Return of Improper Credit Entry
This transaction type doesn't allow credit entries.
What Causes ACH Return Code R36?
The R36 ACH return code means "Return of Improper Credit Entry" and indicates that a credit transaction was attempted using a Standard Entry Class (SEC) code that doesn't support credit entries. Specific SEC codes like ARC (Accounts Receivable Conversion), BOC (Back Office Conversion), POP (Point of Purchase), RCK (Re-presented Check), TEL (Telephone), and XCK (Destroyed Check) are designed exclusively for debit transactions.
R36 returns occur when there's a mismatch between the transaction direction (credit vs. debit) and the SEC code's capabilities. These specialized transaction types were created for specific scenarios like check conversions or telephone authorizations where only debit transactions make sense, and attempting to send credits using these codes violates NACHA regulations.
Can You Retry R36 Payments?
You can retry R36 payments after correcting the transaction format. You must either change to an appropriate SEC code that supports credit entries (such as CCD, PPD, or CTX) or switch the transaction to a debit entry if that matches your intended payment direction and authorization.
How to respond
An R36 return indicates a formatting violation where the SEC code doesn't support credit entries, requiring correction of either the transaction type or direction before reprocessing.
When receiving payments
- Review Transaction Format Details
Examine the SEC code used and confirm whether a credit entry is appropriate for your intended transaction type. - Contact Your Payment Processor
Work with your ACH provider to understand which SEC codes support credit entries and determine the correct format for your transaction. - Verify Transaction Direction
Confirm whether you intended to send a credit (payment to them) or should be processing a debit (collection from them) instead. - Reprocess with Correct Format
Once you've identified the appropriate SEC code or transaction direction, resubmit the payment using the correct format.
When sending payments
An R36 return on vendor payments means you used a transaction format that doesn't support credit entries. This requires adjusting either the SEC code or transaction direction to match your intended payment method.
- Contact your payment processor to identify why a credit entry was attempted with a debit-only SEC code
- Determine the correct SEC code for your vendor payment type (CCD, PPD, or CTX for credits)
- Verify whether you intended to send a credit payment or collect a debit from the vendor
- Reprocess the payment using the appropriate transaction format and SEC code combination
Email template
- From
- [Your Company Name] <[your-email]>
- To
- [Customer Name] <[customer-email]>
- Subject
- Payment Processing Issue - New Payment Method Needed
Hi [Customer Name],
We encountered a technical formatting issue when processing your recent payment. The transaction was returned due to a mismatch between the payment format and transaction type - this is a technical compliance issue, not a problem with your account.
Our payment processing team is correcting the format and will reprocess your payment using the appropriate transaction structure. This typically resolves quickly once the correct formatting is applied.
Your payment should be processed successfully within the next 1-2 business days. We apologize for any inconvenience this technical issue may have caused.
[Your Company Name]