Writing Off a Bounced Check: What to Do

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Discussion Overview

The thread discusses various experiences and opinions regarding handling bounced checks from customers. Participants share their personal approaches to writing off losses, attempting to collect payments, and dealing with the emotional aspects of these situations.

Discussion Character

  • Anecdotal
  • Opinion-based
  • Exploratory

Main Points Raised

  • One participant asks about the possibility of writing off a bounced check as a loss.
  • Another participant shares their experience of including additional charges incurred from the bank and collection efforts in the write-off.
  • Several users mention that they find it worthwhile to attempt to collect on bounced checks, even for smaller amounts like $100.
  • One participant recounts a successful experience of contacting a customer who was embarrassed about the bounced check and paid immediately.
  • Another participant describes a lengthy collection process for a small bounced check, emphasizing persistence without harassment.
  • Some participants suggest contacting the local District Attorney's office for assistance in collecting on bounced checks.
  • One participant mentions the idea of asking the customer to host a show as an alternative to paying bounced check fees.
  • Several users discuss the practice of cashing checks before depositing them to avoid penalties from bounced checks.
  • One participant shares a positive experience with their credit union regarding handling insufficient funds checks.

Areas of Agreement / Disagreement

Views differ on the best approach to take when dealing with bounced checks, with some participants advocating for persistence in collection efforts while others express a preference for writing off smaller amounts as a loss. No clear consensus emerges on a single best practice.

Contextual Notes

Participants share personal anecdotes and experiences, reflecting a range of approaches and emotional responses to the challenges of handling bounced checks in their businesses.

Who May Find This Useful

Consultants who encounter bounced checks and are looking for insights from peers on how to handle such situations may find this discussion beneficial.

K
KirstenAnne
Silver Member
Messages
78
Quick question-Can you take a bounced check from a customer and write it off as a loss. Won't probably ever see the money, so I want to be able to write it off.
 
Of course! Don't forget to include in the write-off the charges that you incurred from your bank, phone charges to try collecting it, postage from your mailings to the customer and any mileage to and from the bank and post office!

If you want to try to collect, you can file a small claims suit, though. And in our state, we are able to collect 3x the amount of the check and charges....you may want to check that out, first!

Gotta love those NSFs, huh?:rolleyes:
 
  • Thread starter
  • #3
Thanks but with everything I have going now- Too much hassle- Was only $100.00
 
KirstenAnne said:
Thanks but with everything I have going now- Too much hassle- Was only $100.00
Click to expand...
Was only $100?? I would still be calling that one! If you have the check you can go to their bank and ask them to cash it (go when you think it's payday or the day after). If not, leave a message telling her you're contacting collections. It might make her do something!

I have had a few checks bounce and all but one was appauled that it happened and paid me in cash immediately. The one that didn't just never returned my calls. I still have the product so it wasn't a total loss. Anyone need a set of Stainless Steel Bowls at 22% off retail (my commission that month)... I know, I could have sent them back to PC but I didn't realize it at the time...
 
Did you call the person? I would think that $100 is worth trying to get! Knock on wood...I've only had this happen to me once. And I called the gal, & she was sooo embarassed because she had written a check out of the wrong checkbook; they had switched banks & wrote the check out of their closed account. She got me the money right away.I would call her first if you haven't!
 
You can take the bounced check to your local District Attorney's office. I would try several times before I give up on her. The DA will try several times too. He usually gets a piece of your check, but its better than nothing. But, if you have the products, I don't know if you can do anything. Basically its a no sale. But, you can send them back.
 
I had a lady bounce a check for $23. It took her a year to pay me and I had to send her a self addr stamped envelope to help ensure it would actually go in the mail!

Don't give up!! Just don't harrass either. I called this lady once every other month, left msgs, talked to her etc. It finally paid off.
 
I'd go after $100! Also, I'd make sure that she knows she also owes you for any penalty that you had to pay. It's worked for me (I've only had two bounce in 5 years). I request cash, a money order or bank check when they are paying me back.
 
