Most Common Causes of ACH Chargebacks

ACH chargebacks fall into two basic categories—transactions rejected by the banks directly and transactions disputed by your customers.


Two ACH Return Codes are used for transactions rejected by the banks directly:

All other ACH chargebacks are a result of your customer taking action to dispute a charge or to remove the authorization to debit their bank accounts. However, unlike with credit card transactions, the reasons that a customer can use to dispute an ACH transaction are very limited. In fact, there are only three permissible reasons to dispute an ACH debit:

  1. The transaction was never authorized or the authorization was revoked.

  2. The amount debited was not the authorized amount.
    NOTE: You must process the payment for the EXACT amount authorized—amounts higher or lower are grounds for a chargeback.

  3. The transaction was executed BEFORE the authorized date. (Any date after the authorized date is not grounds for a chargeback.)

ACH Return Codes R10 (for consumer accounts) and R29 (for business accounts) will be used when a customer claims that a transaction was not properly authorized for one of the above reasons. For revoked authorizations (such as a revoked recurring payment authorization) ACH Return Code R07 will be used.


The following are some common things that cause customers to dispute ACH transactions:


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