Exceptions & reversals

What goes wrong, and how is it undone?

The happy path is where demos live. Exceptions are where operations, cost and customer trust live. Every industry has a catalog of things that go wrong and a formal way to undo each one.

What it is

Exceptions are the predictable ways a process fails: rejections, disputes, corrections, fraud. Reversals are the formal ways to undo an outcome, usually with deadlines, evidence requirements and someone else's approval.

Most of the cost of running a regulated product sits in the exception paths, not the happy path.

Where you'll see it

Industry	Exceptions and reversals
Payments	Chargebacks, refunds, returned bank transfers
Healthcare	Claim denials, appeals, resubmissions
Telco	Blocked messages, rejected registrations, failed number ports
Payroll	Off-cycle payments, corrections, reversed deposits
Insurance	Disputed claims, rescinded policies

Questions to ask in week one

What are the five most common exceptions, and how often does each one happen?
Which can we fix ourselves, and which need a counterparty?
What deadlines apply to each reversal, and what evidence does it need?
Who notices the exception first: us, the customer or their end user?
What does each exception cost us in time and money?

The trap

Designing the happy path first and adding exceptions later. In regulated industries the exception flow is often the product customers judge you on, because it's the moment they need you most.

In the Field Guides

B2B payments: order to cash

Most of an AR team's week is exception work, and every exception runs its own clock.

Exception	Who starts it	Clock (as of Oct 2026)	The way back
Credit hold	The seller's ERP	Hours to days, often with a sales escalation	Release, ship part, prepay, raise the limit, cancel
Invoice rejected	Payer AP	Until fixed; the clock often restarts	Fix and reissue
Dispute or deduction	Payer	Seller's policy; the retailer's deadlines	Case: credit memo if valid; repayment or offset if not; write off small or old ones
ACH return: insufficient funds (R01), account errors (R02 to R04)	Payer's bank	2 banking days	Reverse the application, re-collect or switch rail
ACH return: business says "not authorized" (R29)	Payer's bank	2 banking days	Fresh authorization; never retry blindly
Suspect ACH credit returned (R17)	Seller's bank	Nacha fraud rules, 2026	Show your bank KYB evidence
Returned check	Paying bank	Midnight deadline; fraud claims months later	Reverse, reopen, fee, re-collect
Card chargeback	Payer's issuer	Up to 120 days for card-absent fraud; 30-day response cycles (Visa)	Represent with PO, proof of delivery, Level 3 data
Wire, RTP or FedNow recall	Payer's bank	None: a request the receiver can refuse	Voluntary return, or law enforcement
Canadian business PAD claim	Payer's bank	10 business days; 90 calendar days with no agreement	Debited back to the seller
Unapplied cash	Nobody	Until researched	Suspense or on account, then apply
Customer insolvency	Court, trustee	US: priority for goods received 20 days before filing, reclamation within 45, preferences back 90. Canada: repossess goods delivered in the last 30 days	Stop shipping, file claims, defend preferences, claim on insurance

Credit hold

Who starts it: The seller's ERP
Clock (as of Oct 2026): Hours to days, often with a sales escalation
The way back: Release, ship part, prepay, raise the limit, cancel

Invoice rejected

Who starts it: Payer AP
Clock (as of Oct 2026): Until fixed; the clock often restarts
The way back: Fix and reissue

Dispute or deduction

Who starts it: Payer
Clock (as of Oct 2026): Seller's policy; the retailer's deadlines
The way back: Case: credit memo if valid; repayment or offset if not; write off small or old ones

ACH return: insufficient funds (R01), account errors (R02 to R04)

Who starts it: Payer's bank
Clock (as of Oct 2026): 2 banking days
The way back: Reverse the application, re-collect or switch rail

ACH return: business says "not authorized" (R29)

Who starts it: Payer's bank
Clock (as of Oct 2026): 2 banking days
The way back: Fresh authorization; never retry blindly

Suspect ACH credit returned (R17)

Who starts it: Seller's bank
Clock (as of Oct 2026): Nacha fraud rules, 2026
The way back: Show your bank KYB evidence

Returned check

Who starts it: Paying bank
Clock (as of Oct 2026): Midnight deadline; fraud claims months later
The way back: Reverse, reopen, fee, re-collect

Card chargeback

Who starts it: Payer's issuer
Clock (as of Oct 2026): Up to 120 days for card-absent fraud; 30-day response cycles (Visa)
The way back: Represent with PO, proof of delivery, Level 3 data

Wire, RTP or FedNow recall

Who starts it: Payer's bank
Clock (as of Oct 2026): None: a request the receiver can refuse
The way back: Voluntary return, or law enforcement

Canadian business PAD claim

Who starts it: Payer's bank
Clock (as of Oct 2026): 10 business days; 90 calendar days with no agreement
The way back: Debited back to the seller

Unapplied cash

Who starts it: Nobody
Clock (as of Oct 2026): Until researched
The way back: Suspense or on account, then apply

Customer insolvency

Who starts it: Court, trustee
Clock (as of Oct 2026): US: priority for goods received 20 days before filing, reclamation within 45, preferences back 90. Canada: repossess goods delivered in the last 30 days
The way back: Stop shipping, file claims, defend preferences, claim on insurance

Sources: Nacha and on credit-push fraud, Visa Rules (April 2026), Rule H1, vendor rights in bankruptcy, BIA s.81.1. Card processors set their own response deadlines, often shorter than Visa's.

