make up most returned eChecks. They fall into four groups, and each group needs a different response. The full wording and deadline for each is in the return code lookup above.

R01 and R09: not enough money (NSF eChecks)

R01 means insufficient funds. R09 means the money is there but hasn't cleared yet (uncollected funds). These are the classic NSF eCheck, the electronic version of a bounced check. The customer usually meant to pay. You can retry, within limits (retry rules below), or contact them for another payment.

R02, R03 and R04: bad or closed account

• R02: the account is closed.
• R03: no account, or the bank can't find it.
• R04: the account number isn't a valid format.

Nacha calls these administrative returns. Don't retry them with the same details. Contact the customer for a new account and a new authorization. These three count toward the 3.0% administrative limit, so they're a sign your checkout or data entry needs tightening.

R10, R11, R05 and R29: unauthorized

R10 means the customer told their bank they don't know you or never authorized the debit. Since April 1, 2021, Nacha splits off R11 for a payment the customer did authorize but that had an error, like the wrong amount or an earlier date than agreed. R05 is a consumer account debited under a business-only SEC code (the code that says how the payment was authorized). R29 is a business customer saying the debit wasn't authorized.

These are the returns that hurt most. They count toward the 0.5% limit and work much like a card chargeback. After an R10, stop debiting that account until you have a new authorization. After an R11, Nacha lets you fix the error and send a corrected payment within 60 days of the return without a new authorization. Your best defense is a clear authorization record; see ACH SEC codes and authorization rules.

R07, R08, R16 and R20: the customer or bank stopped it

• R07: the customer revoked their authorization. Treat it as a cancellation, and don't charge again without a new one.
• R08: the customer stopped this payment. Talk to them before the next one.
• R16: the account is frozen. Nacha has approved a new R90 code for sanctions-related returns, effective March 17, 2028; after that date R16 means "account frozen" only.
• R20: the account can't take this kind of debit (a non-transaction account, such as some savings accounts). Ask for a checking account.

How long can an eCheck come back? It depends on the code and the type of account.

Nacha's rules count return deadlines in banking days from the settlement date, the day the money moves between banks. Weekends and Federal Reserve holidays don't count. Nacha's own rule pages refer to the standard "two-day" return timeframe and give R11 a 60-day timeframe, with the same written-statement requirement as R10.

What that means for you: after about a week, an NSF return is very unlikely. But a consumer can still dispute a payment as unauthorized for about two months. For how this fits with funding, see how long an eCheck takes to clear.

Nacha calls sending a returned payment again "reinitiation." The rules, from Nacha's rule pages (in effect since 2015, clarified January 1, 2019):

• Two retries at most. Nacha says reinitiation "is limited to 2 times."
• Label it. The retry must say RETRY PYMT in the Company Entry Description, the short description the customer sees on their statement.
• Keep it identical. Company name, company ID and amount must match the original. Other fields can change only to fix an error or help processing.
• Only for the right codes. Retries are for "not enough money" returns (R01, R09). Don't retry an unauthorized return (R10) or a revoked authorization (R07). Nacha lets a bank return a payment that breaks the retry rules as R10, which counts toward your unauthorized rate.

Time the retry. A retry the next morning usually bounces again. Many businesses wait for the customer's likely payday, or call first and agree on a date. If you plan to charge a returned-payment fee, put it in your authorization and check your state's limits.

Some gateways retry automatically and some don't. Ask your provider how retries work on your account, and whether the retry carries the RETRY PYMT label.

Nacha, the body that writes the ACH rules, sets three return-rate levels for debits. They've been in effect since September 18, 2015, and Nacha's how-to-calculate sheets (updated January 2024) still list them:

How it's counted. Returned debits divided by debits sent, over the preceding 60 days or two calendar months. It's a count of payments, not dollars. Example: 500 returns on 100,000 debits is 0.5%.

What happens if you go over. Nacha's rules apply to the ODFI, the bank that sends your payments into the ACH network. Your provider works with that bank.

• Unauthorized over 0.5%: Nacha can ask the bank for information. If the bank agrees the rate is too high, it must give a plan to bring it below 0.5% within 30 days. Cases that aren't answered or fixed can lead to fines against the bank.
• Administrative or overall over the level: Nacha says this isn't automatically a rules violation. It starts a review of how the business collects payments.

In practice, a bank facing that review often passes it on. Your provider may ask you to change how you collect authorizations, set limits, hold funds or, in serious cases, stop your eCheck processing. Terms differ by provider, so read yours.

A notification of change (NOC) isn't a return. The payment went through, but the customer's bank is telling you a detail was wrong or has changed, for example a new account number after a bank merger. NOC codes start with C: C01 is a wrong account number and C02 a wrong routing number. Authorize.Net's developer guide says NOC codes let you "learn of changes to a customer's banking information."

Update the saved details before the next charge, especially on recurring billing. Bank guidance commonly cites a Nacha deadline of six banking days after you get the NOC, or before the next payment, whichever is later. Ask your provider how NOCs reach you and whether the gateway updates stored details for you.

Every return costs you something, even when the customer pays later. Authorize.Net's direct pricing, checked October 13, 2026, lists:

• $3.00 for each returned eCheck transaction
• $25.00 for each eCheck chargeback

The pricing page doesn't say which returns it counts as a chargeback. In everyday use, an "eCheck chargeback" is an unauthorized return such as R10. These are Authorize.Net's direct prices, not START's. Through a provider, return and chargeback fees vary, so ask for them in writing. For the full fee picture, see eCheck and ACH processing fees.

The hidden cost is bigger: the goods or service you've already delivered, staff time chasing the payment, and a return rate that can put your eCheck setup at risk.

1. Validate account numbers. For online (WEB) debits, Nacha has required account validation on first use of an account number since March 19, 2021. Authorize.Net has checked the account number as well as the routing number on WEB payments and the first recurring payment since March 18, 2022. That cuts R03 and R04 returns. It isn't a balance check, so R01s still happen.
2. Get a clear authorization and keep it. Use the right SEC code and wording for how the customer agreed. Ready-made wording is in our ACH authorization form templates.
3. Use a name customers recognize. Many R10s come from a customer who doesn't recognize the charge. Make the company name on their statement match your business name.
4. Remind before recurring debits. A short email a few days before each charge, with the date and amount, cuts both NSF returns and "I forgot" disputes.
5. Charge on the agreed date and amount. Charging early or the wrong amount is exactly what R11 is for.
6. Make cancelling easy. A customer who can cancel with you won't need to ask their bank to stop it (R07, R08).
7. Hold high-value orders. For big tickets, consider waiting until the two-day return window has passed before you ship.

Taking cards too? Card disputes follow different rules; see our card chargeback prevention guide. For the bigger picture on fees, timing and setup, start with our eCheck processing guide.

If returns are already a problem, tell us which codes you're seeing and how customers authorize payments. We'll tell you where to start.