Return Process

Created on: 
Sep 01 2017

See ACES Screens and Online Pages for an example of pages or screens used in this chapter.

When is an Electronic Fund Transfer (EFT) pre-note or live dollar transaction returned?

EFT pre-note or live dollar transactions can be returned if the receiving financial institution finds an error condition.

How often are files returned?

Files are returned four to ten times a month.

Who is responsible for replacing benefits?

The user is responsible for initiating a replacement request when needed.

How am I notified of a failed Electronic Fund Transfer (EFT) pre-note or live dollar transaction?

If an EFT pre-note is returned by the financial institution, Alert 052 - EFT PRENOTE TRANS FAILED-CLOSED ACCOUNT is created.  This alert is informational and generates to advise of a failure. Although no specific action is required, on a case by case basis, additional action is needed.

If a live dollar transaction is refused by a financial institution, Alert 053 - EFT TRANS FAILED-CLOSED ACCT-ALT PYMT ISSUED is created.  In some cases, a review is needed to determine whether the issuance should be replaced.

Both of these alerts generate with a description of a return reason code that falls into three general groups. 

 What are the return reason code groups?

Fourteen (14) possible return reason codes have been identified as having the potential to occur with Electronic Fund Transfer (EFT) transactions. The 14 return reasons fall into three general groupings:

  • Group 1 - System Will Complete Actions to Generate Replacement
  • Group 2 - User Action is Needed to Determine if Replacement is Appropriate and Initiate Request.
  • Group 3 - Miscellaneous Exception Conditions

Online Processing​

  What are Group 1 return reason codes?

Group 1– System Will Complete Actions to Generate Replacement

Returned Electronic Fund Transfer (EFT) pre-note:

  • The user of record receives an alert when an Electronic Fund Transfer (EFT) pre-note is returned with a description of a return reason code.  For more information, see Reason codes for returns - Group 1.
  •  Letter 039-01 (Reject Pre-Note / Direct Deposit) is sent to the Head of Household (HOH) or the Authorized Representative (AREP) payee as appropriate for the Assistance Unit (AU).
  • When the issuance method was Electronic Benefit Transfer (EBT) before the EFT pre-note, the issuance method remains EBT.
  • When the issuance method was Warrant (WAR) before the EFT pre-note, the issuance method remains WAR.

Returned live dollar transaction:

  • The user of record receives an alert when a live dollar transaction is returned. For more information, see Reason codes for returns - Group 1.
  • Letter 039-01 (Reject Pre-Note / Direct Deposit) is sent to the HOH or the payee as appropriate for the AU.
  • The original issuance is cancelled and benefit history is updated to reflect the cancellation.
  • Division of Child Support (DCS) is notified of the cancellation for Temporary Assistance for Needy Families (TANF) AUs.
  • Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.
  • When the issuance method was Electronic Benefit Transfer (EBT) before the change to EFT, the issuance method changes back to EBT.
  • When the issuance method was Warrant (WAR) before the change to EFT, the issuance method changes back to WAR.
  • The system generates an issuance request to replace the original issuance in the same amount, program and month(s) of service as the original issuance.
  • The most current payee (HOH or AREP) name and address are used.
  • If the issuance is made via EBT, a demographic record is triggered.

Reason codes for Group 1 returns:

