ACH Return - Steps for Handling Returns

Effective September 2015 - NACHA Return Item Policy

Merchant accounts receiving a NACHA return item with reason codes: R02, R03, R04, R08, R16 and R29 will automatically be placed on a ACH Days Hold on the day the return is received. This action will be taken on the 1st ACH return.

If the merchant account has not be corrected within 31 days from the 1st ACH return,  the merchant account will closed on the 32nd calendar day to avoid more than 2 ACH returns on an account with the same reason code.

An agent or merchant will need to work directly with SignaPay to ensure the account is closed on all platforms and there are no CD-029/1430 rejects.

Merchant funds will be classified as suspense funds. A merchant with 2 ACH returns will need to work with SignaPay or their agent and follow normal procedures to have funds release once the ACH return has been corrected and any funds released to the merchant.  

Steps to correct Bank Account information for the following ACH return reason codes:  R02, R03, R04

Steps to be taken by client to resolve ACH return reason codes R02, R03, R04

  1. Upon receipt of an ACH return item, contact the agent and/or merchant and advise the ABA/DDA is closed (R02) or incorrect (R03, R04)
  2. The Merchant will need to provide updated and valid ABA/DDA account information.
  3. The bank account information will be updated within the system and the ACH Days Hold  flag will be removed.

 If the account was closed the agent and/or merchant will need to work SignaPay to reopen the account which may take up to 2 weeks.

Steps to resolve ACH return reason codes R08, R16, R29

  1. Upon receipt of an ACH reject item, the merchant will need to contacted and advised of  the reason for the reject which is: a debit block on the DDA account (R29), the account is frozen (R16) or a stop payment (R08) has been placed on the account.
  2. The merchant must contact their financial institution to have the debit block, freeze or stop payment lifted from their account. The bank may request a customer ID number, which will be available from a client services representative at SignaPay.  The merchant will need to provide a written confirmation on bank letterhead indicating the debit block has been removed.
  3. Once we have received the confirmation of the account correction the ACH Reject flag will be removed. 

NOTE: Changing or updating a hold flag without corrective action  is a violation of the NACHA policy and a breach of contract.

 

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