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FedReceipt® Plus for Returns Frequently Asked Questions

The Federal Reserve Banks’ most recent enhancement to the Check 21-enabled suite of services, FedReceipt Plus for Returns, offers financial institutions across the country the opportunity to optimize the benefits of end to end electronic check processing. The service provides the bank of first deposit (BOFD) with an electronic file of return items that have been deposited with the Federal Reserve Banks in an image return letter and all paper return items received that are imageable. (Note that non-imageable items will continue to be delivered as paper.)

Below is a current list of frequently asked questions and answers which should prove helpful in your consideration of this service enhancement.

File Delivery Options

PDF Delivery Option

Pricing

Return Record Appearance

Return Reason Code

Images with Strips

Getting Started/Agreement Form/Testing

File Delivery Options

Q: How are FedReceipt Plus for Returns files sent to me?

A: You can receive your return files via any available Check 21 channel: FedLine Web®, Secure Transport or Connect:Direct.

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Q: What is the PDF (printable) solution I’ve heard about in conjunction with the FedReceipt Plus for Returns product?

A: With this option, the Bank of First Deposit receives their returns file via FedLine Web or Secure Transport, prints the returns file on a printer and then uses that information to charge back customers. The PDFs can also serve as customer notification if the bank provides documentation to their customer.

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Q: When should I expect my return files to be available?  Will they be sent separately from my forward files?

A:Timing of the FedReceipt Plus for Return files via FedLine Web, Secure Transport and Connect:Direct will vary by Federal Reserve District and financial institution.  While the morning delivery time is not guaranteed, generally files are targeted for delivery sometime before noon local time with a final file, if needed, by 2 p.m. local time.  They will be sent separately from your FedReceipt forward files, but will use the same folder/directory structure.

(PDF files are on the same delivery schedule as the paper items that you receive today.)

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Q: What is the best approach for determining which is a forward file and which is a return file upon receipt?

A: There are a number of ways to identify FedReceipt Forward files and FedReceipt Return files.  These include:

  • Opening a file to determine for sure whether it is a forward or return file is the most reliable approach to identifying forward from return files.  Return files can be differentiated by looking in the Field 2 Collection Type Indicator in the Type 10 Cash Letter Header Record.  Return files have a “03” in Field 2 while forward files contain a “01” in that location.
  • Looking at the file’s size and dollar value.  Experience tells us that the size and number of items in the file is frequently larger for a forward file.  This information can be readily found in the FedReceipt File History List via FedLine Web. 
  • You could elect to use a different transmission RT to easily distinguish return files from forward files prior to opening them for processing.

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Q: Will I get a null file when no returns are sent to me on a given day?

A: The Federal Reserve Banks will not be sending a null file in this situation.  Accordingly, it is very important for FedReceipt customers to establish daily balancing procedures to ensure all files are accounted for.

Debits to your Fed account (or correspondent’s account) should match the actual cash letters received.  We recommended customers take advantage of the Federal Reserve’s account management system, AMI.   AMI provides timely information on account holder balances and details transactions posted to the account.  Your electronic check processing system should be able to locate and retrieve a FedReceipt image cash letter for each AMI entry that reflects a debit to your bank for an image cash letter.

Questions or irregularities regarding debits for FedReceipt files should be directed to the Federal Reserve’s Check 21 Customer Support Unit (800-762-0713). 

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PDF Delivery Option

Q: How do I know if the PDF delivery option is right for me?

A: If your financial institution receives less than 100 return items per day (either directly or through a processor) and is willing to post manually, you should discuss this delivery option with your account executive.

See complete information on PDF delivery of return substitute checks. 

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Q: Will I receive all my return items in a PDF file?

A: All return items that are imageable will be sent to you as part of the PDF file. The very small number of items that aren’t imageable will continue to be delivered to you as paper returns. Also, in the event an item does not meet the requirements for conversion from image to substitute check, it will be listed on the PDF file error report page and will need to be submitted as a Listed not Enclosed (LNE) adjustment case in order to balance.

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Q: When and how will PDF files be delivered?

A: PDF files are delivered on the same delivery schedule as paper items with the file sent by 2 p.m. local time. They are delivered via FedLine Web and Secure Transport and remain available to download, view and print for multiple days.

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Q: What hardware and software requirements are necessary to receive return items as a PDF file?

A: You will need the following to be in place:

  • FedLine Web Credentials - CK21 FedReceipt Level Access
  • Standard printer with double–sided (duplex) print capabilities (can be auto or manual duplex)
  • PDF reader Software - Adobe Acrobat Reader software (free from Adobe.com)
  • MICR ink cartridge to be able to print legal/legitimate substitute checks
  • Standard 8˝ x 11 inch paper (suggested 24 lb. or thicker laser paper)

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Pricing

Q: What are the file and per item fees for this service?

A: Fees for FedReceipt Plus for Returns image cash letters are the same as for FedReceipt Plus for Forward.  The file fee is $2.00 and the per item fee is $.005.  There are no fees associated with the PDF file receipt option.

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Q: Is there any type of pricing incentive associated with this product?

A: Yes, as with FedReceipt Plus forward items, there is a per item deposit discount offered of $0.008 per item applied to FedReturn deposits for financial institutions that move to FedReceipt Plus for Returns.

So your FedReceipt Plus for Returns fee of $0.005 per item + $2/file fee is offset by the $0.008 per item discount applied to your FedReturn collection fees.

Because the PDF version is not priced, financial institutions opting for that service are NOT eligible for the deposit discount.

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Return Record Appearance

Q: Will the items that the Federal Reserve Banks convert from paper to electronic be different in any way from the items received electronically?

