Personal Checks

[FrameMakers]

Lately we have been getting a higher percentage of bounced checks. We don't get many personal checks as most people use debit or credit cards anymore.

It seems that many that still use paper checks are doing it with a dishonest heart.

I am considering no longer accepting personal checks. I hate to have to make this rational, but I am wondering if its worth it. I don't like the idea of limiting my customers payment methods but this is starting to be a problem.

Any thoughts?

[Framing Goddess]

Oooooh, it's that whole thing of saying "No." that I would resist. Like "No Checks."

Like credit card processing fees, I would factor it into the cost of doing business.

edie the justsayyes goddess

[Framerguy]

Dave,

Do you have a "bad check" sign posted in your business? I had a prominent sign stating there would be a $30 bad check fee charged and I didn't have any problem whatsoever. We haven't had a single bad check since I joined forces with my present boss but, as you state, most use plastic nowadays.

If you have a clear problem with bad checks then you need to do something about it. Those people are not writing bad checks unknowingly, for the most part, they realize that the check is rubber and make the decision to proceed anyway. In my book that is an attempt to defraud you and your business and should be dealt with accordingly.

I would post a "bad check" sign in a prominent place and point it out to anyone who wants to write a check to pay their bill. I would make the penalty high enough to make them think before proceeding with their deceitful decision. The honest ones won't mind the reminder and those who know they don't have enough in their account to pay their bills will be forwarned.

I realize that service charges are hard to enforce but they are like security hangers in my opinion. They don't really work well but are there to keep the basically honest people honest.

Framerguy

[B. Newman]

How difficult (read: "expensive) is it to get one of those electronic gizmos that reads the check immediately?

We live near a "tourist" area where nearly every business has that. Write all the checks you want - they clear or they don't - immediately!

We even experienced this at our local Pearle Vision store. They ran the check and then handed the "cleared and voided" check back to us for our records!

[Rick Bergeron - CPF]

Our County Prosecutor has a Free program which merchants can join. The Prosecutor provides the sign for display. The maximum "handling charge" merchants are allowed to use for any returned check is $20. When a check is returned, the merchant sends a scripted, certified letter giving 2 weeks for the customer to make the check good. After that, the merchant sends the check to the Prosecutor with proof of the certified letter and scripted affidavit.

The process then procedes where the customer gets a succession of letters, followed by phone calls from the prosecutors office. They must make the check good with the prosecutor. To keep the returned check from their record, they must also pass a course in personal finance.... AND purchase the course materials.

Though the process takes a while to follow through, the headache is reduced. No phone calls to the customer. If they come in to make things good after the check is sent to the prosecutor, "Sorry", they must pay the prosecutor... not the business.

[Bill Henry-]

Luckily we’ve had very few bounced checks over the years. Nearly all of them have been results in bad bookkeeping on our customers’ part. When notified of the problem, most have been extremely apologetic claiming that their spouse had borrowed the checkbook and failed to fill in the register. Okay, it happens. Most come in within a few days with cash and do not hesitate to pay the NSF fee that we’re charged with.

Of the four that had remained deadbeats, three times we filed in small claims court. This frightened the people enough so they settled before it went to court. Each time we collected the $35 filing fee along with the check amount.

The last time we sensed that small claims would not work. We simply waited a month or six weeks then went to her bank, explained the situation to one of the officers (stay away from the tellers) and asked if this customer had at this time sufficient funds to resubmit the check. (They won’t tell you the actual balance but may let you know if the check will clear.) It did, so we got the cash. We lost the NSF fee, but we didn’t think we could recover it anyway.

Despite the occasional problems, we would never consider refusing personal checks. Most people also know that when checks are returned with insufficient funds, the bank charges a fee. A sign in your shop noting that you will recover that fee not only is negative, but won’t stop a dishonest person from trying to stiff you and might make a honest one flinch.

[wpfay]

Tom,
The state allows you to collect up to 3 times the face value of a check that bounces. Most folk that are familiar with this law are quick to cover the bad check before you turn it over to the state or a collection agency.

3 uncollected checks in 33 years for a total of less than $100.00.
Two were known deadbeats that were a bit threatening and needed $20.00 cash. In both instances I figured losing $20 was smarter than facing their anger.

