R25

What Is ACH Return Code R25?

ACH return codes are used to identify the reason an ACH payment has been returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures.

ACH Return Code R25, also known as "Addenda Error," is a standard code used in Automated Clearing House (ACH) transactions. This code is utilized to indicate that there is an error with the addenda information associated with the entry. Addenda records contain supplementary details about the payment, and an error in this information may hinder the proper processing of the transaction.

How To Address ACH Return Code R25

Nacha prescribes separate rules for handling each return code since each one represents a unique scenario. ODFIs (Originating Depository Financial Institutions) and RDFIs (Receiving Depository Financial Institutions) are responsible for handling ACH return codes according to these rules.

The official definition of R25 from Nacha is, “Addenda record indicator value is incorrect.” Essentially, this means that the addenda type is incorrect, out-of-sequence, or invalid. Since addenda serves to provide additional information about the transaction, it must be correct in order for the transaction to process. The RDFI must return the transaction with code R25 within the next file delivery time following processing.

If you encounter R25, your first step should be to determine what about the addenda record is causing the transaction to be returned. This could include:

• The value of the addenda record being above the maximum threshold for the transaction. In which case, changing the addenda number to below the maximum should correct the issue with the transaction.
• The sequence of the addenda being out of order. In which case, changing the addenda number to 1 should correct the issue with the transaction.
• The addenda record is missing altogether. In which case, adding the relevant addenda record should correct the issue with the transaction.

What Is An ACH Return Code?

ACH return codes identify the reason an ACH payment was returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures. Each code begins with 'R' followed by a two digit number. ACH return codes are standardized and maintained by NACHA, the governing body for the ACH network.