FedReceipt^® Daily — Returns Frequently Asked Questions

FedReceipt Daily — Returns offers financial institutions across the country the opportunity to realize the benefits of end to end electronic check processing. The service provides the bank of first deposit (BOFD) with an electronic file of incoming return items.

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

File Delivery Options

1. How are FedReceipt Daily — Returns files sent to me?

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

2. Is there a PDF (printable) solution available in conjunction with the FedReceipt Daily — Returns product?

   Yes. With this option, the BOFD receives its returns file via FedLine Web or Axway Secure Client, 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 its customer.

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

   Timing of the FedReceipt Daily — Returns and PDF files via FedLine Web, Secure Client and Connect:Direct will vary by financial institution. Files will be delivered before 8:00 a.m. ET, before 12:30 p.m. ET, and before 2:00 p.m. local time. Depending on deposit patterns, a financial institution may receive multiple FedReceipt — Returns files during those windows. They will be sent separately from your FedReceipt — Forward files, but will use the same folder/directory structure.

   Banks of first deposit (BOFDs) subscribing (PDF) to the Accelerated Imaged Returns Delivery service can choose a delivery time between 7 p.m. ET and 1 a.m. ET for the delivery of their first FedReceipt Daily — Returns file of the business day for an additional fee.

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

   There are two ways to identify FedReceipt — Forward files and FedReceipt — Returns files. These include:

   • Looking at the file name. Forward will have FWD and Return files will have RET within the file name as noted:
     CEeF0.DAT2.zzz. R7777.N8888.D111025.T12031
     zzz=File type (FWD, RET)
   • Opening a file. 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”.
5. Will I get a null file when no returns are sent to me on a given day?

   The Federal Reserve Banks will not send a null file in this situation. It is very important for FedReceipt customers to establish daily balancing procedures to ensure they have accounted for all files.

   Debits to your Fed account (or correspondent’s account) should match the actual cash letters received. We recommend 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 (ICL) for each AMI entry that reflects a debit to your bank for an ICL.

   Questions or irregularities regarding debits for FedReceipt files should be directed to the Support Center.

PDF Delivery Option

1. How do I know if the PDF delivery option is right for me?

   If your financial institution receives fewer 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 relationship manager.

   See complete information on PDF delivery of return substitute checks (PDF).

2. Will I receive all my return items in a PDF file?

   All return items that are imageable will be sent to you as part of the PDF file. The very small number of items that are not 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.

3. When and how will PDF files be delivered?

   PDF files are delivered before 8:00 a.m. ET, before 12:30 p.m. ET and by 2:00 p.m. local time. They are delivered via FedLine Web and Axway Secure Client and remain available to download, view and print for multiple days.

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

   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 8½ x 11 inch paper (suggested 24 lb. or thicker laser paper)

Pricing

1. What are the file and per item fees for this service?

   Please visit the Check Services Fee Schedules for details regarding the fees for FedReceipt Daily — Returns image cash letters (ICLs). There are no fees associated with the PDF file receipt option for customers with an existing FedLine connection.

2. Is there any type of pricing incentive associated with this product?

   Yes, there is a per item deposit discount offer applied to FedReturn^® deposits for financial institutions that move to FedReceipt Daily — Returns. Details are available on the Check Services Fee Schedules.

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

Return Record Appearance

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

   No, the data elements and content of each item will be the same regardless of who captured/converted the item. Paper Returns captured by the Federal Reserve will have a return reason of 'X' - Refer to Image.

2. Where can I locate the original item MICR line, including the account number?

   The MICR information from the original check will appear in the Return detail records 31/35. Expected characters in the MICR fields are identified in the ASC X9.100-187/DSTU x9.37-2003 standard for image exchange.

3. 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?

   There is not a particular field where this can be determined, but customers can review the endorsement records to determine what the processing path of the item has been. If there is more than one 32 record it is likely the item has been presented multiple times.

Return Reason Code

1. What Return Reason Code will be included in the file?

   The Return Reason Code could be any of the valid codes listed in the X9.100-187-2013 Standard for image exchange. The Federal Reserve Banks use Return Reason Code 6 for items drawn on a retired routing number and Return Reason Code X is used for paper deposited return items converted to image by the Federal Reserve Banks.

2. What does Return Reason Code "X" mean? Where can I find documentation for the "X" return reason code?

   For paper deposited return items captured/converted by the Federal Reserve Banks, there will be a return reason code of "X" in field 6 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.

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

   When an item is received electronically and returned electronically, there may not be a physically stamped return reason code on front 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.

Images with Strips

1. Why do the Federal Reserve Banks capture the return item with the strip in the images in FedReceipt — Returns files?

   This is a function of the paper processing flow, where return items are stripped and qualified for deposit. 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.

Getting Started/Agreement Form/Testing

1. How do I get started?

   Contact your relationship manager to express your interest and discuss your current volume of return items/day. He or she will complete a profile for our customer database which will put you in the service implementation pipeline. Your relationship manager will also assist you in completing a Check 21 Services Agreement (PDF) (Note: This agreement must be received prior to your production implementation date.)

   A PDF Check Presentment and Return Service Agreement (PDF) is also available for those institutions choosing the PDF file delivery option.

   A list of questions to discuss with your vendor is available to aid your discussion.

2. How much testing is involved before implementation? Does testing vary dependent upon which other Check 21-Enabled services I currently use?

   Yes, the amount of testing required getting you up and running is dependent upon which other Check 21-Enabled services you currently use.

   For customers currently receiving FedReceipt Daily files for forward items:

   Testing and implementation will be performed in the same manner used for Forward FedReceipt Daily. 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 Forward FedReceipt Daily 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 Federal Reserve Check 21 Implementation Manager will work with you to coordinate test file creation, explanation of service, etc.
   2. Check 21 agreements must be checked to include FedReceipt Daily — 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 Daily files for forward items:

   Your Federal Reserve Check 21 Implementation Manager 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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