What steps should merchants take after an ACH return to resolve the issue?
When an ACH return occurs, it is important for merchants to act promptly and carefully to resolve the issue. Below is a step-by-step guide on the recommended actions:
1. Understand the Cause of the ACH Return
Begin by contacting the customer to understand why the ACH was returned. Common reasons can include insufficient funds, closed accounts, or blocks on the payment.
If necessary, clarify the situation with the customer and discuss any issues or concerns they may have about the transaction.
2. Decide on an Approach for Resolving the Owed Amount
You have two primary options to handle the situation:
Option 1: Re-debit the Same Bank Account
If the original account is still active, you can authorize a re-debit for the outstanding amount.
Coordinate with the customer to confirm when funds will be available.
Option 2: Use a Different Bank Account
If the original account is closed or blocked, obtain customer authorization to process the debit from a different bank account. Ensure the customer provides accurate and updated account details.
3. Obtain Required Authorizations
Always ensure that you have the customer’s explicit consent before attempting any further debit transactions. This is critical to comply with regulations and maintain customer trust.
4. Coordinate with Your Bank
Before re-attempting a debit, contact your bank to ensure the transaction will be approved.
Confirm that the company ID or descriptor associated with the debit (e.g., your payment processor or service provider) is approved to prevent further rejections.
5. Communicate with the Customer
Keep the customer informed throughout the resolution process. This includes notifying them of any actions you plan to take, such as re-debiting their account or using a new payment method.
Provide clear instructions for any next steps needed on their end to facilitate the resolution.
By following these steps, merchants can effectively address ACH returns while maintaining transparency and trust with their customers. For further assistance, reach out to your payment processor or bank.