This article provides a detailed guide to the Dutchie's Pay by Bank (PBB) ACH return and retries process. Although dispensaries do not directly encounter ACH returns when offering PBB, your customers may reach out with questions or concerns about the process.
ACH Returns
What is an ACH return?
An ACH return is equivalent to a bounced check. An ACH return occurs when a PBB consumer (your dispensary customer) provides bank information to make a payment; however, the payment is returned by the bank for one of many reasons, the most common of which for PBB transactions is insufficient funds (R01 return code).
Within Dutchie’s funds flow, an ACH return could occur when a consumer’s bank (RDFI) returns a previously originated consumer payment. This means the consumer payment initially appeared successful; however, the consumer’s bank has determined it cannot be paid and is therefore returning the payment (essentially “canceling out” the original transaction).
How does an ACH return happen with Dutchie's Pay by Bank transactions?
The most important factor to note about any ACH processing is that funds do not withdraw from the customer's bank account instantaneously as they would with other payment processing. Dutchie also does not place an authorization hold on funds. However, a customer's bank may have an internal protocol for holds on ACH withdrawals. If a customer reaches out about a hold on their bank account after a PBB transaction at your store, please encourage them to reach out to their bank directly.
With PBB, a balance check is completed at various stages of the ordering process. However, when the batch was submitted for payment to the customers bank (the next business day), the attempt was unsuccessful and results in the ACH returned. This is the point when the account is validated and therefore could result in a return for reasons such as account closed or insufficient funds.
If an ACH return occurs, is my dispensary still paid for that transaction?
At this time, the short answer is yes. Any transactions your team can see reported on the back office report for PBB transactions, called the Dutchie Pay Settlement Report, will be included in your PBB settlement and deposited to your account.
In further detail, this is not necessarily how returns will be handled long-term for PBB transactions. But as a limited trial period, for which the length of time is exclusively determined by Dutchie, Dutchie will take on responsibility for losses that result from returns, cancellations, unauthorized entries, or other transmittals that cannot be processed so long as the Merchant (i.e. the dispensary) did not cause the error.
ACH Retry
What is a retry?
A retry is an attempt to collect funds on a payment for transactions most commonly unsuccessful due to insufficient funds or uncollected funds at the time of batching for Pay by Bank.
Are customers aware that they have a returned transaction?
PBB customers have their accounts temporarily blocked until Dutchie can successfully retry and collect funds for the returned transaction. If they attempt to use their PBB account while blocked the following error messages will be visible to the customer: You have an outstanding balance of [$x] from a previous transaction at [dispensary name] placed on [MM/DD/YY]. You can learn more here. F103.
What does the retry process look like?
Transactions returned for Insufficient or Uncollected Funds will attempt to retry up to two times over the course of 180 days in an automatic process. If your customers would like to learn more about temporary blocks and retries, you can share this article with them from our Consumer Help Center.
- The budtender finalizes the customer's order in the POS by tapping the "Complete" button on the POS checkout panel for that order. Remember, an order is only finalized, and your dispensary will only receive payment when the "Complete" button is pressed.
- The transaction will then batch the next business day and funds will attempt to withdraw from the customer's bank account at that time.
- If the customer's account is not debited, an ACH return is created and Dutchie is notified of the return. A temporary block will be placed on your customer's PBB account until funds can be successfully collected.
- Then, on the next business day, after the return of the transaction is received, it will enter Dutchie's transaction retry queue. Please note: Only transactions that are returned for Insufficient Funds or Uncollected Funds are entered into this process.
- The retry queue is run every day Monday through Thursday after a balance check is completed to ensure funds are available, eligible transactions are batched and sent for payment. If the customer does not have sufficient funds in the balance check, the transaction will remain in the retry queue until the balance check is successful, then the transaction will be batched and sent for payment.
- Pay by Bank customers with a temporary block due will be unblocked 3 business days after payment is successfully collected in the retry process. If Dutchie is not successful in collecting the funds owed, the customer's account will remain blocked and their outstanding transaction will re-enter the queue the next business day for the final collection attempt.
Note: If both retry attempts fail, the customer's account will be blocked from using PBB indefinitely. Dutchie does not currently have a process for PBB users to proactively pay a balance owed due to ACH returns.
Can a customer tell if a debit on their account is a retry?
Yes, a retried transaction should show a variation of "Retry PYMT" on the customer's bank statement.
Keywords that indicate a Pay by Bank retry transaction
In the age of digital banking, customers are less likely to have a close watch on their bank account balance to confirm payments processed. With this in mind, your teams must understand the ACH process and how to recognize (based on the examples below) when a customer's concern about a Pay by Bank transaction is likely a retried transaction due to an ACH return.
Examples of customer concerns, questions, or complaints that most often indicate a retried transaction:
- Maria calls the dispensary reporting "I was double charged for my Pay by Bank transaction!"
- John emails the dispensary to say "I'm worried about a fraudulent/unauthorized charge from Pay by Bank that just hit my account on [MM/DD/YY] for [$x] - I wasn't even in the store that day!"
- Lucy attempts to make an in-store purchase with Pay by Bank and sees a decline message stating "You have an outstanding balance of [$x] from a previous transaction at [dispensary name] placed on [MM/DD/YY]. You can learn more here. F103." to which she asks the budtender, "But I have the receipt, I know I paid for it - how could it be outstanding?"