Returned Check Advice: Understanding Bank Fees and Protecting Your Business

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Discussion Overview

This thread discusses experiences related to handling returned checks from customers, including bank fees incurred and the potential for charging customers for these fees. Participants share their personal experiences and seek advice on how to navigate these situations.

Discussion Character

  • Anecdotal
  • Opinion-based
  • Exploratory

Main Points Raised

  • One participant, identifying as a consultant, experienced a returned check that resulted in a $12 fee from the bank and an additional $33 overdraft fee, expressing concern about how to approach the customer regarding these charges.
  • Another participant mentions that in Arkansas, there are laws requiring customers to pay fees associated with returned checks, suggesting that local regulations may vary.
  • One participant shares information about California's laws regarding returned checks, noting that businesses can charge specific fees for returned checks and suggesting that businesses can enforce these fees even without written agreements.
  • Several users mention their own experiences with returned checks, including one participant whose bank charges only $5 for a returned check, and they express frustration about the potential need to drive long distances to collect payment.
  • Another participant discusses the possibility of asking for a credit card payment over the phone as a solution to the issue of the returned check.
  • One participant shares their experience of not receiving a call back from the customer after reaching out, indicating uncertainty about the resolution of the situation.

Areas of Agreement / Disagreement

Views differ regarding the handling of fees associated with returned checks, with some participants suggesting that customers should be responsible for these fees while others express uncertainty about how to approach the situation.

Contextual Notes

Participants share personal experiences and local laws that may influence their handling of returned checks, highlighting the variability in bank fees and legal requirements across different states.

Who May Find This Useful

Consultants dealing with similar issues related to returned checks and bank fees may find the shared experiences and insights helpful in navigating their own situations.

linojackie
linojackie
Messages
492
I had a customer's check come back last week for the first time. My bank charged me $12 for the returned check AND $33 because it caused my account to go overdrawn. Apparently she had her checks stolen and had to close the account and she thought I had already deposited it.

Does anyone know the rules and or procedures on this? I looked on the back of our receipt and there is nothing about returned checks. I would think that PC would put something on their to protect us. I feel the lady should at least have to pay the $12 fee, but I don't want to call her and she tells me "well there was nothing in writing regarding returned checks" or something like that. Any advice is appreciated.
 
check w/your local gov't b/c here in Arkansas it is law they have to pay fees for a returned check & if it has to be collected by them then there are more fees added to it.
 
linojackie said:
I had a customer's check come back last week for the first time. My bank charged me $12 for the returned check AND $33 because it caused my account to go overdrawn. Apparently she had her checks stolen and had to close the account and she thought I had already deposited it.

Does anyone know the rules and or procedures on this? I looked on the back of our receipt and there is nothing about returned checks. I would think that PC would put something on their to protect us. I feel the lady should at least have to pay the $12 fee, but I don't want to call her and she tells me "well there was nothing in writing regarding returned checks" or something like that. Any advice is appreciated.
Click to expand...


I found this on a website for California and it states:

The Cashiers Office will notify and bill you if your check is returned by the bank for non-payment. The University of California, as the recipient of a returned check, is allowed to charge $25.00 for the first returned check and $35.00 for each subsequent check. After the third returned check, payment must be made by cash, cashier’s check or money order. (According to Section 1719 of The California Civil Code.)

So every state has some sort of a code or law in regards to this. It applies to our businesses even if we don't have something in writing to show them. You can always type something up and send it to her. It is a criminal matter. Not that you would say that but any business can enforce this, so we can too. We can actually add any fee we want to cover our expenses for this, or amounts that we were charged by our bank. As far as your overdraft amount, that is not really her fault. But the fee the bank charged you plus the amount of the check is fair and what she should pay. Some places charge $35, my bank charges $25. So hope this helps!

Debbie :chef:
 
I just had a returned check today too...:mad::cry: luckily my bank only charges $5... wonder if I can charge her gas on top of that since she lives about 30 miles from me and I just know she's gonna make me drive out there (for the third time!) to get payment! Trust me it's gonna be guaranteed funds or cash! UNLUCKILY, it was the host's check and she already has her order!
 
LBurke said:
I just had a returned check today too...:mad::cry: luckily my bank only charges $5... wonder if I can charge her gas on top of that since she lives about 30 miles from me and I just know she's gonna make me drive out there (for the third time!) to get payment! Trust me it's gonna be guaranteed funds or cash! UNLUCKILY, it was the host's check and she already has her order!
Click to expand...

You can ask her for a credit card over the phone and call HO to do a "Change payemnt"
 
  • Thread starter
  • #6
Well, I called her today and didn't receive a phone call back. I'm giving her the benefit of the doubt, and hoping maybe she's just on vacation, but something tells me this is not going to be a pleasant experience! On the plus side, the host agreed not to deliver her order until this has been resolved.
 

Frequently Asked Questions

What is a returned check, and why does it happen?

A returned check occurs when a bank refuses to process a check due to insufficient funds in the payer's account, a closed account, or other issues. This can happen for various reasons, such as the payer not having enough money to cover the check amount or errors in the account information provided.

What bank fees are associated with returned checks?

When a check is returned, both the payer and the payee may incur bank fees. The payer typically faces a non-sufficient funds (NSF) fee from their bank, while the payee may also be charged a fee for the returned check by their bank. These fees can vary by institution but can be significant, often ranging from $25 to $40 or more.

How can I protect my business from the impact of returned checks?

To protect your business, consider implementing a few strategies: require payment in cash or credit card for transactions, screen customers by checking their payment history, and establish a clear policy regarding returned checks, including potential fees. Additionally, using electronic payment methods can reduce the risk of returned checks.

What should I do if I receive a returned check?

If you receive a returned check, first contact the payer to inform them of the issue. You may request an alternative form of payment to cover the amount of the check and any associated fees. Document the incident and consider following up with a formal notice if the payment is not resolved promptly.

Can I charge a fee for a returned check?

Yes, many businesses charge a fee for returned checks to cover the costs incurred. However, it’s essential to ensure that your fee complies with state laws and is clearly communicated in your payment policy. Always inform customers beforehand about any fees associated with returned checks.

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