Returns and Chargebacks

Resource for ACH returns and chargebacks

Returns and Chargebacks can occur after an ACH transaction has settled.


An ACH return is a notification generated by the user’s bank to inform us that the transaction could not be processed.

Timeline: 2-3 business days post-settlement

Common reasons for return codes include:

  • Insufficient Funds
  • Account Closed
  • Invalid Account Number

Relevant Transaction Codes: View our full list of ACH Return Codes


Chargebacks are unauthorized or improperly executed transactions. For an ACH chargeback to occur, the customer must notify their bank to dispute the transaction.

Timeline: 60 calendar days post-settlement

Valid ACH Chargeback Reasons:

  • Transaction was never authorized (or authorization was revoked)
  • Incorrect Amount was debited
  • Funds were debited before the agreed upon date

Other reasons you may see chargebacks:

  • Customer Confusion: The name that appears on bank statements should match your company name.
  • Customer Disputes: Make it easy for customers to dispute transactions directly from your UI.
  • Inability to Pay: Allow customers to snooze payments if possible.
  • Cancelling Subscriptions: Make it easy to cancel subscriptions from your UI.
  • Fraudulent Activity: Start off with conservative limits and strong KYC until you know your transactional risk well. When possible, encourage incoming ACH credits, rather than debiting the account yourself.

Relevant Transaction Codes:

  • R10 - Customer Advises Not Authorized. This means the sender has claimed that the transaction was unauthorized or improperly executed.
  • R07-Authorization revoked by Customer. This means that the recipient has revoked the authorization.
  • View the full list of Transaction Codes.

How do we notify you of returns/chargebacks?

To help you manage return/chargeback notifications, please setup webhooks. Webhooks will update you on the status of a transaction, including whether there was a return.

Who is responsible for covering a return/chargeback?

If funds are debited into a Synapse account (ex: DEPOSIT-US), the funds will be returned from that account. If there are not enough funds in the account, the account balance will go negative. We reconcile negative balances from your reserve at the end of each month, so please keep your reserve funded.

Disputing a Chargeback

ACH Chargebacks are difficult to dispute. When possible, we will dispute chargebacks, but we recommend focusing your efforts on preventing them in the first place.

Here is more context on that process:

  • If a chargeback occurs within the allotted time frame of the Reg E guidelines, we are usually unable to dispute the chargeback.
  • If the chargeback occurs after the allotted time frame, we will submit documents to dishonor the return directly with the customer's bank. These include screenshots of ACH authorization & disclosures, as well as evidence demonstrating the transaction was made with the user's credentials.
  • In limited cases, we are able to help you obtain the Written Statement of Unauthorized Debit (WSUD) for your records.

High Volume of Returns/Chargebacks

We understand one-off returns and chargebacks occur. However, high rates of returns/chargebacks can indicate systemic issues. Should we notice an increase in returns/chargebacks, you may be asked to take steps to reduce these rates. Our team can also provide tips to further reduce these numbers.

We also reserve the right to increase your reserve to cover increased return risk and charge a $15 fee for ACH returns/chargebacks.

Note that NACHA enforces return rate thresholds across all platforms. These rates are measured on a rolling 60 day basis. Should you go above these rates, you may be subject to the removal of ACH capabilities by NACHA.

  • Unauthorized Return Rate Threshold: 0.5%
  • Administrative Return Rate Threshold: 3.0%
  • Overall Return Rate Threshold: 15.0%

Returns and Chargebacks

Resource for ACH returns and chargebacks

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