  • Return Reason R02 - Account Closed:
    • Error occurs when the client or the financial institution has closed a previously active account.
  • Return Reason R03 - No Account / Unable to Locate Account:
    • Error occurs when an account number structure is valid and passes check digit validation but the account number does not correspond to the individual identified in the entry or the account number is not designated as an open account.
  • Return Reason R04 - Invalid Account Number:
    • Error occurs when an account number has an invalid structure, has failed check digit validation or may contain incorrect number of digits.
  • Return Reason R07 - Authorization Revoked by Customer:
    • Error occurs when the payee has revoked the authorization previously provided to the financial institution.
  • Return Reason R12 - Branch Sold to Another Department of Financial Institutions (DFI):
    • Error occurs when a financial institution or a branch of an institution has been sold to another financial institution. As the institution no longer maintains the account, the payment cannot be accepted. Most times, these are relayed via a Notice of Change.
  • Return Reason R16 - Account Frozen:
    • Error occurs when a financial institution refuses to accept additional deposit because the account has been frozen.
  • Return Reason R20 - Non-transaction Account:
    • Error occurs either because the account cannot accept EFT deposits or the financial institution cannot accept deposits.
  • Return Reason R23 - Credit Entry Refused by Receiver:
    • Error occurs when the dollar amount doesn't meet some threshold set by the bank or there is some other reason why the bank doesn't want to accept the transaction.

What are Group 2 return reason codes?

Group 2– User Action is Needed to Determine If Replacement is Appropriate and Initiate Request

Returned Electronic Fund Transfer (EFT) pre-note:

  • The user of record receives an alert when an Electronic Fund Transfer (EFT) pre-note is returned. For more information, see Reason codes for returns - Group 2.
  • The user needs to investigate the situation and determine if a replacement is appropriate and then initiate the request.
  • When the issuance method was Electronic Benefit Transfer (EBT) before the EFT pre-note, the issuance method remains EBT if the EFT pre-note was returned.
  • When the issuance method was Warrant (WAR) before the EFT pre-note, the issuance method remains WAR if the EFT pre-note is returned.
  • User needs to delete deceased Authorized Representative (AREP) or appoint a new AREP in order for issuance method to change.

Returned live dollar transaction:

  • The user of record receives an alert if a live dollar transaction is refused by a financial institution. For more information, see Reason codes for returns - Group 2.
  • No system letter is generated to the client.
  • The original issuance is cancelled and benefit history is updated to reflect the cancellation.
  • Division of Child Support (DCS) is notified of the cancellation for Temporary Assistance for Needy Families (TANF) Assistance Units (AUs).
  • Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.
  • When the issuance method was EBT before the change to EFT, the issuance method changes back to EBT.
  • When the issuance method was WAR before the change to EFT, the issuance method will change back to WAR.
  • The user must request replacement of the issuance on the HMEN screen.
  • The replacement is in the same amount, for the same program and month(s) of service as the original issuance.
  • The most current payee (Head of Household (HOH) or AREP) name and address will be used.
  • If the issuance is made via EBT, a demographic record is triggered as well.

Reason codes for Group 2 returns:

  • R14 - Representative Payee Deceased or Unable to Continue in that Capacity
    • Error occurs when a representative payee has been assigned to receive benefit payments on behalf of the entitled individual and the payee, not the client, has died. The client is still entitled to payment.
  • R15 - Beneficiary or Account Holder (Other than Representative Payee)
    • Deceased Error occurs when the bank records show the beneficiary is deceased.

What are Group 3 return reason codes?

Group 3– Miscellaneous Exception Conditions

Returned Electronic Fund Transfer (EFT) pre-note:

  • Generate an exception report for investigation by ACES staff. If correction can occur, the file is corrected and resubmitted in the next batch run.
  • The user is notified of the return via an alert. For more information, see Reason codes for returns – Group 3.  This notification is information only. The help desk may be in communication with the user if necessary to resolve the problem.
  • The issuance method for the Assistance Unit (AU) remains Electronic Benefit Transfer (EBT) if there is no Authorized Representative (AREP) or AREP code of:
    • Court-ordered Guardian (CG)
    • Cash/MA Payee Group Home (GC)
    • ADATSA Intensive protective payee (IP)
    • Other – all programs (NA)
    • Other – Letters, Warrants/Med Svc Cards (NW)
    • Protective Payee (PP)
    • Rep Payee for SSA/SSI (RP)
    • Cash Spouse Payee (SP), or
    •  Payee for TANF/GA teen parent (TN)
  • The issuance method for the AU remains Warrant (WAR) if there is an AREP code of:
    • Court-ordered Guardian (CG)
    • Cash/MA Payee Group Home (GC)
    • ADATSA Intensive protective payee (IP)
    • Other – all programs (NA)
    • Other – Letters
    • Warrants/Med Svc Cards (NW)
    • Protective Payee (PP)
    • Rep Payee for SSA/SSI (RP)
    • Cash Spouse Payee (SP), or
    • Payee for TANF/GA teen parent (TN)

