R02 return code: account closed

What does R02 mean?

R02 is "Account Closed." Nacha describes it as a previously active account that has been closed by action of the customer or the RDFI, the customer's bank. The account existed and was open at some point. It isn't open now.

That makes R02 different from R03 and R04, where the account details never matched a usable account in the first place.

Who sends an R02, and how fast?

The customer's bank. Nacha gives it two banking days. The return must reach the business's bank no later than the opening of business on the second banking day after the debit's settlement date. Nacha has also pointed out that banks can use same-day processing windows to send administrative returns like R02 sooner.

Does R02 count against my return rates?

Yes, in two of Nacha's three rates. R02, R03 and R04 make up the administrative group:

• Administrative return rate: a level of 3.0% of debits, measured over the preceding 60 days or two calendar months. It applies to debits only, not returned credits.
• Overall return rate: a level of 15.0% for all debit returns, for any reason.

Nacha set the 3.0% level as a point where it may look more closely at whether poor origination practices are causing the returns. Old or mistyped account details are a common cause.

Can I send the debit again?

Not to the closed account. It will come back again. Stripe blocks a bank account after a closed-account return. It says this is because Nacha requires originators to review and confirm the account, or take other action, before reinitiating a debit after a return for any reason other than insufficient funds. Stripe reports R02 as bank_account_closed.

To clear a Stripe block, contact the customer first. If the account is no longer active, ask for new payment details. If you think the block is a mistake, Stripe asks for a screenshot from the online bank portal, or a bank letter, showing the full routing number, account number and account holder's name.

What should I do when a plan payment comes back R02?

1. Stop debiting that account. Every remaining installment would fail the same way and add to your administrative rate.
2. Contact the customer. People often close an account when they change banks. Ask for the new account.
3. Collect a fresh authorization with the new details. Use it for the missed payment and the rest of the plan.
4. Update the schedule if dates move. Agree any new date for the missed installment in writing.

Example: a customer on a 12-payment plan switches banks after payment four. Payment five, $1,108.33, returns R02. Payments six to twelve would all fail the same way, so you collect new account details before payment six is due.

For the other administrative codes, see R03 and R04. For the full list, see ACH return codes.