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When the Transaction Identifier Doesn’t Line Up
ACH payments are designed to move money efficiently and securely, but that process depends heavily on proper formatting—including unique identifiers that track each transaction. One of those identifiers is the trace number, and when something goes wrong with it, your payment may bounce back with ACH Return Code R27.
This isn’t a customer-side issue—it’s about how your transaction was built and submitted. Let’s look at what R27 – Trace Number Error means, what typically causes it, and how you can correct it to keep your ACH entries moving smoothly.
What Does ACH Return Code R27 Mean?
ACH Return Code R27 stands for:
“Trace Number Error.”
According to NACHA’s official definition:
R27 – Trace Number Error: The trace number is either missing, incorrectly formatted, or not unique. It doesn’t conform to the standards required for ACH transaction tracking.
In plain terms: the ACH system couldn’t process your transaction because the trace number—a required unique identifier for each ACH entry—was invalid.
What Is a Trace Number?
A trace number is a 15-digit code used to uniquely identify each ACH transaction. It’s made up of:
The first 8 digits: your bank or ODFI’s routing number
The last 7 digits: a sequence number assigned to that specific transaction
This number is critical. It allows the ACH network, financial institutions, and businesses to track, reference, and reconcile transactions in case of errors, returns, or audits.
What Causes an R27 Return?
An R27 return is typically the result of an issue during ACH file creation. Common causes include:
Missing trace number in a transaction record
Improper formatting, such as a trace number that’s too short, too long, or includes invalid characters
Duplicate trace numbers within the same batch or across multiple transactions
A manually altered ACH file that breaks the numbering sequence
Software bugs or outdated systems that generate non-compliant trace numbers
This is a structural problem with the file—not a problem with the receiving account.
How to Fix ACH Return Code R27
Fixing an R27 error means revisiting how your payment file was generated. Here’s how to get things sorted:
1. Locate the Problem Transaction
Find the payment that triggered the return. Look for its trace number field and verify whether it’s present, properly formatted, and unique.
2. Check Trace Number Format
Confirm that the trace number:
Is exactly 15 digits long
Begins with your ODFI’s 8-digit routing number
Ends with a unique 7-digit sequence number
If any of this is incorrect or missing, the entry will be rejected.
3. Correct and Regenerate the File
If your ACH software allows it, regenerate the transaction batch with corrected trace numbers. Avoid reusing trace numbers from other entries.
4. Contact Your Payment Provider if Necessary
If your system auto-generates trace numbers, and this isn’t the first R27 you’ve received, your payment processor or ACH provider may need to review your setup to prevent recurring errors.
5. Resubmit the Corrected Payment
Once your file is corrected and validated, you can resubmit the transaction with a valid trace number.
How to Avoid R27 Returns in the Future
Here are some helpful steps to avoid trace number errors:
Use ACH-compliant software that automatically generates valid, unique trace numbers
Avoid manually editing trace numbers in ACH files
Keep a record of recent batch numbers to ensure no duplicates are used
Confirm your routing number is correctly embedded in every trace number
Run file validation checks before submission to catch formatting problems early
Consistency is key—trace numbers must be unique, predictable, and formatted to spec.
Get ACH Processing With Durango
ACH Return Code R27—“Trace Number Error”—means your transaction couldn’t be processed because its identifying number was missing, invalid, or improperly formatted. While it’s a technical issue, it can bring your payments to a halt if not corrected.
At Durango Merchant Services, we help businesses avoid return codes like R27 by offering systems that validate ACH file structure, enforce trace number standards, and reduce manual error—especially in high-risk and high-volume industries.