Returned live dollar transaction:

  • Generate an exception report for investigation by ACES staff.
  • The original issuance is cancelled and benefit history is updated to reflect the cancellation.
  • Division of Child Support (DCS) is notified of the cancellation for Temporary Assistance for Needy Families (TANF) AUs.
  • Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.
  • No letter is generated by the system to the client so the user must create a letter and send to the Head of Household (HOH) or the AREP payee as appropriate.
  • In these situations, if a benefit were owed to the HOH or AREP payee, the replacement would likely occur via EBT or WAR as replacement via EFT would delay availability of the benefits by three working days.

Reason codes for Group 3 returns:

  • R01 - Insufficient funds:
    • Error occurs when a debit transaction is refused due to insufficient funds in the client's account. In rare situations, the only time debit transactions would be used is for reversals. This would happen only in rare situations.
      • The user must assess the case to determine if an overpayment has occurred or if some other kind of corrective action is needed.
      • No system letter is generated to the client so the user must create a letter to the HOH or the AREP payee as appropriate.
  • R06 - Returned per Originating Depository Financial Institution (ODFI) Request:
    • If a single entry is originated in error, the State may request this entry be returned. An entry in error is one sent in the wrong amount, a duplicate payment or a payment authorized in error. A bank does not have to honor this request, but if it does, this return code is used. The return reason doesn't occur with pre-note transactions. Returned Live Dollar Transaction
      • The original issuance is cancelled and benefit history is updated to reflect the cancellation.
      • The issuance method for the AU change to EBT if there is no AREP or no AREP of type Court-ordered Guardian (CG), Cash/MA Payee Group Home (GC), ADATSA Intensive protective payee (IP), Other – all programs (NA), Other – Letters, Warrants/Med Svc Cards (NW), Protective Payee (PP), Rep Payee for SSA/SSI (RP), Cash Spouse Payee (SP), or Payee for TANF/GA teen parent (TN).
      • The issuance method for the AU changes to WAR if there is an AREP of type Court-ordered Guardian (CG), Cash/MA Payee Group Home (GC), ADATSA Intensive protective payee (IP), Other – all programs (NA), Other – Letters, Warrants/Med Svc Cards (NW), Protective Payee (PP), Rep Payee for SSA/SSI (RP), Cash Spouse Payee (SP), or Payee for TANF/GA teen parent (TN).
      • Division of Child Support (DCS) is notified of the cancellation for TANF AUs.
      • Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.
      • The user evaluates case to determine whether an overpayment needs to be established or additional action required.
      • The user must send notification to the head of household or AREP payee as appropriate.
  • R17 - File Record Edit Criteria:
    • Error occurs when a receiving office edits fields and file can no longer be processed. The field causing the processing error is noted in the addenda record.
  • R24 - Duplicate Entry:
    • The bank is returning what it believes to be a duplicate (same trace # number, dollar, date, etc).
    • Returned Pre-note or Live Dollar Transaction: Generate an exception report for research by ACES staff.

Mainframe Processing

What are Group 1 return reason codes?

Group 1– System Will Complete Actions to Generate Replacement

Returned Electronic Fund Transfer (EFT) pre-note:

  • The user of record receives an alert when an Electronic Fund Transfer (EFT) pre-note is returned with a description of a return reason code.  For more information, see Reason codes for returns - Group 1.
  •  Letter 039-01 (Reject Pre-Note / Direct Deposit) is sent to the Head of Household (HOH) or the Authorized Representative (AREP) payee as appropriate for the Assistance Unit (AU).
  • When the issuance method was Electronic Benefit Transfer (EBT) before the EFT pre-note, the issuance method remains EBT.
  • When the issuance method was Warrant (WAR) before the EFT pre-note, the issuance method remains WAR.

