Bad Checks

When a bad check is passed in our community, the cost is far reaching. Thousands of dollars are lost each year by merchants who accept bad checks. As a result, consumers face higher prices to offset the cost of bad checks.  Inreased tax dollars must be spent for law enforcement to investigate and prosecute offenders.

The best way to reduce your losses and minimize the negative impact is to avoid accepting a bad check from the start. The following tips are suggestions to help you establish good procedures for accepting checks.

 

Policy
DO
develop a check acceptance policy for your employees and customers. Your policy should state the types of checks that will and will not be accepted by you.

Identity
DO NOT
accept a check without first confirming the identity of the person issuing the check. The best verification is a state issued photo ID that includes name, date of birth and description. When accepting a check, write the name, date of birth, and identification number on the check. The name of the employee who accepted the check should be listed on the check as well. This information will be critical in the event you receive a bad check and prosecution is required.

Address:
DO NOT
accept a check that does not contain the complete address of the issuer. Also obtain a phone number.

New Accounts:
DO NOT
accept checks written on new accounts. Nearly 85% of all bad checks are written on new accounts and bear check numbers between 101 and150.

Signature:
DO NOT
accept a check that has not be signed in your presence. For company checks, make certain the signature is legible.

Date:
DO NOT
accept a check that is not written for today’s date. Pre or Posted dated checks are typically difficult to prosecute

Amount:
DO NOT
cash a check when there is a discrepancy between the written amount and the amount stated in numbers.

 

Remember, you are not required to accept a check. If you are suspicious or uncomfortable with accepting the check, trust your instincts and demand another form of payment.