What's the best way to recover bounced checks?

Question

Some people write checks when their accounts are empty. Some people write checks after their accounts are closed. Whether it's by accident or intentional it becomes a painful expense. What can small businesses do to recover those lost sales?

I know of some check recovery programs, but suspect the full amounts are not collected. What recovery programs have you had success with?

Answer 1

If a "bounced" check fits the criteria of a "Hot Check", your local Prosecuting Attorney will accept it for prosecution.

Bounced checks not defined as Hot Checks:
Payments on account.
Post dated checks.
Pre-paid deposits, if no product or service has been performed or delivered.

Hot Checks:
Any payment for products or services delivered or performed and paid by check "immediately" upon performance.
KEY WORD: Immediately.
If a delivery is made and not collected, COD, and a customer pays at any time, AFTERWARDS, Not a Hot Check This becomes an open account. See above.
A bad check is nothing more than a promissory note unless paid on delivery of products and services. This is a civil matter, not the Prosecutor.

Any amount of a Hot Check should be turned over for prosecution. Small amounts will not be prosecuted, but the Prosecutor will accumulate if there are more, and take action.

Answer 2

There are many private services that do collections - they usually take around 10 to 20% of the total that they collect. We have had mixed results from using those kinds of services.

Small claims is an expensive and time consuming way to go, and it only works if the person has money to collect from if you win.

You're usually better off using D&B to check your new client's records before you do business with them.

Answer 3

first of all you do not have to accept checks, check are almost obsolete use check cards or there is a company that scans the check and debit the account while they stand there, also what you need to do is keep trying to cash the check and for the ones where the account is close is report it to the police and take them to small claims court, if you have a collection take off a day and do them all

Answer 4

check with your local prosecuting attorney. i am in missouri and our local prosecuter even has a form for bad checks, they have so many days to bring in payment or a warrant is issued for their arrest...pretty convincing....we have very few problems and best of all no charge