When a transaction results in an R03 error from a financial institution, we would expect the transaction to cancel automatically. This is not the case, and the transaction remains Pending.
From Dwolla:
The status of a transfer only changes when or if we receive a return code from a financial institution.
Is this behavior specific to R03? We don’t observe for any other return codes (R01).
Hi @Stephen_Donahue, the ACH return R03 code (no account/unable to locate account) should automatically fail the transaction, and remove the funding-source. Do you have a transfer ID that you can share? I would love to take a deeper look into why the transfer status is pending and not failed.
There are some other return codes that trigger certain actions against the funding-source and the Customer account. Please check out this article for more information on ACH return codes.
Hi @shreya! Thanks for taking a look at this. One of the transaction ids impacted by this is 03dc2ca4-4b7e-e911-8119-d7bc0de34d9c
Just to add a little clarity, this error occurred in our sandbox environment. While the transaction within Dwolla was failed, it doesn’t appear that the customer_transfer_failed webhook was called. While this article (https://www.dwolla.com/updates/test-ach-returns-sandbox-environment/) doesn’t address the problem specifically, it does mention that customer_transfer_failed is called when an R01 error occurs but this function is omitted from the section on R03 errors.
@shreya please reference the ID that @MCCOLEMAN shared
Hi @MCCOLEMAN, thanks for posting that information! When I look up the transaction, it does look like it failed with an R03 code. I tried replicating this situation with in my Sandbox, and I am getting both customer_bank_transfer_failed and customer_transfer_failed webhooks. 
I have re-indexed the transactions for your Sandbox account; hopefully it kicks off any/all webhooks that haven’t been fired yet.
I wonder what you get when retrieve the transfer; do you get the failure link in the response body? Let me know!
Hi Shreya, hope everything is going well.
We came across another instance of this event occurring where we didn’t receive the webhook. Is there a secure way for me to provide you with information about the transaction?
Best,
Michael
Hi @MCCOLEMAN!
Sure, you can send me a direct message with the transaction details.
Seems I’m unable to send you a direct message through this board - is there another way to send one?
Hi @MCCOLEMAN, yes! You can email me at sthapa@dwolla.com.
Is this in Production? If so, you may have a shared Slack channel with us. You can reach us out there too!