How to deal with bad checks?

may i suggest you give them resized down copies of pics with your watermark plastered all over the picture?

when the check clears, and you ahve the funds, they can get resized or originals w/o you watermark plastered on the image!?!

I spent several years in banking, and had a customer in another business that was forced to take hundreds of checks for $10-$20 a month. After going through the machinations of bad checks, debtor calls (no fun), collection agencies, etc, he finally hit on a solution that worked for him.

1) On his solicitations, he indicated that he accepted cash and checks from several local banks. The banks were listed by name.

2) At payment, he accepted only those checks from those banks, all local.

3) The next day, he batched the checks by bank, and drove to each one. He had selected the banks based on a route system. He could hit branches of these 8 banks in an hour.

4) He would go into the bank branch with the checks written on that bank, and exchange them for an official bank check in bulk. The bad ones were identified immediately, and didn't cost him a dime -- the teller just handed them back to them. The official check cost him a $1 sometimes -- other banks didn't charge him a thing.

5) He then would come to my branch with the 8 official checks, and deposit those. Funds were available immediately, and there were no surprises.

6) He then called the customers who bounced the checks, letting them know that the checks were not good. As a courtesy, he had arranged with their banks for them not to be charged an overdraft fee -- clever, but that the checks would be redeposited the next business day. If they were not good, they would not receive their order.

7) 2 Days later, he made the rounds again. Most were now good -- a few weren't. The bad ones he mailed back to the customer, again explaining that no fees had been charged, but that payment was not received and he would not be providing promised goods.


Although it meant a little front end hassle, he estimated it saved him about 3 hours a week, and about $300 a month in fees, even after factoring in gas! He also said his incomplete order rate went way down.

PLUS -- when he was ready to expand his business, he know lots of bankers -- never a bad thing.

Call him/her up and tell him/her either pay up or you will report to the police as fraud. It will cost him/her more than whatever it is; not to mention bad credits

gpswiz wrote in post #7644912
Call him/her up and tell him/her either pay up or you will report to the police as fraud. It will cost him/her more than whatever it is; not to mention bad credits

It's obvious you have not done this very much.

gpswiz wrote in post #7644912
Call him/her up and tell him/her either pay up or you will report to the police as fraud. It will cost him/her more than whatever it is; not to mention bad credits

Yes, it is wise to remember that your relationship with the contractor (league or whatnot) isn't helped by complaints from parents who feel you are heavy handed. Most bad checks are simply errors.

I'm a county treasurer and I handle about 30,000 checks each year. I'll attempt to separate the grain from the chaff here. The good advice already given includes the following:

1) Contact the person immediately, and be polite. If it's simply a mistake (and it usually is), this is your chance to either create a loyal customer through your professionalism or create a lot of bad karma by being a jerk.
2) Understand that the laws do vary by state, so call your District Attorney (County Attorney, State's Attorney) for guidance. Most jurisdictions do prosecute this as a criminal offense, but you need to handle it properly.
3) If you want to add an extra charge beyond actual bank charges on returned checks, some states require you to notify customers in advance. A clear statement to that effect on your invoice/order form should suffice, but refer to #2 above.

Another thread: Anyone ever have any problems with payment?

Sidnye wrote in post #7644724
Yes--report to the police/sherriff. They are the gatekeepers. From there it goes to the DA if it warrents prosecution---and most do not, unless as I said it is a serial bad check writer.

I'm just saying that those who think the DA will come out guns ablazing will be disapointed.

It depends on where you live. Where I live, bouncing a single check will without fail result in a warrant for your arrest and you will be locked up until you you provide bail -- at least if the debtor reports it to the police. The county sheriff is quite proud of this fact and even mentions it on their official website.

I call them and give them every opportunity to make good on the payment. If they balk at that...I send them two official letters within the allotted time periods. If I don't hear anything back it is pretty positive indication they aren't going to pay. I'll then stop by the local magistrates office and pick up the complaint form...fill it out and file criminal charges on them. Then they are scheduled for a hearing and they have to plead guilty or not guilty and prove it.

I've only had 4 instances with this....two settled with me and I had to appear at 2 hearings. I received payment in full plus any fees I incurred such as constable fees to serve papers etc.

It might seem like overkill but I have to play by the rules....so do my customers. If they come to me and say times are tough I can cut some people a break and I've already waived my fees. Screw me over and it's a battle. Here in PA., it's basically ZERO tolerance for bad checks. The last one I had....the judge made the offender leave the court....drive 20 miles each way to his bank to get the money in cash to pay me because the judge wouldn't let him pay with another check.

There are check recovery companies out there that handle the work for you. They will monitor the offending party's account and once the money is in there, you get your money. They will charge the maximum fee allowed by law, plus a service fee. That is paid for by the offending party. I talked to one while at ImagingUSA that is local to me. I have not signed up for their service, as I've only had one write a bad check and I handled that personally and it was resolved without incident. Once someone writes me a bad check, they are a cash or major credit card (not debit card) customer from then on. If you have a business account set up at your bank (and you should), then see if the bank has a service available to recover bad checks from customers.

In cases where I am dealing with team or groups I try to make the dealings with the group only and avoid having to deal with the individual parents. This puts the onus on the group to make good on the check and they have much more pull on making sure that the it is good, they can simply say your child doesn't participate until you make good.

In all my years of taking this payment I have only had one that bounced back to me. I have a sign that says returned checks will have a 20.00 handling fee attached to it and the person paid it without complaint. In most cases people feel bad about having this happen and do want to make sure that their name gets cleared. As someone said earlier when dealing with sports teams or youth groups it is just not possible to not take checks. I certainly don't the parents sending an envelope with cash in it.

Unless you are talking about large sums is it really worth the effort to go to the police and/or small claims. This is business and sometimes you get burned. My accountant always checks with me each tax season to see if I had uncollected debts as he says it can be used as a write-off in our taxes (Canada).

Here's how I would deal with checks:

1. Upon receipt, if possible, discretely, call the phone number of the bank listed on the check. Talk to Customer Service Dept & ask to verify funds on an account. Of course the bank will not give you personal info on the account but you can ask them if there's sufficient funds on the account #12345 in the name of ABC to cover the amount that is written on the check. Most banks should be able to tell you if the check amount is any good. If the bank says there's insufficient funds, do not accept the check from the customer but politely ask for other forms of payment.

2. in the event that a check has been accepted without verification from step 1, prior to depositing, call the bank to verify funds as in step 1. If there's sufficient funds & the bank is not too far, just go and cash the check or deposit it to your own account.

3. If after following steps 1 & 2, you still have a bounced check, as soon as you receive the NSF check back from your bank, call the customer's bank listed on the check. Ask to speak to Customer Service. Go through step 1. If on the day that you call the account has the funds to cover the check, proceed immediately to the bank to attempt to cash it before others. If the account still does not have sufficient funds, call the following day early in the morning, repeat step 1. An NSF check can be redeposited so hold on to it until you get paid. Perhaps you may need to wait until the next pay day.

Find out what day(s) of the month SS and unemployment get put into the bank. Show up at their bank on those days and attempt to cash the check.

The procedures recommended by the two posts above this will work fine for a photographer who places absolutely no value on his time, and who travels by bicycle.

I'm sorry but I do not travel by bicycle & I spoke as a former bank auditor. Customer service dept gets calls like that a lot of times when I worked at the bank. My apologies if it 's not helpful as return charges do add up..