Documentation

An ACH Return is the message that describes why an ACH was returned and is accompanied by the corresponding ACH return code defining the reason. Returns need to be viewed from two perspectives - one as the ODFI and the other as the RDFI.

When you're sending payments (Column as the ODFI), some of these payments may be returned by the RDFI. When you're receiving payments to a bank account on Column (as the RDFI) you can initiate returns. Both can be programmatically handled through Column's API and your dashboard.

ODFI - returns when initiating ACH transfers

An ACH Return is sent by the receiving bank (RDFI) through the ACH network in response to an ACH transfer you initiated via Column. The ACH network doesn't send a acknowledgment that an ACH payment has succeeded - the payment is determined successful by not receiving a return.

A return means the transaction was not settled successfully for a reason specified by the ACH Return Code (there are 80+ of these) the RDFI sends back. Common reasons include:

• The receiving account has insufficient funds to cover the account debit (R01)
• The receiving account has been closed or the account number is invalid (R02, R04)
• The owner of the receiving bank account requested a stop payment on the debit (R08)
• The owner of the receiving bank account did not authorize the transaction (R07, R10)

NACHA, the governing body for the ACH network, has specific rules for the time frame within which the RDFI can initiate an ACH return. Most returns need to be submitted within 2 business days, otherwise the transaction will be settled. However, some return codes (e.g. unauthorized claims) can be sent back within 60 calendar days.

After receiving your ACH transfer requests, Column will submit them to the Federal Reserve based on the effective dates of your requests.

• For outgoing debit ACH requests, if we do not receive any returns from the RDFIs for your requests within 2 business days of the effective date, we will settle your transfers and send ach.outgoing_transfer.settled events via webhook endpoints.
• If we receive a return in the defined window , we will mark the transfers as returned and send the ach.outgoing_transfer.returned event via the webhook endpoint. As mentioned above, RDFIs may send returns within 60 calendar days, even after we settle the transfers. In that case, we will mark the transfers as returned and send the ach.outgoing_transfer.returned event as well.

If we do not receive any returns after 60 calendar days, we will make the transfers as completed and send ach.outgoing_transfer.completed events via webhook endpoints. A completed ACH transfer cannot be returned.

Simulating ACH Returns on Outgoing ACH Transfers

We offer the ability to simulate a return on an outgoing ACH. In order to do this, you can set the "receiver_name" field on an outgoing ACH to the following:

RDFI - returns when receiving ACH transfers

For inbound ACH transfers that you receive from other ODFIs (Column is the RDFI for inbound transfers), you can submit requests to return those inbound transfers on behalf of your customers via our ACH Return API. While you can call our API to initiate returns, Column will automatically submit returns on your behalf in a lot of cases. Column automatically submits return for codes R01, R02, R03, R04, R20, R33, R67.

Each inbound transfer can be returned only once (you can verify by checking if ach_transfer.returned_at field is set). You cannot submit requests to return outbound transfers (i.e. ach_transfer.is_incoming = false) that you initiate via our ACH Transfer API..

ACH return statuses

An ACH Return can have the following statuses:

• Initiated: The return request has been created. If returning an incoming credit, funds are removed from the account.
• Sent: The return has been sent to the Fed for processing.
• Dishonored: The return has been dishonored by the ODFI.
• Contested: The return status of the return is contested between ODFI and RDFI. This must be solved manually outside the ACH network.
• Completed: A contested return has been resolved offline and successfully processed.
• Rejected: A contested return has been resolved offline and not processed.

There are strict rules that dictate when you can initiate a return. For administrative returns, you must initiate the return no later than the opening of business on the 2nd banking day following the inbound ACH transfer. For unauthorized returns, the return must be before the opening of business on the 60th calendar day following original inbound ACH transfers.

The ACH Return API accepts the following return codes only:

• The following return codes can be used before the opening of business on the 2nd business day after the settlement date: R01, R02, R03, R04, R08, R09, R12, R14, R15, R16, R17, R20, R21, R22, R24, R29, R39.
• The following return codes can be used before the opening of business on the 60th calendar day after the settlement date: R05, R07, R10, R11, R33, R37, R38, R51, R52, R53.
• The following return codes can be used any number of days after the settlement date: R06, R23, R31.

For certain return codes, you are responsible to collect a copy of signed Written Statement of Unauthorized Debit (WSUD) from your customers. If you'd like help drafting this or would like a template, feel free to email us. The ODFI has the right to request a copy of this WSUD. We'll email you for this document if we get a request, we then have to respond within 10 banking days. The following return codes require copies of signed WSUD: R05, R07, R10, R11, R37, R51, R53.

Return Reason Codes

The following table provides information for all the return codes accepted by our ACH Return API.

Dishonored returns

When you, as the RDFI submit a return, the ODFI can reject your return by submitting a return (against your return) known as a dishonored return entry. Dishonored return entries must be received within 5 banking days after the settlement date of return entries.