Nacha counts R29 toward the 0.5% unauthorized threshold; crossing 3% administrative or 15% overall starts an inquiry. The clocks are short for business accounts, which is why sellers like pulling from businesses, and why a missed day is a lost case.

Ask an expert: what are the top three exceptions by volume and by cost, and for sellers to retailers, the top deduction reason codes by dollars and the share won back?

B2B payments: procure to pay

Most of an AP team's week is exceptions, and once money is released, every rail runs its own clock.

Exception	Who starts it	Clock (as of Oct 2026)	The way back
Match exception	AP	Buyer's policy; the discount window keeps running	Tolerance, route to requester, credit memo, wait for receipt
Changed bank details	AP or the bank's monitoring	Before release	Callback to a number on file, account validation, release or block
ACH return: account closed, missing or invalid (R02 to R04)	Supplier's bank	2 banking days	Fix the vendor master, re-validate, resend
ACH reversal	Buyer's bank, for the buyer's own error	5 banking days; duplicates and erroneous entries only	Reversing entry
Suspect credit returned (R17), or return requested (R06)	Supplier's bank	Only if funds remain	Recovery if the fraudster hasn't moved the money
Positive Pay exception	Buyer's bank	The bank's daily cut-off; the default is set by agreement	Return the altered or counterfeit check
Lost, stolen or uncashed check	Buyer	Stale after a few months	Stop payment and reissue; void; report as unclaimed property
Virtual card never charged	Supplier inaction	Card expiry	Reissue, or fall back to ACH or check
Wire, RTP or FedNow sent to a fraudster	Buyer's bank	No right of return; hours matter	Recall request; FBI IC3 report
Duplicate already paid	AP or a recovery audit	Supplier goodwill	Credit or refund request

Match exception

Who starts it: AP
Clock (as of Oct 2026): Buyer's policy; the discount window keeps running
The way back: Tolerance, route to requester, credit memo, wait for receipt

Changed bank details

Who starts it: AP or the bank's monitoring
Clock (as of Oct 2026): Before release
The way back: Callback to a number on file, account validation, release or block

ACH return: account closed, missing or invalid (R02 to R04)

Who starts it: Supplier's bank
Clock (as of Oct 2026): 2 banking days
The way back: Fix the vendor master, re-validate, resend

ACH reversal

Who starts it: Buyer's bank, for the buyer's own error
Clock (as of Oct 2026): 5 banking days; duplicates and erroneous entries only
The way back: Reversing entry

Suspect credit returned (R17), or return requested (R06)

Who starts it: Supplier's bank
Clock (as of Oct 2026): Only if funds remain
The way back: Recovery if the fraudster hasn't moved the money

Positive Pay exception

Who starts it: Buyer's bank
Clock (as of Oct 2026): The bank's daily cut-off; the default is set by agreement
The way back: Return the altered or counterfeit check

Lost, stolen or uncashed check

Who starts it: Buyer
Clock (as of Oct 2026): Stale after a few months
The way back: Stop payment and reissue; void; report as unclaimed property

Virtual card never charged

Who starts it: Supplier inaction
Clock (as of Oct 2026): Card expiry
The way back: Reissue, or fall back to ACH or check

Wire, RTP or FedNow sent to a fraudster

Who starts it: Buyer's bank
Clock (as of Oct 2026): No right of return; hours matter
The way back: Recall request; FBI IC3 report

Duplicate already paid

Who starts it: AP or a recovery audit
Clock (as of Oct 2026): Supplier goodwill
The way back: Credit or refund request

Sources: Nacha on fraud monitoring and credit-push fraud, FBI IC3. Positive Pay defaults and stale-check periods vary by bank agreement and state law.

APQC data from 2020 put duplicate or erroneous payments at 0.8% of disbursements for top performers and 2% for the bottom, by count (CFO.com). Usual causes: duplicate vendor records, a PDF re-sent after the paper copy, a renumbered invoice, paying from a supplier statement.

Push payments give the buyer no right to take money back: after release, every reversal is a request, and for fraud the window is hours.

Ask an expert: what are the top three exceptions by count and by dollars, and what share of payments are voided or reissued, and why?

B2B payments: spend management

Card exceptions run on network clocks; expense exceptions are conversations with an employee.

