Resolving ACH returns on merchant deposits
How to resolve ACH returns on your merchants deposits
An ACH return occurs when an ACH transaction is unable to be processed or completed. This typically happens because of an issue with the bank account information provided, insufficient funds, or other account-related problems.
When an ACH return is received on a merchant deposit, future deposits will be held until the return reason has been resolved.
Get notified of a returned deposit
We recommend your platform listen to the following webhooks so your support team and your merchants are notified as soon as a deposit is returned.
| Webhook | When it's triggered | How to use it |
|---|---|---|
| deposit.failed | A deposit was attempted and returned by the merchant's bank. | Identify the returned deposit and the ACH return code explaining why it failed. |
| merchant.funding_deposit_disabled | The merchant's funding deposits have been paused. | Know that the merchant will not receive funds for their payments until the issue is resolved. |
| merchant.billing_deposit_disabled | The merchant's billing deposits have been paused. Only applicable to merchants on gross billing. | Know that billing fees will not be debited until the issue is resolved. |
| merchant.funding_deposit_enabled | The merchant's funding deposits have been re-enabled. | Confirm the issue has been resolved and let your merchant know their deposits have resumed. |
| merchant.billing_deposit_enabled | The merchant’s billing deposits have been re-enabled. | Confirm the issue has been resolved and let your merchant know their deposits have resumed. |
Deposit details
The deposit.failed webhook payload includes all deposit fields returned by the get deposit endpoint. The following fields will help you identify the merchant and the reason the deposit was returned:
| Field | Description |
|---|---|
| deposit_id | The unique deposit identifier. |
| merchant_id | The unique merchant identifier for the merchant whose deposit was returned. |
| amount | The amount of the deposit, in minor units. |
| failure_code | The ACH return code explains the reason the deposit failed (for example, R03). |
| failure_desc | A description of the reason the deposit failed. This may be presented to your merchant. |
See the deposit webhooks guide for example internal and merchant notifications you can send when a deposit fails.
Resolve the ACH return
Once you've been notified of a returned deposit, use the following steps to help your merchant resolve the issue:
- Identify the return code - Use the failure_code and failure_desc from the deposit.failed webhook to determine why the deposit was returned.
- Review the return code - See ACH return codes for the definition of each code and the recommended action to resolve it.
- Notify your merchant - Let your merchant know their deposit was returned, the reason for the return, and what they need to do to resolve it.
- Take action to resolve the return - Depending on the return code, you may need to update the merchant’s bank account in the Rainforest portal or confirm from your merchant that they've resolved the issue with their bank.
Below are the most common ACH return reasons on merchant deposits and how you can help your merchant remedy the issue.
R01 - Insufficient funds
Problem
Though the merchant is commonly receiving funds from Rainforest in their deposit, there are times that they may owe funds for payments such as refunds, chargebacks, or ACH returns. If the merchant does not have the funds available, the deposit will return with the ACH return code R01, Insufficient Funds.
Solution
Notify your merchant of the ACH return and reason. Advise them to make adjustments to their account so a debit can be successfully re-attempted. If the merchant does not have the funds, Rainforest will hold future deposits until the negative balance is covered by future processing volume.
R02 - Account Closed / R03 - No Account/Unable to Locate Account / R04 - Invalid Account Number
Problem
Many changes can take place with your merchant after they go through onboarding. Sometimes that includes closing or changing their bank account. If we attempt to deposit funds to an account that is closed, no longer active, or was entered incorrectly, the deposit will be returned.
Solution
Notify your merchant of the ACH return and reason. You will need to collect updated bank account details so Rainforest can re-attempt the deposit. The easiest way is to ask for a voided check or official bank letter that includes the bank account number, routing number, and name on the account. Deposits will resume once the new bank account has been verified.
R29 - Corporate Customer Advises Not Authorized (Debit block)
Problem
Some bank accounts are not automatically set up to have a debit (or even credits) made to that account. If this is the case and Rainforest is attempting to debit the merchant's bank account, the bank will block the attempt and the deposit will be returned with the ACH return code R29, Corporate Customer Advises Not Authorized.
Solution
Notify your merchant of the ACH return and reason. They will need to contact their bank and authorize Rainforest to debit and credit this account. Your merchant may be asked for an ACH ID to remove the block. Reach out to [email protected] for those details. Once the block has been removed, notify Rainforest support so the deposit can be re-attempted.
Updated 7 days ago