Checks are returned for a variety of reasons, most commonly for insufficient funds in the payer's account. We wait until the NSF deadline, which is the close of business (i.e., 5PM Pacific Time) on the first banking day after the settlement date. For example, if the Settlement Date is Monday, the deadline will be 5PM PT on Tuesday. If the Settlement Date is Friday, the deadline will be 5PM PT on next Monday. If next Monday is a FRB holiday, the deadline will be 5PM PT on next Tuesday. If there are still insufficient funds in the payer's account at the NSF deadline, Column will return the check to the payee's bank, the bank of first deposit (BOFD). In most cases, the BOFD will attempt to re-clear the check in the next settlement window.
If the payer's account was funded prior to the next settlement window, Column will process the check and debit the payer's account. If there are still insufficient funds in the customer's account or a stop payment instruction is in place, Column will return the check. At this point, the BOFD cannot re-clear the check.
If a check is returned and re-cleared by the BOFD, it can be returned a second time. Thus, a single check transfer can have multiple returns associated with it.
User Initiated Returns
A check payer has the ability to initiate a check return after the check has successfully cleared (in
settled status) if the check was not authorized (return reason Q) or is suspected counterfeit (return reason N).
Column will automatically return checks for a number of reasons including check number not found, positive-pay mismatch, and account number not found. Column will also automatically return checks that have stop payment instructions.
Valid Return Codes
|A||NSF - Not sufficient funds|
|B||UCF - Uncollected funds hold|
|E||UTLA - Unable to locate account|
|F||Frozen account - account has restrictions placed on it by either the customer or bank|
|L||Signature irregular - suspected forgery|
|N||Altered/fictitious item - suspected counterfeit|
|O||Unable to process such that critical payment information is missing|
|P||Item exceeds stated max value|
|R||Branch or account sold|
|S||Refer to maker|
|T||Item cannot be re-presented (exceeds number of allowable times the item can be presented)|
|U||Unusable image - image could not be used for required business purpose|
|W||Cannot determine amount - amount cannot be verified|
|X||Refer to image - return reason information is contained within the image of the item|
|Y||Duplicate presentment. Supporting documentation shall be readily available|
|Z||Forgery - an affidavit shall be available upon request|
Notifications and States
When a check transfer is returned, Column creates a check return object. Check return objects do not have webhooks, as events are mapped to those on the check transfer object. Below are the states a check return object may go through.
|Scheduled||An incoming debit return has been user initiated or received from the BOFD. The check transfer is in a pending return state.|
|Processed||The incoming debit has been returned by Column. The check transfer is in a returned state.|