Returned live dollar transaction:

  • The user of record receives an alert when a live dollar transaction is returned. For more information, see Reason codes for returns - Group 1.
  • Letter 039-01 (Reject Pre-Note / Direct Deposit) is sent to the HOH or the payee as appropriate for the AU.
  • The original issuance is cancelled and benefit history is updated to reflect the cancellation.
  • Division of Child Support (DCS) is notified of the cancellation for Temporary Assistance for Needy Families (TANF) AUs.
  • Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.
  • When the issuance method was Electronic Benefit Transfer (EBT) before the change to EFT, the issuance method changes back to EBT.
  • When the issuance method was Warrant (WAR) before the change to EFT, the issuance method changes back to WAR.
  • The system generates an issuance request to replace the original issuance in the same amount, program and month(s) of service as the original issuance.
  • The most current payee (HOH or AREP) name and address are used.
  • If the issuance is made via EBT, a demographic record is triggered.

Reason codes for Group 1 returns:

  • Return Reason R02 - Account Closed:
    • Error occurs when the client or the financial institution has closed a previously active account.
  • Return Reason R03 - No Account / Unable to Locate Account:
    • Error occurs when an account number structure is valid and passes check digit validation but the account number does not correspond to the individual identified in the entry or the account number is not designated as an open account.
  • Return Reason R04 - Invalid Account Number:
    • Error occurs when an account number has an invalid structure, has failed check digit validation or may contain incorrect number of digits.
  • Return Reason R07 - Authorization Revoked by Customer:
    • Error occurs when the payee has revoked the authorization previously provided to the financial institution.
  • Return Reason R12 - Branch Sold to Another Department of Financial Institutions (DFI):
    • Error occurs when a financial institution or a branch of an institution has been sold to another financial institution. As the institution no longer maintains the account, the payment cannot be accepted. Most times, these are relayed via a Notice of Change.
  • Return Reason R16 - Account Frozen:
    • Error occurs when a financial institution refuses to accept additional deposit because the account has been frozen.
  • Return Reason R20 - Non-transaction Account:
    • Error occurs either because the account cannot accept EFT deposits or the financial institution cannot accept deposits.
  • Return Reason R23 - Credit Entry Refused by Receiver:
    • Error occurs when the dollar amount doesn't meet some threshold set by the bank or there is some other reason why the bank doesn't want to accept the transaction.

What are Group 2 return reason codes?

Group 2– User Action is Needed to Determine If Replacement is Appropriate and Initiate Request

Returned Electronic Fund Transfer (EFT) pre-note:

  • The user of record receives an alert when an Electronic Fund Transfer (EFT) pre-note is returned. For more information, see Reason codes for returns - Group 2.
  • The user needs to investigate the situation and determine if a replacement is appropriate and then initiate the request.
  • When the issuance method was Electronic Benefit Transfer (EBT) before the EFT pre-note, the issuance method remains EBT if the EFT pre-note was returned.
  • When the issuance method was Warrant (WAR) before the EFT pre-note, the issuance method remains WAR if the EFT pre-note is returned.
  • User needs to delete deceased Authorized Representative (AREP) or appoint a new AREP in order for issuance method to change.

Returned live dollar transaction:

  • The user of record receives an alert if a live dollar transaction is refused by a financial institution. For more information, see Reason codes for returns - Group 2.
  • No system letter is generated to the client.
  • The original issuance is cancelled and benefit history is updated to reflect the cancellation.
  • Division of Child Support (DCS) is notified of the cancellation for Temporary Assistance for Needy Families (TANF) Assistance Units (AUs).
  • Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.
  • When the issuance method was EBT before the change to EFT, the issuance method changes back to EBT.
  • When the issuance method was WAR before the change to EFT, the issuance method changes back to WAR.
  • The user must request replacement of the issuance on the HMEN screen.
  • The replacement is in the same amount, for the same program and month(s) of service as the original issuance.
  • The most current payee (Head of Household (HOH) or AREP) name and address is used.
  • If the issuance is made via EBT, a demographic record is triggered as well.

