Two different fees, often confused
When an ACH payment is returned, a fee can come from either side.
| Fee from your bank | Fee from the company | |
|---|---|---|
| Common names | Returned item fee, NSF fee | Returned payment fee, ACH return charge |
| Who charges it | The bank that holds your account | The business or lender you were paying |
| Why | Your bank sent the payment back unpaid | The payment the business tried to collect failed |
| What limits it | The bank’s own fee schedule | The notice you were given, and state law |
Look at who the line on your statement is from. That tells you whom to call.
Why a payment is returned
A returned payment carries a return code that says why it came back. These are four of them.
| Code | Reason |
|---|---|
| R01 | Insufficient funds |
| R09 | Uncollected funds: money is in the account but not yet available |
| R02 | Account closed |
| R08 | Payment stopped by the account holder |
A business that collects its fee by ACH uses a Return Fee Entry. Bank guides for businesses say that entry is only for a payment returned for insufficient or uncollected funds, R01 or R09.
Fees from your bank
Returned item fees on personal accounts have been disappearing at large banks.
| Bank | What it says |
|---|---|
| Wells Fargo | No fees for declined or returned transactions |
| Chase | No fee if it does not pay a check or electronic payment because the account is short. It may charge an overdraft fee if a returned payment is presented again and paid |
| Citi | Announced in 2022 that it would end returned item fees |
| Bank of America | Announced in 2022 that it would end non-sufficient funds fees |
Other banks and credit unions may still charge. Business accounts are a separate matter. One published business fee schedule lists $2.50 to $3 for each returned ACH item. We checked that fee schedule on October 2, 2026.
There is no federal ban on returned item fees. The Consumer Financial Protection Bureau proposed a narrow rule on instantly declined transactions in 2024 and withdrew it on January 10, 2025.
Fees from the company
A business loses money when a payment bounces. Its processor charges it for the return, and it has to chase the payment. Many businesses pass this on as a returned payment fee.
For a personal account, federal Regulation E sets a condition. A business that collects a returned payment fee electronically needs your authorization for it. It can get that by notice, if the notice:
- says the fee will be collected by electronic transfer from your account if the payment is returned unpaid, and
- states the dollar amount of the fee, or explains how it is worked out if the amount varies.
Look for the notice in the authorization form you signed. If it was not there, ask the company where it told you about the fee.
State law can also cap what a business may charge for a returned payment. California, for example, caps the charge for a bounced check at $25 for the first and $35 for each one after. Whether a state’s cap also covers ACH payments depends on that state’s law.
Retried payments
After a return for insufficient or uncollected funds, the business may send the payment again.
- At most two more times.
- Within 180 days of the original payment.
- For exactly the same amount. Adding the fee to the retried payment is not allowed.
A fee collected by ACH must be a separate payment, and Nacha has a special entry type for it, the Return Fee Entry.
For businesses: charging a returned payment fee
- Check your state’s law on returned payment fees, and ask your bank or processor how it handles Return Fee Entries.
- Put the fee in your authorization. State the dollar amount and that it may be collected electronically. In the ACH authorization form builder, turn on “Returned payment fee line”.
- Charge it once per returned payment, as a separate entry, never added to a retry. Bank guides for businesses allow one Return Fee Entry for each returned payment, however many times that payment comes back. Ask your bank how it applies this.
- Collect it by ACH only after an R01 or R09 return. Bank guides for businesses limit Return Fee Entries to payments returned for insufficient or uncollected funds.
How to avoid ACH return charges
- Know your payment dates. List each automatic payment and the day it leaves.
- Set a low-balance alert in your bank’s app.
- Ask to move the date before the payment is due, not after.
- Keep your details current. A closed or changed account causes returns too.
- Ask for the fee to be waived if it is your first return. Some banks and companies will agree.