Understanding Payment Returns & Refunds

Modified on Mon, Dec 15 at 5:09 PM

We strive to ensure every payment reaches your vendors on time. However, occasionally a payment may be returned or refunded due to banking protocols or specific vendor constraints.

This guide outlines the most common reasons for ACH failures and vCard refunds to help you troubleshoot quickly.

1. ACH Payment Failures

When an ACH (Direct Deposit) payment fails, the banking network provides a specific "Return Code" explaining why the transaction could not be completed.

Code	Reason	What it means
R01	Insufficient Funds	The Funding Source lacks funds. The bank account connected to your payment platform did not have enough available funds at the time the debit was attempted.
R02	Account Closed	The Vendor’s account is closed. The bank account currently on file for this vendor is no longer active. The vendor needs to provide updated banking instructions.
R03	Unable to Locate	Incorrect Account Number. The bank account number entered for this vendor does not exist or cannot be located by the receiving bank. This is usually due to a typo in the account number during setup.
R29	Not Authorized	The Debit was blocked. Your bank rejected the withdrawal because our Originator ID is not allowlisted. You must contact your bank to authorize us to debit your account.

2. vCard Refunds

Virtual Cards (vCards) are designed to be secure and efficient. However, if a vendor cannot or will not process the card, the funds are automatically refunded to your account.

Here are the standard reasons a vCard payment may be canceled:

Vendor Unreachable: Our payment operations team attempts to contact vendors to facilitate payment. If we are unable to reach the vendor after 10 business days, the card is canceled and the funds are returned to you.
Card Not Accepted / Fees Required: If a vendor confirms they no longer accept virtual credit cards, or if they require a processing fee to run the card, we will cancel the payment and refund you so you can pay via a different method (Check or ACH).
Invoice Already Paid: Great news—no action is needed. The vendor confirmed that the specific invoice has already been paid or closed in their system. We cancel the vCard to prevent a duplicate payment.
Unable to Locate Account: The vendor was unable to find your customer account in their system using the invoice information provided on the payment remittance. We cancel these payments to avoid applying funds to the wrong account.

What happens next?

When a payment fails or is refunded:

The funds are returned to your account balance.
The invoice is moved back to the “Unpaid Invoice” or "Pending Approval" tab for rescheduling
You can update the vendor's information (such as a new address or send a new ACH invite) and reissue the payment.