With the rise of credit cards, debit cards, e-payment systems, and other methods of payments, some would think that checks are a thing of the past.
But that is far from the truth. Checks account for 20 percent or more of the total payments made to businesses for goods and services every year.
A 2013 study by the Federal Reserve Payments revealed that payments made by checks accounted for 21 percent of all payments made. This amounted to 18.3 billion checks written, valued at 26 trillion dollars. With these numbers, anyone thinking that checks are extinct is mistaken.
While it is true that the usage of checks is slowly declining, no one should think that they are insignificant when it comes to payments. The value and usage of checks is likely to remain the same going into the future.
The best thing is that you don’t necessarily have to visit banks to buy more checks, you can order from online printers where you can get online checks at discounted prices.
But accepting checks does not come without some potential dangers. This includes the possibility of someone writing a bad check or even fraud. You can also have a bad check if the person who wrote you the check does not have enough funds in their account.
Dealing with bad checks can be a painful experience. Luckily, you can avoid bad checks by doing the following.
Watch While They Sign
If you are used to receiving checks without checking the signature, I would suggest you stop. One of the ways you can tell whether you are about to receive a bad check is if the signature on the check is different from the one on the ID.
You’ll surely not want to receive a check from the wrong person. The only way to tell whether you are dealing with a genuine person is to watch while your customers sign the check.
If it’s possible, insist that all checks be signed at your place.
Verify ID
While this may sound obvious, some businesses don’t pay much attention to it.
You should verify the identification of the person writing the check to confirm that he/she is indeed the owner of the account.
Also, confirm the address on the ID to see whether it is the same as the one written on the check. However, if the address does not match, don’t conclude that that the check is bad. But this and other issues is an indication that there might be a problem.
Watch Out Check with Low Numbers
This is especially important when dealing with a new account. To determine whether an account is new, look at the check number. If the check has a low number, it means it is the 1st checkbook for that account.
But knowing this, some account holders can ask checks at a higher number. So again you need to be extra cautious.
Verify the Authenticity of the Check
With the advancement in technology, anyone with skills can decide to print a check. Take a closer look at checks to determine whether they were printed by reputable check printers or fraudsters.
Reputable check printers have a way to cut the edges cleanly and square. Also, look at the security features on the check and any signs of tampering such as wear.
Install Cameras
Having cameras at your place of sale is a great way to weed out fraudsters. Individuals writing bad checks, forgery, and fraud would not want their photos taken. Therefore, placing a video camera in conspicuous places will deter dishonest people from visiting your place.
Establish a Bad-Check Policy
You can also decide to post a bad-check policy where you can warn your customers against writing a bad check. Let them know of the fines and penalties that await them if they write a bouncing check.
The best way to prevent your business against bad checks is to come up with a policy before bad checks come your way. Decide the procedures that your company should follow in case of a bad check and let your staff know what to do.
Hook Up with a Check Verification Bureau
This is another great way to get rid of bad checks. When you use the check verification bureau, you can receive checks from anywhere in the US without fear.
They offer guarantee for checks and also goes for bad check writers.
The downside of using this service is that it will cost you some money. Also, you may lose a customer because they go aggressively after bad check writers.