Unauthorized returns are similar to chargebacks with credit cards. They are customer disputed returns where the customer states they never purchased the goods or services from the merchant. Merchants can monitor the unauthorized returns in two ways; via Vantiv iQ for eCommerce, or through our Chargeback Scheduled Secure Report (SSR).
The unauthorized returns come back with the return codes R05, R07, R10, R29 and R51. The unauthorized return rate is computed by dividing the number of debit entries returned as unauthorized for the preceding 60 days or 2 calendar months by the total number of debit entries originated for the preceding 60 days or 2 calendar months, respectively.
Merchants who are using Vantiv eCheck/ACH for direct debit method of payment are required to keep their rate of unauthorized returns below 0.5 percent. National Automated Clearing House Association (NACHA), the governing body for ACH payments, updated its guidelines on September 2015 and has stated, If the merchant fails to keep unauthorized returns below this threshold, NACHA may impose non-compliance fees. Vantiv can also prevent the merchant from processing eCheck payments if the unauthorized returns remain over the 0.5 percent threshold.