Image Replacement Documents (IRDs):  Forward IRDs vs. Return IRDs

Understanding the Difference

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.

The difference between Forward and Return IRDs remains a mystery to many people, but in reality, the differences are fairly simple to understand.

Forward IRD

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.  On some occasions – 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.

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.

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.

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 samples of our image replacement documents, click here.