R23 ACH Return Code: Credit Entry Refused by Receiver

What Causes ACH Return Code R23?

The R23 ACH return code means "Credit Entry Refused by Receiver" and indicates that the account holder or their bank has actively declined to accept a credit transaction you attempted to send. This is fundamentally different from technical errors or insufficient funds—it represents a deliberate business decision by the receiver to reject the incoming payment.

This return code serves as a communication mechanism between the receiver and the sender when credit entries don't meet specific requirements or expectations. The receiver may refuse credits to avoid overpayments, reject unauthorized transactions, or decline amounts that don't match their records. Understanding why a credit was refused helps maintain proper business relationships and resolve payment disputes.

Can You Retry R23 Payments?

You can potentially retry R23 payments after contacting the receiver to understand why they refused the credit and addressing their specific concerns. However, you should not automatically resubmit without resolving the underlying issue that caused the initial refusal.

How to respond

An R23 return requires direct communication with the receiver to understand their specific reason for refusing the credit and resolve any underlying issues.

When receiving payments

Contact the Receiver Immediately
Reach out to understand exactly why they refused the credit entry and what their expectations are.
Verify Transaction Details
Confirm the correct amount, purpose, and authorization requirements with the receiver.
Address Specific Concerns
Resolve any issues related to amount discrepancies, authorization, or business requirements.
Obtain Proper Authorization
Ensure you have explicit permission and correct details before resubmitting any credit.

When sending payments

An R23 return on vendor payments means the vendor has refused your credit payment. This requires immediate communication to understand their requirements and resolve the issue.

Contact the vendor immediately to understand why they refused the credit
Verify the correct payment amount and any specific business requirements
Confirm proper authorization and account details for future payments
Address any underlying business issues before attempting to resend the credit

Email template

From: [Your Company Name] <[your-email]>
To: [Customer Name] <[customer-email]>
Subject: Credit Payment Refused - Clarification Needed

Hi [Receiver Name],

We attempted to send you a credit payment that was refused by your bank. To ensure we process your payment correctly, we need to understand the specific reason for the refusal.

Could you please verify:

The correct amount you're expecting
Any specific authorization requirements
Whether there are restrictions on your account

We want to resolve this quickly and ensure you receive the payment you're entitled to. Please let us know how we can correct this situation.

Thanks,

[Your Company Name]