Dealing with Bad Checks

There are principally two types of bad checks, the first and most common is an NSF (Non-Sufficient Funds) or as it is commonly referred to, a bounced check. NSF check recovery is a time-consuming and money-wasting task and with a small business often uneconomical. When a customer's bank account has insufficient funds to cover a purchase, the result can be a total loss. Sometimes it is cheaper to forgo collection and accept the loss rather than pursue the bad check.

The good news is that with today's technology and service providers, NSF check recovery today it is much more economical and easier to implement. The best payment solutions allow a merchant to monitor a bank account until funds become available, so that as soon as a delinquent check writer deposits funds into his or her account, the bank will transfer them to the merchant.

The second major type of bad check is a forged or counterfeit check most commonly referred to as a Fraudulent Check. The ability of an individual to pass a fraud check is more difficult now with the current technology and check verification services available. Fraudulent checks have always been a big problem for merchants. At one time, the access to the technology and verification services was only available to major companies.

Thanks to advancements in technology and the growing number of service providers, small business can protect themselves every bit as well as the major merchants. Choosing the right payment solutions company will allow you to utilize these new technological advancements.

No matter what size business you own, from a small home-based business to a large corporation, you can't afford to lose money. The money you save from avoiding bad checks can be passed on to your customers in the form of lower prices. They will appreciate this as well as the option of paying by check.

The three major services that are provided for check acceptance are Check Verification whereby the service provider authorizes that the customer has funds in their account at the moment of purchase and does not have a record of bouncing checks. While this does not guarantee that the check will not bounce, it does give far greater assurance. The second service is NSF Check Collection where, for a fee, the service provider will collect the bounced check for you. There are some service providers who offer this service free if charge with their check verification service. The third service is Check Guarantee where the service provider will verify a check and then guarantee payment should the check bounce. There is, of course, a higher fee for this service, but if you accept a lot of checks from customers you do not know, especially from folks who are out of town customers, this service can be well worth the extra fees. ECA, or electronic check acceptance is a great option as it reduces the checkout lines and can reduce fraud.

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