[JbNormandog]

I got one of the credit card machines that instantly runs through a check like a credit card, prints out on the check that it has been deposited and then I give it back to the customer.

If you don't want to spend the money for one, only take checks for deposit and not for final pick up.

Post a sign that reads, " Checks accepted only for down payment, balance must be cash or credit" and stick to it unless you REALLY kow the person giving it to you.

I haven't been burned yet. (KNOCK ON WOOD)

[Framerguy]

Thanks, Wally, that is very good information to have on hand. As you know most of my business dealings were up in the Midwest and I can recall only 2 returned checks in 16 years of business up there and I don't think I had to take either one to court.

This immediate area is so affluent that I would be surprised if more than one person per week would write a check. We have to deposit a few some weeks but most transactions are by plastic. And we rarely have a customer pay in cash.

Yesterday we sold 24 paintings to a designer up in Alabama and he peeled plastic like it was a box of Kleenix! I didn't realize that people carried that many cards!! Nice sale and his boys came in, wrapped everything in furniture blankets, and loaded it in a box truck. I didn't have to make that trip up to Auburn again. graemlins/thumbsup.gif

FGII

[AnneL]

One reason you might be seeing an increase in bounced checks is because the way they are processed has changed in the last year. There used to be a 2-7 day delay between the time the check was deposited in the bank and the time the funds were taken out of the check writer's account due to the fact the banks had to ship the checks to each other for processing. Last year it became possible for banks to do this part by electronic means (it required a change in regulations) so that now they can draw funds instantly. Unfortunately, deposits might still take a few days to be credited. Some people are still writing checks thinking they have a few days to get the money into their account like they used to.

[FrameMakers]

JB what is the name of the machine you use?

As to the number we are now getting about 1 a quarter. but we only deposit about 100 per quarter so the percentage is to high in my opinion.

This job was paid in full buy check at the time of the order, but it was a rush job due the next business day.

Even though the Check 21 system is fast for the banks they still take 10 days to send you the NFS check back before you can begin to try to get your money.

[Rogatory]

Anne, your right. There was a buisness show on PBS about this a couple of years ago.
The banks are slow to deposit on purpose, so they can collect "overdraft" fees from their customers. It's a multi million dollar business.

[McPhoto]

In Pennsylvania, the legal maximum you can "charge" a customer if they bounce a check on you is $20 - - -
We used to telephone the offending customer to let them know of their "over-sight" and then get some "song & dance" about how their bank made the error & to just redeposit it, but, when our bank started charging us a fee for our customer's bounced check we started sending a certified letter with the fee included. If that failed, we would take it to the magistrate & file charges.

[Dave]

In Indiana, and I believe it would apply to all states, state law governs bad check collection procedures. Local county prosecutors have a big say in how much of a problem bad checks become.

One prosecutor we had would not pursue anyone who wrote a NSF check for less than $ 100.00 even if you followed all the procedures required by Indiana law. When I asked his office if someone in this county could go around all day and write checks for less than $ 100.00 and get away with it they stated "Yes"!

The next prosecutor we had took a firm stance and worked with merchants diligently to eradicate the problem. We would just forward them the check and they would send out the required paperwork and collect a $ 25.00 fee. After collection, we would receive the value of the check + the $ 25.00. It was amazing how the number of bad checks we received dwindled during his first year in office and thereafter.

If you are experiencing a problem with bad checks, call your prosecuting attorneys office and discuss with them what they would like you to do to resolve the issue.

Dave Makielski

[FrameMakers]

Bad check penaltys buy state (http://www.ckfraud.org/penalties.html#civil)

I would think that the treat of 3x the checks value plus attorney fees would scare most people and result in a quick recovery.

[JbNormandog]

Framemakers the service is through TELECHECK and it is part of my credit card machine. The model is Eclipse (yes like the cmc) and has a place to slide checks into the bottom then prints directly on them and spits them out the same way.

The machine batches itself every night after it batches credit automatically.

There is a monthly service charge but so far it has been worth it. The money hits sooner and I don't go to the bank as often and haven't had a check bounce yet.