You can also cash the checks before you deposit the money. My local bank teller (who was a great host) recommends this. She says if the check does bounce after you cash it, it's the checkwriter's fault and you don't get penalized for their mistake!
 
So do you cash all of the checks & then bring the money back later to deposit it into your account?
I used to have the guests write the checks to the host, but I don't want her to deal with bounced checks so now I'm having them write it to me.
 
I've had this happen a few times. The last time it happened, I kept calling the customer's bank to find out if there were sufficient funds to cover the check. After a few calls (she apparently never has money!), there was enough. I hurried to the bank and redeposited the check. I think you can only do this once on a check, so the key is to make sure there is enough money to cover it before you try the 2nd time. HTH!!

Marina
 
Wow, I'm so fortunate. My credit union called with a $14 insufficient funds check. They are checking several times a day and will deposit it as soon as the funds are available. No extra fee!

And the best is she asked if I could send her a catalog. I don't even know how she knows I sell Pampered Chef but will do it as soon as I get my supply order.
 
beepampered said:
Wow, I'm so fortunate. My credit union called with a $14 insufficient funds check. They are checking several times a day and will deposit it as soon as the funds are available. No extra fee!

And the best is she asked if I could send her a catalog. I don't even know how she knows I sell Pampered Chef but will do it as soon as I get my supply order.
Click to expand...

Credit Unions are nice to have. They really look out for you. A lot of them will at least. And, especially if they become your customers! ;)
 
Deffintaly go after your guest a $100.00 is nothing to spit at, contact the local DA office if you have to if your attepmts to contact her fail. I haven't had this problem yet, hopefully never will. Knock on wood !!
 
Maybe ask her to host a show in place of fees charged for the check; you really ought to come out ahead in this one. I used to do that in place of bounced checks or make a suggestion that they can either pay the fees or schedule a show immediately. Usually the show will earn much more than the bounched check fee and you'll have lots more guests/contacts in the future too :)
 
My last show in August I had TWO checks come back as NSF. One of them was a bank error, but the other one acted like it was my fault the check bounced. It all ended up fine, but it is a hassle.
 
Soothenrelax said:
Maybe ask her to host a show in place of fees charged for the check; you really ought to come out ahead in this one. I used to do that in place of bounced checks or make a suggestion that they can either pay the fees or schedule a show immediately. Usually the show will earn much more than the bounched check fee and you'll have lots more guests/contacts in the future too :)
Click to expand...
That is a really good idea never thought of that one.
 
I would just call her bank until there are sufficent funds in her account. I go and cash it out the minute she does.
That happened to me once. I called every week until her bank told me she had the funds to cover it. I went right away, got my cash! Unfortunately for her it was right before Christmas, but it was a large check and I had left tons of messages and emails and she would not pay me for three months! At least I got my money.
 

Frequently Asked Questions

What should I do first if I receive a bounced check?

The first step is to contact the person or business that issued the check. Politely inform them that the check has bounced and ask if they can provide an alternative payment method. It's important to maintain a professional tone to resolve the issue amicably.

Can I charge a fee for a bounced check?

Yes, you can charge a fee for a bounced check, but it must be reasonable and in accordance with state laws. Many states have specific regulations regarding the maximum amount you can charge, so be sure to check your local laws before imposing a fee.

How do I write off a bounced check in my accounting records?

To write off a bounced check, you should create a journal entry that removes the amount from your accounts receivable and records it as a loss. This typically involves debiting a bad debt expense account and crediting the accounts receivable account. Ensure to keep documentation of the bounced check for your records.

Is there a time limit for collecting on a bounced check?

Yes, there is usually a time limit, known as the statute of limitations, which varies by state. Typically, it ranges from three to six years. After this period, you may lose the legal right to collect the debt, so it's important to act promptly.

What if the issuer of the bounced check refuses to pay?

If the issuer refuses to pay, you may need to consider legal action, such as small claims court, depending on the amount involved. Before taking legal steps, it may be beneficial to send a formal demand letter outlining the amount owed and the consequences of non-payment.

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