Exception	Who starts it	Clock (as of Oct 2026)	The way back
Decline: limit, category, prepaid balance	Processor or platform	2 to 3 seconds	New limit or card; one decline isn't Reg B adverse action
Stand-in approval against policy	The network, if the processor is down	At authorization	None at network level; recover from the employee, or absorb
Forced, late or larger capture	Merchant	Up to the clearing window: 10 days online, 30 for lodging	A dispute; controls can't block it
Refund	Merchant	Within 3 business days of settlement (Visa US), even to a canceled card	Match it to the original sale yourself
Third-party fraud	Cardholder, through the issuer	Visa 120 days; processors sooner; one bank contract 60 days after billing	Chargeback
Missing receipt	Expense tool	Company reminders; the IRS's 60 days	Signed statement plus corroboration; suspend the card
Out of policy or personal charge	Approver or audit	120 days to repay before it's wages	Employee repays; payroll deductions limited by law
Refund to a personal card after reimbursement	Merchant	Any time	Detect it and recover
Reimbursement ACH returned (R02, R03)	Employee's bank	2 banking days	Fix the account and resend
Uncashed reimbursement check	Employee	State dormancy rules	Void, reissue, or report as unclaimed property

Decline: limit, category, prepaid balance

Who starts it: Processor or platform
Clock (as of Oct 2026): 2 to 3 seconds
The way back: New limit or card; one decline isn't Reg B adverse action

Stand-in approval against policy

Who starts it: The network, if the processor is down
Clock (as of Oct 2026): At authorization
The way back: None at network level; recover from the employee, or absorb

Forced, late or larger capture

Who starts it: Merchant
Clock (as of Oct 2026): Up to the clearing window: 10 days online, 30 for lodging
The way back: A dispute; controls can't block it

Refund

Who starts it: Merchant
Clock (as of Oct 2026): Within 3 business days of settlement (Visa US), even to a canceled card
The way back: Match it to the original sale yourself

Third-party fraud

Who starts it: Cardholder, through the issuer
Clock (as of Oct 2026): Visa 120 days; processors sooner; one bank contract 60 days after billing
The way back: Chargeback

Missing receipt

Who starts it: Expense tool
Clock (as of Oct 2026): Company reminders; the IRS's 60 days
The way back: Signed statement plus corroboration; suspend the card

Out of policy or personal charge

Who starts it: Approver or audit
Clock (as of Oct 2026): 120 days to repay before it's wages
The way back: Employee repays; payroll deductions limited by law

Refund to a personal card after reimbursement

Who starts it: Merchant
Clock (as of Oct 2026): Any time
The way back: Detect it and recover

Reimbursement ACH returned (R02, R03)

Who starts it: Employee's bank
Clock (as of Oct 2026): 2 banking days
The way back: Fix the account and resend

Uncashed reimbursement check

Who starts it: Employee
Clock (as of Oct 2026): State dormancy rules
The way back: Void, reissue, or report as unclaimed property

Sources: Visa Rules (April 2026), Reg B, Treas. Reg. 1.62-2, 29 CFR 531.35; capture behavior and processor deadlines from issuer processors' documentation; dormancy periods vary by state.

Two rules surprise newcomers: you can't dispute an authorization, only a cleared transaction, and a platform can't stop a cardholder from filing a fraud dispute. Card reversals belong to the merchant or the network, on their clocks; expense reversals belong to the employee relationship, under employment law.

Ask an expert: what share of our corporate-card disputes are third-party fraud, merchant disputes and employee "friendly fraud", and how many do we write off without filing?

Telco: numbers and senders

Most of this team's operational load lives in exception paths, and nearly all run on someone else's clock.

Exception	The way back	Clock and cost
10DLC brand fails the identity check	Resubmit exact legal data, or appeal	$4.50 per resubmit, $11 per appeal (TCR, Aug 2026)
Campaign rejected by the DCA	Fix description, samples, opt-in proof; resubmit	Days per round; providers report $15 per review
Toll-free verification rejected	Fix and resubmit	Days to weeks
WhatsApp template rejected or recategorized	Appeal (decided within 24 hours) or request category review within 60 days	Hours
WhatsApp enforcement	Appeal, answered in 24 to 48 hours; some spam violations can't be appealed	Blocks of 1 to 30 days meanwhile
RCS agent suspended	The carrier can reinstate; the partner can request launch again	The carrier's timeline
Port rejected	Fix the mismatch and supplement the existing order (a "SUP"), don't start a new one	1 business day (simple) or 4 (non-simple) once clean
Port-out fraud on a mobile	Wireless carriers must authenticate port-outs, notify customers and offer a free lock (FCC rules adopted Nov 2023)	Hours matter
Improper SHAKEN attestation	STI-GA can revoke the provider's token	No token, no A or B attestation
Consumer opts out	Only the consumer can opt back in (START, UNSTOP)	FCC ceiling 10 business days; carriers expect immediate

Sources: TCR fees, Meta enforcement, 47 CFR 52.35, SIM-swap rules, STI-GA.

Regulators reverse themselves too. Brazil's regulator made the 0303 telemarketing prefix optional in August 2025, and federal prosecutors asked for it back in January 2026 (Olhar Digital).

Design the rejection path before the happy path. It's where your customer's launch slips, and where they decide whether your platform earns its markup.

Ask an expert: what are the top three rejection reasons for campaigns, toll-free verifications and WhatsApp templates, and how many resubmissions does a typical launch need?

Field Guides are learning notes, not legal or compliance advice. Rules and fees change; check the cited primary sources before you act on anything here.