A return code, in payments, is a short code attached to a returned bank payment that states why it could not be completed, and the most widely cited example is the ACH return code used in the United States. The main entry lists how those codes work. In general use the phrase covers any coded reason given when a receiving bank sends a payment back through the clearing system.
Returns arise in both directions. A debit may come back because the account lacks funds, has been closed or cannot be found, or because the account holder says the debit was not authorized. A credit, including a payout or disbursement, may come back because the account details are wrong or the account cannot accept it. The code tells the originator which of these happened, and so whether to correct the details, retry, contact the customer or stop.
Other systems have their own sets. SEPA schemes use ISO 20022 reason codes for returns, rejects and refunds, and a direct debit return carries one of them. Return codes should not be confused with a card decline code, which is given at authorization before any money moves, or with a chargeback reason code. Platforms map all of these into their own payout failure and payment failure categories.