Returns & Recalls

When dealing with payouts, there are two types of reimbursement scenarios you may encounter: Returns and Recalls. Understanding the difference between these processes is crucial for managing your payout operations effectively.

Overview

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Returns

A Return occurs when a payout has been completed successfully, but the beneficiary's bank later rejects the payment due to the asynchronous nature of the ACH domestic network. This rejection can happen several days after the initial payout completion.

When Returns Happen

Returns typically occur due to:

• Invalid account information discovered post-transaction.
• Account closure after payout processing.
• Beneficiary bank internal errors or policy violations.
• Insufficient account privileges to receive funds.

Return Process Flow

1. Payout Creation: Client initiates a new payout.
2. Fund Transfer: LocalPayment successfully transfers funds to the beneficiary's account.
3. Status Update: Payout status changes to Completed.
4. Bank Rejection: The beneficiary's financial institution requests fund return due to internal errors or policy violations.
5. Return Processing: LocalPayment returns the funds to the client's account.
6. .Status & Notification: Payout status changes to Returned and clients receives notification.

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Recalls

A Recall is a manual process used to recover funds when incorrect beneficiary wire information was provided during payout creation. Unlike returns, recalls require clients intervention and are not guaranteed to succeed.

When to Use Recalls

Recalls are appropriate when:

• Wrong account number was provided.
• Incorrect routing information was used.
• Beneficiary name doesn't match account holder.
• Funds were sent to an unintended recipient.

Recall Process Flow

1. Payout Creation: Clients creates payout with incorrect beneficiary information.
2. Fund Transfer: LocalPayment transfers funds to the specified (incorrect) account.
3. Status Update: Payout status changes to Completed.
4. Recall Request: Clients discovers error and requests recall via operations team.

How to Request a Recall

To initiate a recall process:

1. Contact Operations: Email the operations team immediately.

2. Provide Documentation: Include all necessary supporting documentation:

   • Original payout transaction ID.
   • Correct beneficiary information.
   • Reason for recall request.
   • Any supporting evidence of the error.

3. Wait for Assessment: The operations team will review your request and coordinate with the beneficiary's bank.

Important Recall Considerations

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Critical Information

• No guarantee: We cannot guarantee successful fund recovery.
• Bank dependency: The beneficiary's bank has full discretion to approve or deny recalls.
• Time sensitivity: Submit recall requests as soon as possible after discovering the error.
• Documentation: Comprehensive documentation improves recall success chances.

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Prevention Best Practices

Before Processing Payouts

Verification Checklist

• Double-check beneficiary account numbers.
• Verify routing information accuracy.
• Confirm beneficiary name matches account holder.
• Test with smaller amounts for new beneficiaries.
• Implement internal approval workflows for large transactions.

Monitoring and Response

• Set up notifications for payout status changes.
• Monitor completed payouts for potential issues.
• Maintain accurate beneficiary information records.
• Establish clear procedures for handling return/recall scenarios.

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Getting Help

If you encounter issues with returns or recalls:

• Returns: These are handled automatically; you will receive notifications when they occur.
• Recalls: Contact our operations team with complete documentation.
• General Support: Reach out to our support team for guidance on prevention strategies.

Understanding these processes helps ensure smooth payout operations and quick resolution when issues arise.