What steps can I take to prevent ACH returns?

Jul 22, 2025
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Title
What steps can I take to prevent ACH returns?

Summary
Return codes can happen regardless of the number of safeguards in place. Depending on the type of returns you are receiving, there are several best practices you can implement to help lower returns, prevent losses due to returns and eliminate the need for reversals.

Monitor for excessive returns by end users on your platform.
Have a fraud monitoring and prevention process in place to combat unauthorized returns and malicious users.
Establish transaction limits and tiered onboarding for end users (ex: customers who use your platform for less than 30 days, repeat insufficient funds returns, low transaction volume).
Give your end users an option to cancel a transaction within a set time frame. This can help prevent them from submitting a payment they didn’t intend to and then disputing it as unauthorized.
Conduct balance checks and name returns when verifying bank accounts to ensure your end user’s name matches the account holder’s and there are funds in the account.
Monitor IP address usage. An end user signing in from a new IP address or multiple IP addresses at the same time could indicate fraud.
Build out your own robust Customer Identification Program (CIP) and Know Your Customer (KYC) processes. Collecting additional information from your end users during onboarding can help you understand who they are and what they want to achieve on your platform. Asking for additional documentation such as bank statements and a photo ID can help ensure the person who signed up on your platform is who they say they are.

Please refer to this blog post for more information on ACH returns.

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