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When a Customer Puts the Brakes on a Check-Based Payment
Most ACH payments move through the system without issues. But when a payment originates from a check conversion—like a check you scan and submit electronically—the customer might still have the ability to place a stop payment on the original check.
If they do, you’ll likely get hit with ACH Return Code R38.
Let’s break down what R38 – Stop Payment on Source Document means, why it happens, and what your next steps should be if it shows up.
What Exactly Does R38 Mean?
ACH Return Code R38 stands for:
“Stop Payment on Source Document.”
Here’s NACHA’s official definition:
R38 – Stop Payment on Source Document: The payment is being returned because the originator converted a check into an ACH entry, but the customer placed a stop payment order on the original paper check.
In plain terms:
The customer stopped payment on the original check—even though you tried to collect it electronically.
Why Would an R38 ACH Return Happen?
There are a few common reasons behind an R38:
The customer changed their mind about the purchase or service.
The customer didn’t recognize the payment and stopped it for safety.
There was a dispute over goods or services before the payment cleared.
The check was lost, stolen, or duplicated, leading the customer to block it.
The customer was advised by their bank to place a stop payment after spotting suspicious activity.
Once a stop payment is issued on the source check, the ACH network must honor it—even if you submitted the payment electronically through check conversion.
What You Should Do When You Get an R38 Return
Step 1: Review the Transaction Details
Make sure the source document (the original check) matches the ACH entry you submitted.
Step 2: Contact the Customer
Reach out to the customer to understand why they placed a stop payment. This can clear up misunderstandings and give you a chance to collect payment another way.
Step 3: Offer Alternative Payment Options
If the stop payment was accidental or the issue is resolved, you may be able to collect payment via a different method—like credit card, ACH debit, or a new check.
Step 4: Update Your Records
Document the R38 return, your communication with the customer, and any resolution for your accounting and reporting needs.
How to Minimize R38 Returns in the Future
While you can’t control every customer’s actions, you can reduce the chance of R38 returns by:
Clearly communicating with customers before converting checks into electronic payments
Getting signed or verbal authorization when processing check conversions
Providing visible disclosures that let customers know their check will be electronically processed
Following up quickly if a customer’s check is returned unpaid
Using ACH processing solutions that flag potentially risky transactions for manual review
The more transparent you are, the fewer surprises—and returns—you’ll face.
R38 Is About Customer Control Over Their Original Payment
ACH Return Code R38—“Stop Payment on Source Document”—reminds us that even with electronic check conversion, customers still have the power to halt payments at the source. Handling it professionally and quickly can often turn a stopped payment into a recovered sale.
At Durango Merchant Services, we help businesses manage the full ACH lifecycle—whether you’re processing standard debits, check conversions, or navigating returns like R38. From smart onboarding practices to faster error resolution, we’re here to support your success.
