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Bucaro TecHelp Newsletter
Maintain Your Computer and Use it More Effectively
to Design a Web Site and Make Money on the Web.
~ ~ ~ October 6, 2004 Volume 4 Number 35 ~ ~ ~
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What to do When You Receive a Bad Check
By Stephen Bucaro
As a small business operator, personal checks may be a method to receive payment
for your goods or services. As a way to receive payment, a personal check is actually
better than a credit card because the fees are lower and there can be no charge back.
Fortunately, most people are honest and studious in administering of their checking
account. But sooner or later every small business operator will receive a bad check.
The first thing to do is politely contact the individual and give them an opportunity
to make the check good.
Most times you'll find that the customer has simply been careless with their checking
account or finances. They will probably be embarrassed about the incident and will
immediately replace the bad check with a good one. Unfortunately, there are rare occasions
when the individual who passed the bad check makes themself scarce.
Note: If a personal check is for more than a few dollars, it's best to let the
check clear before delivering the product or service. Say, for example, that
someone wants to buy your car with a personal check for twice what the car's worth.
Remember, a check is just a piece of paper until after it clears. They can return
to pick up the car after the check clears, or you can offer to drive with the
individual to their bank to get the cash.
There are three reasons why a personal check may not clear: "insufficient funds",
"account closed", or "stop payment". The proper action to take depends upon why the
check didn't clear. If the check is returned for "insufficient funds", and you can't
locate the individual who wrote the check, file a crime report at your local police
station. If a police investigator can locate the individual who passed the bad check,
that individual will be required to pay you and/or spend some time behind bars.
If the check was returned "account closed", you may have a criminal case depending
upon when the account was closed. If the account was closed before the date the check
was written, you definitely have a criminal case. If the account was closed afer the
check was written, the court may determine that you didn't present the check for payment
in a timely manner. In that case, you have a civil matter, not a criminal complaint.
If the check was returned because of a "stop payment", you have a civil matter. Some
people try to save time and work by filing a crime report for ANY check that doesn't
clear. This can result in the individual who gave you the check being arrested. They
may miss work and encounter a host of other problems as a result of your FALSE crime report.
I said FALSE crime report, because an individual who puts a stop payment order on a
check almost always does so because of dissatisfaction with a product or service. The
accused individual is now in a position to countersue for damages caused as a result
of your false crime report. This could end up costing you a lot more than the value of
the check.
Sooner or later every small business operator will receive a bad check. The first thing
to do is politely contact the individual and give them the opportunity to make the check
good. If that doesn't work, many people try to save time and work by filing a crime
report regardless of why the check didn't clear. It's very important to take the proper
course of action depending upon the reason the check didn't clear.
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