[trapper]

Just say " NO " !
I refuse any credit cards..and give a discount for cash only. Works for me! Only had one customer that I can recall go across the way to an " ATM " machine.
I have this on a sign right by the display table.

I got a customer now that wants to pay by personal check. ( He wants museum glass, on 3 pcs of art as well as the mat and frame ). We won't order until the $ is in hand. With this guy I am going to have to take the check immediaitely to his bank and cash it...then we order the parts and pieces..but not untill then.
A highly unusual case for us..Glad I don't get these kind too often. Infact he is the first one ever. A lawyer to boot with a bad rep proceeding him. I am told that if I can pull this off I will be the first ever not to be taken in by him someway or another. I have made it perfectly clear to him that I am not really that interested in doing any work for him. I would rather be safe than sorry and out a bunch of $ and have to spend hours chasing it down.
In a couple of weeks we will be hit with tourist..Nothing but tourists and they all like to use plastic and checks. This goes on every year for us. I don't take plastic so somehow I end up with a lot of travelars checks. Most like to use them cuz it usually means they can get some cash back.
What I am finding from this group is that most of the time it is an individual type of thing. What will work for you and your area won't stand a chance elsewhere. There just doesn't seeem to be any rules set in stone.

[Janis]

I've been very fortunate to have few bounced checks - and those that did have all been made good plus fees.

However, to avoid those hassles, if I get a check that I question whether it will clear or not, I take it directly to the bank it is drawn on and cash it immediately. If it won't clear, I do no work on the piece, and check back periodically to see if the check will clear the bank. Going to the bank on the 1st of the month, the first Friday of a month, the 15th, are good times to get checks to clear.
Janis

[Paul N]

Maybe you should put a sign in the window saying:

We will frame all bounced checks and display them here!

[FrameMakers]

Paul, there have been lawsuits about doing what you suggested. The shops have lost (twice)

[Paul N]

Interesting.

And the suits were about??? Slander?? Libel?? Didn't those checks really bounce?

[Maryann]

Just say " NO " !
I refuse any credit cards.. Whatever works for you, but I bet that you're losing sale after sale after sale. When I go on vacation, I never get travelers checks and normally just have pocket change. Everything else goes on the card to be taken care of when I get home....and most people are just like me. Down here, we try and make it painless for people to part with their money and accept checks, all the major credit cards and cash. Probably 80% of the business is plastic, 15% checks and 5% cash.

In ten years, we've had 2 bad checks. One was an embarrassing ooops, the other went to the district justice and was collected. The DJ said to make sure we always put down their license number - then they can be tracked down if needed.

Years ago, our local butcher shop used to tape all their bad checks by the register. I did love checking out who was 'on the list'. Ahhhh, the joys of a small town!

[Woodshaper]

Checks bounce for a number of reasons. My wife and I are currently victims of someone passing fraudulent checks with our name and address on them. The account number is fake so the checks are being returned to the merchants who are turning them over to collection agencies. At least one place, a pizza place, has our name posted as passing bad checks according to the police.
In every instance the merchant did not get adequate ID. In one instance the person signed the check and misspelled my name.
The real shocker is that the bank paid two of the checks and deducted from one of our accounts even though the check did not have our account number. They can't explain how this happened but corrected our account.
This has been a royal pain and will take months to straighten out, but proper procedures by the merchant would have prevented every instance in our situation.

[DTWDSM]

The real shocker is that the bank paid two of the checks and deducted from one of our accounts even though the check did not have our account number. They can't explain how this happened but corrected our account.
Another Joy of living in a small town perhaps????

[Bob Larson]

I used to work in a mall, and we got a lot of bounced checks. Then we stopped accepting checks for off-the-walls art purchases, and only took them for custom framing deposits and balances.

That immediately put an end to bounced checks, because we had an easy way to contact them, or had their artwork. A few people might make honest mistakes here and there, but those are a lot easier to remedy than the ones that write the bad check knowing they can get out the door without actually paying for whatever they "bought."

[BILL WARD]

downside of those"instant" machines is that every now and then they reject a check---they give a code number, but will not give reasoning....I've even had customer call the cc co. and were told no explaination would be given......so how do we fix THAT problem???