A: When the Reserve Banks truncate a paper return item, the Federal Reserve Banks will create the Type 31 Return Record.  In this record, the Reserve Banks will insert the Federal Reserve Banks’ item sequence number instead of the BOFD sequence number and the Federal Reserve Banks’ process date instead of the BOFD endorsement date.

In cases where the Federal Reserve Banks truncate a paper item and the original item ON US is read as blank, the 31 record is populated with two account symbols “//” instead of being left blank.

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Q: Where can I locate the original item MICR line, including the account number?

A: The Type 31 Return Record will contain the original MICR line as received by the Federal Reserve Banks or captured by the Reserve Banks truncating the paper return item.  However, receivers should be prepared to receive less than the full complete MICR line. This could be due to poor quality MICR or read problems during capture.  Blanks or special characters may also be included indicating paying bank or Federal Reserve Bank misreads of the MICR characters.  Expected characters in the MICR fields include forward slashes, blanks, and asterisks and are identified in the ASC DSTU x9.37-2003 standard.  When electronic records are flipped to produce the return records, they will contain the same full or partial MICR detail as captured by the original truncating institution.

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Q: In the X9.37 file, is there any way to determine how many times an item has been returned?  Is this information contained in a certain field?

A: There is not a particular field where this can be determined, but customers can interpret the Type 35 endorsement records to try and make this determination.  Each Type 35 record with a return reason code should represent a return cycle if the fields are populated appropriately.  Type 35 records without a return reason code represent subsequent endorsements of the same return flow.

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Return Reason Code


Q: What Return Reason Code will be included in the file?

A: Return Reason Code X will be used for FedReceipt for Return items.

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Q: What does Return Reason Code "X" mean, and where can I find documentation for the X     return reason code?

A: For items converted by the Federal Reserve Banks, there will be a return reason code of X in section 5.8 of the return record (Type 31).  The return reason code "X" means “refer to image”. This code is used when the actual return reason code is not available electronically and provides a notification to the BOFD that additional steps may be necessary to appropriately handle the item. The Federal Reserve Banks Companion Document has been updated to reflect use of the "X" and is available via the X9.37 Standards (PDF).

Please note that the Federal Reserve Banks will use this code for any paper return items deposited that are converted to image.  Also, since this code was recently introduced, your software system may need to be updated to include this code for processing.

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Q: Why do some return items not include a valid Return Reason stamp in the image?

A: When an item is received electronically and returned electronically, it may not be physically stamped for a return reason code to be shown in the image.  Instead, the Return Reason Code will be inserted into the Type 31 record and also into the Type 35 record.  When an electronic return is created from a paper item, the item should be physically stamped and the return reason code should be included in the image.  However, many image cameras are not able to detect red ink, so if the items are stamped with return reason stamps printed in red ink, they may not be displayed.  Returning banks are advised to use blue or black ink to ensure image survivable return reason stamps.

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Image with Strips


Q: Why do the Federal Reserve Banks capture the return item with the strip in the images in FedReceipt Return files?

A: This is a function of the Federal Reserve Banks’ paper processing flow, where return items are stripped and qualified for deposit with the Reserve Banks.  The Federal Reserve Banks capture the items with the strip in order to fully capture the qualified item that is being processed in line with Check 21 requirements. 

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Q: Will the image with the strip (a taller image) create problems in my archive or when I print substitute checks?

A: No.  Paper forward collection items are deposited with strips.  These items have always been converted to images and include in forward FedReceipt/FedReceipt Plus files.  Proper scaling and clipping of stripped items and re-imaged substitute checks is documented in the ASC X9.100-140-2004 Specifications for Image Replacement Documents (IRDs).  The standard describes how images should be scaled to fit into the designated substitute check image area without losing data.  The standard also describes how clipping should be performed for substitute checks.  Substitute checks can be identified when the EPC Code in the 31 record has a value of "4".  When present, these images should be clipped and resized to the image area of substitute checks in order to maximize the visible area of the original item.

Receivers should work with their technical staff and vendors to understand clipping options to handle various scenarios.  We also recommend customers test with these different scenarios in order to identify issues before production implementation.

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Getting Started/Agreement Form/Testing

Q: How do I get started?

A: Contact your account executive to let them know of your interest and discuss your current volume of return items/day.  They will complete a profile for our customer database which will put you in the service implementation pipeline.  They will also assist you in completing a service agreement (PDF) (Note that this agreement must be received prior to your production implementation date.)

A service agreement (PDF) for those institutions choosing the PDF file delivery option is also available.

You should also check with your software vendor to determine their readiness to support FedReceipt Plus for Returns.  A list of questions to discuss with your vendor is available to aid your discussion.

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Q: How much testing is involved before implementation?  Does testing vary dependent upon which other Check 21-enabled services I currently use?

A: Yes, the amount of testing required to get you up and running is dependent upon which other Check 21-enabled services you currently use.

For customers currently receiving FedReceipt Plus files for forward items:

Testing and implementation will be performed in the same manner used for FedReceipt Plus.  One or more test files will be sent in order for you to test your backend system and processes. Your testing requirements will be somewhat abbreviated from those you experienced with FedReceipt Plus because you are already familiar with file monitoring, the downloading process and  ASC DSTU x9.37-2003 file conventions and have FedLine Web credentials in place.  Please remember that:

  1. Your local Federal Reserve Check 21 Product Specialist will work with you to coordinate test file creation, explanation of service, etc.
  2. Check 21 agreements must be checked to include FedReceipt Plus for Returns and updated agreements must be received prior to production dates
  3. Service implementation will occur at least one week after successful testing has been completed

For customers not yet receiving FedReceipt Plus files for forward items:

Your local Federal Reserve Check 21 product Specialist will work with you to coordinate testing, agreement signing and establishment of FedLine Web credentials.

Please refer to the Testing section of our “Check 21-Enabled Products Implementation Overview” guide (PDF).

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