|
|
|
|
|
| |
IRDs: Forward vs Reverse
Understanding the Difference
|
|
| |
By now, most
people in the financial world are at least
vaguely familiar with the concept of Image
Replacement Documents (IRDs). With the advent
of electronic money transfers, it has become
necessary to, at times, stop the electronic
process and print out a physical copy of the
check. The
IRD is the name for this reprinted
copy – a legal, negotiable document - that
replaces the original check, which was
presumably destroyed once it was scanned and
sent on its electronic way.
The
difference between
Forward and
Return IRDs,
however, continues to remain a mystery to many
people, but in reality, the differences are
fairly simple to understand.
First, let’s
consider the
Forward or “regular” IRD. In order
to facilitate an electronic transfer, the
original check is scanned and an electronic
image of that check, front and back, is
created. This electronic image often makes it
the entire way through the system without ever
having to be reprinted. However, on some
occasions – usually when one of the banks along
the way is not equipped to handle electronic
transfers, or when someone requests a copy of
their cancelled check – there is a need to
reprint the document.
In order to
fit all of the necessary information onto the
new IRD, the newly printed image of the check is
slightly reduced in size. This means that the
MICR line is no longer machine readable, and for
this reason, a nearly identical MICR line is
reprinted in full size at the bottom of the
document (with the addition of a forward IRD
identifier) so that it can be properly read by
optical and/or magnetic equipment. Once
printed, the IRD is then sent on “the old
fashioned way” via physical means such as the
mail system.
Now, let’s look at the
Return IRD,
and how it differs from the
Forward version. In
terms of the physical document, the
Return IRD
is exactly the same as the
Forward IRD, except
that it has space for an additional “full-size”
MICR line beneath the one found on the
Forward
IRD. Typically, there is a perforation that
allows this second MICR line to be removed at
the appropriate point in the process. |
|
|
|
|
|
|
Forward IRD |
|
Return IRD |
|
 |
|
 |
|
Face |
|
Face |
|
|
|
 |
|
Back |
|
Back |
|
|
|
 |
|
The MICR line at the bottom of the
Forward IRD (left) is nearly identical
to the MICR line on the check image
above it, except that it is full-size so
that it can be machine read. The Return
IRD (right) is identical to the Forward
IRD, with the only difference being the
addition of a second full-size MICR line
containing reverse routing information
so that the equipment knows to send the
check back through the system. |
|
|
|
|
|
|
So, the
question becomes, “Why two MICR lines on a
Return IRD?” Well, if we again assume that the
original check has been scanned and
electronically transmitted, let’s now imagine
that the check ultimately “bounced” due to
insufficient funds. The second MICR line is
simply one that contains new routing
information, along with a return IRD identifier,
that tells the reading equipment that this
transaction has to go back through the system.
Doing things
the old fashioned way, once the account holder
deposited the funds to cover the bounced check,
they could then re-submit the same check to be
processed a second time. The only difference
with the new method is that the second MICR line
– the one with the reversed routing information
encoded into it – is now removed (remember the
perforation mentioned above), and the end result
is essentially a
Forward IRD (with its lone
remaining MICR line being the full-size version
of the one on the reduced image of the check)
which can now be sent through the system for
re-processing (assuming the necessary funds have
now been deposited).
Aside from
insufficient funds scenarios, there are also
some other instances where it may be necessary
to print a
Return IRD, with one example being a
check that has had a “stop payment” request from
the issuer. However, the vast majority of
Return IRDs are printed for checks that are
being returned for insufficient funds or other
common problems with the account from which the
money is being drawn.
To summarize, the
Forward IRD is
a document that bears a reduced image – front
and back - of the original check, along with a
standard, full-size version of the check’s MICR
line at the bottom of the document that allows
for machine readability of the IRD. The
Return
IRD is exactly the same as the
Forward IRD,
except that it has a second, “reverse direction”
MICR line which can be removed once the IRD has
made its way back to the beginning of the
process and is ready to be re-submitted. |
|
|
|
|
|
|
|
|
For more information
or samples
click here.
Or call Relyco
1-800-777-7359 or email us at
info@relyco.com |
|
|
|
|
| |
|
|
|
|
|
|
 |
Corporate Headquarters
100 Main Street, Ste 222 - Dover, NH 03820
Tel: (800) 777-7359 - (603) 742-0999 - Fax: (603) 742-9993 |
|
|
|
|
|
|
|
|
| |
Home
-
Company -
Products -
Services -
Solutions -
Partner Program -
Contact Us
|
|
|
|
|
|
|
|
|
|
|
|
