ACH Return Code R38

ACH Return Code R38 indicates that a stop payment has been placed on the original source document used to initiate the ACH entry. This typically applies to entries converted from checks, where the account holder has instructed their bank to prevent payment from being processed. 

Understanding this code helps in resolving disputes and ensuring proper handling of payment exceptions.

What Is an ACH Return Code

In ACH payments, an ACH return code is a three-character identifier used by financial institutions to explain why an ACH (Automated Clearing House) payment could not be processed.

These codes facilitate clear communication between the Originating Depository Financial Institution (ODFI) and the Receiving Depository Financial Institution (RDFI) during electronic transactions. Each return code begins with an "R" followed by a two-digit number, representing a specific reason for the return. The system of return codes is governed by NACHA, the organization responsible for overseeing the ACH network.

What Is ACH Return Code R38

ACH Return Code R38 refers to a “Stop Payment on Source Document.” This code is used when a consumer has requested a stop payment on the original paper check or source document that was converted into an ACH entry. 

It typically applies to ARC (Accounts Receivable Entry), BOC (Back Office Conversion), or POP (Point-of-Purchase) transactions. When this return code is issued, it means the account holder contacted their bank to stop payment on the check before or after it was converted into an electronic transaction.

How to Fix ACH Return Code R38

To fix ACH Return Code R38, the originator should first confirm with the customer why a stop payment was placed on the source document. In many cases, the customer may have had concerns about the payment or simply changed their mind. 

Once the reason is understood, the originator can work with the customer to resolve the issue—this may involve reissuing the payment, using a different payment method, or obtaining written authorization for a new ACH transaction. Also, verify that all transaction details were accurate and that proper authorization was obtained before attempting to resubmit.