These check acceptance tips are provided from www.bumchecks.com, a full service collection agency for bad checks and accounts receivables collection.
1. Establish a check acceptance policy that requires I.D. such
as a driver's license (be sure to take the few extra seconds to actually
check the driver's license number with what is on the check). If
you later need the services of a collection agency, a service like
NorthStar can use a driver's license to put the check writer into the
NCN (National Check Network). As long as the check writer's
account information is in the NCN, he or she will not be able to pass
checks at any of the 150,000 or so merchants that verify checks against
the NCN. Agencies who use this additional collection tool (and
with NorthStar it
is a free service) increase the collection rate for
NSF checks.
2. Consider putting a dollar limit on checks, and do not allow exceptions to your stated policies.
3. Posting a "collection sticker" for NSF checks (NorthStar
supplies these for free) can be a deterrent to customers writing NSF
checks.
4. A check writer's name, addresses
and phone number should be printed on the check. Make sure
the written and numeral amounts correspond. Consider check writers
for a work phone.
5. Watch the check writer sign the check. If the name is
illegible, have the customer print the name below.
6. Compare the signature, photo and physical description of the ID
to the check writer.
7. Verify that the check writer's identification is still valid.
Check the driver's license for signs of alteration or modification.
8. Most returned checks have low check numbers (100 to 500).
In many instances a low check number indicates a new account and this
may be a risky check, particularly for business or "dba" (doing business
as) checks.
9. Other useful information on the check is the account's opening
date (month and year), usually indicated by four numbers to the side of
the account holder's name and address.
10. Do not accept second or third party checks. Use this
same policy for "pre" or "post" dated checks.
11. The four digits following the magnetic ink character
recognition (MICR) number at the bottom of the check should match the
four-digit number at the top right hand of the check.
12. All checks, except government checks, should have a
perforation along one side of the check.
13. Sometimes you can call the financial institution to confirm if
funds are available, though this is no guarantee the check will clear.
14. Modern technology allows dishonest people to create checks on computers. If a check looks fake, or the ink smears, insist on cash or a credit card.
15. You know this last one, but I am putting it here anyway. Establish a waiting period for refunds if a customer pays by check.
16. Decide in advance whether or not you will accept only "local checks."
17. Never feel embarrassed to ask a check writer for identification. Having a policy in writing and posted near the cash register allows you to simply point to your stated check acceptance policy.
18. Trust your instincts. I have had business owners tell me, "I didn't have a good feeling about a check writer" and the check was NSF. If you make a check acceptance policy sign, perhaps you would like to say "we reserve the right to request payment by cash or credit card."
19. Insure that a bank name and location are listed on the check. Fraud checks do not always contain this information.
20. Consider in advance whether or not you will allow customers to write a check for an amount above the amount of their bill/purchase.
21. Keep abreast of banks that close in your area. It goes without saying that someone trying to write a check from a closed bank will leave you with an uncollected check.
If you have additional check collection questions, please feel free to contact me (Brad Price). I am a national rep for NorthStar Technologies. You may reach me by e-mail or phone (574) 875-9994.
