Does anyone accept checks for payment anymore? Actually, yes. Whether or not they are “old school” handwritten checks or checks processed online, the check is still a very common method of payment, especially for small business customers.
Certainly some bad checks are clearly errors, while others may be a deliberate attempt to defraud. Here are some things to remember:
- Get to know the laws in your city and state regarding bad checks. Start with the police department where your business is located. The local police will likely be able to give you a great deal of information.
- Once you know the law, give the customer the appropriate notice and opportunity to make good on the check. It is very important that your notice be in compliance with bad check laws. Various state laws require giving the check writer a certain number of days, call for certain language or necessitate the use of certified mail.
- Your ability to recover bank fees or other costs will also depend on the law. Know what you can or cannot demand.
- Partial payment of a bad check amount may not be a good option and may hinder your ability to recoup your money. Again, know the law.
- Don’t delay! Deal with bad checks right away. If you wait, certain remedies may not be available to you.
- Once your customer has settled the bad check, do not take any more personal checks from the. Set up a payment plan requiring an automatic credit/debit payments or ask for certified funds.
- If you submit a debt to your collection agency, make sure that you let the agency know that the debt involves payment by bad check.
Every business, even businesses that do not extend credit, can run the risk of being stuck with a bad check. The important thing is to have a procedure to deal with them, and a way to recover the money owed to you as soon as possible.
Have you ever been stuck with a bad check? What did you do?
Want some more tips to minimize bad debt in your business? We have them!
