if somebody makes a purchase from me with a check, is it possible for me to endorse and use it again myself?

Question

say somebody buys a cd player from me, for $100. they pay with a personal check. can i sign my name on the back of the check and in turn go make another purchase? then that person i give the check to endorse his/her name on it and use it, etc etc.

i heard something about this in econ today, but didnt have time to ask the teacher. how is this even possible/legal?

so when i sign the back of that check, what does that legally mean as far as me and my control with that check. i thought the only possibility was to take it to the bank to cash it?

Answer 1

Yes, you can do that, in theory.

But I doubt many people or business will actually take that check from you. They have no idea whether the check is good or how to track you down if it bounces.

Plus, it would be a pain for an individual to cash it. Many backs will not cash third party checks.

When you endorse the check, in theory anyone can cash it. But again, many banks won't do it since it's so easy to forge.

Answer 2

randy d and bb are both right.
you can endorse the check over to someone else, making it a two party check. That person can then deposit the check or try to endorse it over to someone else. Most people do not want a two party check also called a "third party check."

In the 19th century this happened a lot. There was not a lot of cash arround, so checks were common. Very big checks were a problem.

There was a story about a man who was given a check for a million pounds (british money) and who just showed it arround town and got credit from people. He could not endorse it, because no one in the smaller town where he went had that much money. He started a business and he ended up a rich business man. and gave the check back uncashed.

Answer 3

No one will let you use that check to make a purchase. Just go cash it and use cash for purchases.

Now, if your parents have a checking account, you can sign the back of the check you received, give it to them, and let them give you the cash from it and they can deposit it in their bank account. That is legal.

Answer 4

It's called third party endorsement - some places will take it, some will not. you are authorizing someone to use your check and signature as being valid. There is a limit of 2 endorsements - the person who the check is made out to, and the third party - cannot go on indefiniately.

Answer 5

NO! Who ever you give the check to after you endorse it is entitled to cash it. What you are talking about is fraud and doesn't make any sense. You can sign the check over to somebody to have it cashed but, you can't just keep signing it. Nobody would ever get there money!

Answer 6

That used to be done quite a bit. Banks don't really like it much anymore but if you can find someone willing to take it, it is still possible. It is much better business to take it to the bank and then make your purchase with your own check or money.

Answer 7

Used to be you could. We called it "two-party checks", but nowadays businesses and banks might not like it. I haven't tried to do that in decades since a lot of businesses put up signs saying they would not accept two-party checks. God Bless you.

Answer 8

one new check for each transaction......no recycling!