Reason codes for Group 2 returns:

  • R14 - Representative Payee Deceased or Unable to Continue in that Capacity
    • Error occurs when a representative payee has been assigned to receive benefit payments on behalf of the entitled individual and the payee, not the client, has died. The client is still entitled to payment.
  • R15 - Beneficiary or Account Holder (Other than Representative Payee)
    • Deceased Error occurs when the bank records show the beneficiary is deceased.

What are Group 3 return reason codes?

Group 3– Miscellaneous Exception Conditions

Returned Electronic Fund Transfer (EFT) pre-note:

  • Generate an exception report for investigation by ACES staff. If correction can occur, the file is corrected and resubmitted in the next batch run.
  • The user is notified of the return via an alert. For more information, see Reason codes for returns – Group 3.  This notification is information only. The help desk may be in communication with the user if necessary to resolve the problem.
  • The issuance method for the AU remains Electronic Benefit Transfer (EBT) if there is no Authorized Representative (AREP) or AREP code of CG, GC, IP, NA, NW, PP, RP, SP, or TN.
  • The issuance method for the AU remains Warrant (WAR) if there is an AREP code of CG, GC, IP, NA, NW, PP, RP, SP, or TN.

Returned live dollar transaction:

  • Generate an exception report for investigation by ACES staff.
  • The original issuance is cancelled and benefit history is updated to reflect the cancellation.
  • Division of Child Support (DCS) is notified of the cancellation for Temporary Assistance for Needy Families (TANF) AUs.
  • Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.
  • No letter is generated by the system to the client so the user must create a letter and send to the Head of Household (HOH) or the AREP payee as appropriate.
  • In these situations, if a benefit were owed to the HOH or AREP payee, the replacement would likely occur via EBT or WAR as replacement via EFT would delay availability of the benefits by three working days.

Reason codes for Group 3 returns:

  • R01 - Insufficient funds:
    • Error occurs when a debit transaction is refused due to insufficient funds in the client's account. In rare situations, the only time debit transactions would be used is for reversals. This would happen only in rare situations.
      • The user must assess the case to determine if an overpayment has occurred or if some other kind of corrective action is needed.
      • No system letter is generated to the client so the user must create a letter to the HOH or the AREP payee as appropriate.
  • R06 - Returned per Originating Depository Financial Institution (ODFI) Request:
    • If a single entry is originated in error, the State may request this entry be returned. An entry in error is one sent in the wrong amount, a duplicate payment or a payment authorized in error. A bank does not have to honor this request, but if it does, this return code is used. The return reason doesn't occur with pre-note transactions. Returned Live Dollar Transaction
      • The original issuance is cancelled and benefit history is updated to reflect the cancellation.
      • The issuance method for the AU change to EBT if there is no AREP or no AREP of type CG, GC, IP, NA, NW, PP, RP, SP, or TN.
      • The issuance method for the AU changes to WAR if there is an AREP of type CG, GC, IP, NA, NW, PP, RP, SP, or TN.
      • Office of Financial Recovery (OFR) is notified of the cancellation if the issuance contained a recoupment.
      • The user evaluates case to determine whether an overpayment needs to be established or additional action required.
      • The user must send notification to the head of household or AREP payee as appropriate.
  • R17 - File Record Edit Criteria:
    • Error occurs when a receiving office edits fields and file can no longer be processed. The field causing the processing error is noted in the addenda record.
  • R24 - Duplicate Entry:
    • The bank is returning what it believes to be a duplicate (same trace # number, dollar, date, etc).
    • Returned Pre-note or Live Dollar Transaction: Generate an exception report for research by ACES staff.