Urgent! What Are Your Returned Check Policies!

Business By sweetlayers Updated 28 Oct 2010 , 7:06pm by sweetlayers

sweetlayers Posted 18 Oct 2010 , 5:31pm
post #1 of 46

When a client's check gets returned what steps do you take to get your money and fees? I need to implement a new policy PRONTO!

1. How and when do you let the client know?

2. What fees do you associate with the nsf check?

Anything else will be helpful.

PS. This wedding was Saturday. Check was deposited on Wed. However, I was so busy making cakes, I never checked to see if the stupid thing cleared. icon_mad.gif I am so PISSED right now. Things always go wrong when I get laxed on the rules.

SOB! SOB!

45 replies
cakesbycathy Posted 18 Oct 2010 , 5:38pm
post #2 of 46

First, for me, wedding cake checks are due 30 days before the reception in case something like this happens.

I charge a $30 fee for NSF checks and tell them the entire amount is now due in cash. They have 48 hours to bring it to me or NO cake.

Since it sounds like the cake is already done...get on the phone with the client and tell them they need to bring you the amount of the check in cash and the money to cover the NSF fee or that you will have to report them to the police for fraud. If you can't get a hold of them by phone send a certified letter.

Sorry you have to go thru this. What a pain.

jason_kraft Posted 18 Oct 2010 , 5:39pm
post #3 of 46

We've had one customer's check bounce in 2+ years. I contacted the customer, they apologized and sent out a cashier's check for the order total plus $20 (the NSF fee was $10).

I would definitely start out with a polite conversation before making threats, since you don't know if this was just a mistake or malicious intent.

Before I heard back from the customer, I called the customer's bank and they said they were able to place a hold for the amount of the check on the customer's account (for a fee) so I could cash the bounced check without worry, it never came to that though.

all4cake Posted 18 Oct 2010 , 5:54pm
post #4 of 46

Just a bit of info...you can add the associated fees for that check's activity (not for any fee its' bouncing incurred on other transactions) (if your bank charges you a fee or fees when a deposit bounces, use that as a returned check fee) but, to keep one from denying the returned check fee(s), it should be posted for anyone writing a check to your business can see (it may cost them more to fight the returned check charge but they may be in a mood just to make a point)...post it wherever your pricing and/or accepted forms of payment are listed.

CWR41 Posted 18 Oct 2010 , 6:06pm
post #5 of 46

Just drop off the bad check to your prosecuting attorney's office, and let them handle it. They can arrest or threaten to arrest which normally gets a quick response from the person writing the bad checks.

jason_kraft Posted 18 Oct 2010 , 6:11pm
post #6 of 46
Quote:
Originally Posted by CWR41

Just drop off the bad check to your prosecuting attorney's office, and let them handle it. They can arrest or threaten to arrest which normally gets a quick response from the person writing the bad checks.



That might be appropriate if you can't get in touch with the customer after a reasonable amount of time, but I certainly wouldn't start with that. If the customer bounced the check by mistake and you start out making threats, you can be sure they won't do business with you in the future.

sweetlayers Posted 18 Oct 2010 , 6:21pm
post #7 of 46

Thanks everyone. I know they are on their honeymoon. Is it bad manners to call them on their cellphone?

CWR41 Posted 18 Oct 2010 , 6:55pm
post #8 of 46
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by CWR41

Just drop off the bad check to your prosecuting attorney's office, and let them handle it. They can arrest or threaten to arrest which normally gets a quick response from the person writing the bad checks.


That might be appropriate if you can't get in touch with the customer after a reasonable amount of time, but I certainly wouldn't start with that. If the customer bounced the check by mistake and you start out making threats, you can be sure they won't do business with you in the future.




No, you certainly don't start out with that... the bank typically runs it through three times--after that, it's denied and stamped all over that you may not run it through again. At that point, the bank customer already knows they wrote a bad check because they're notified by their bank with the applicable fees, so there's no point to tell them. It's up to them to make it right. If it was an honest mistake, they'll contact you.

There's no need to make threats... it's not your job. Let the authorities handle it. I don't want future business from people who don't pay--only those that can afford it.

matthewkyrankelly Posted 18 Oct 2010 , 7:16pm
post #9 of 46

FYI - If the check came back, you might be able to try to cash it again.

However, this time, go to the bank the check was written on and see if there is enough in the account. If there is, cash it.

I once knew someone who found out that an account was $50 short of the check that was written (for almost $1000). They deposited $50 in the person's account. Got back in line and went to another teller and there was magically enough to withdraw! The person was very upset that their "bad" check got cashed.

jason_kraft Posted 18 Oct 2010 , 7:21pm
post #10 of 46
Quote:
Originally Posted by CWR41

I don't want future business from people who don't pay--only those that can afford it.



I certainly don't mind future business from people who bounce checks...of course, they would need to pay up-front in cash.

Quote:
Quote:

the bank typically runs it through three times--after that, it's denied and stamped all over that you may not run it through again.



That hasn't been my experience...when I got the bounced check back, my credit union said I could try to cash it again.

Quote:
Quote:

At that point, the bank customer already knows they wrote a bad check because they're notified by their bank with the applicable fees, so there's no point to tell them.



If the customer bounced a check, they probably aren't too diligent about checking their bank statements for fees, so they might not even be aware of it.

jason_kraft Posted 18 Oct 2010 , 7:21pm
post #11 of 46
Quote:
Originally Posted by sweetlayers

Thanks everyone. I know they are on their honeymoon. Is it bad manners to call them on their cellphone?



They probably won't be able to do anything about it until they get back anyway, so personally I would wait.

costumeczar Posted 18 Oct 2010 , 7:46pm
post #12 of 46
Quote:
Originally Posted by matthewkyrankelly

FYI - If the check came back, you might be able to try to cash it again.

However, this time, go to the bank the check was written on and see if there is enough in the account. If there is, cash it.

I once knew someone who found out that an account was $50 short of the check that was written (for almost $1000). They deposited $50 in the person's account. Got back in line and went to another teller and there was magically enough to withdraw! The person was very upset that their "bad" check got cashed.




Oh, that's a gem!

CWR41 Posted 18 Oct 2010 , 8:01pm
post #13 of 46
Quote:
Originally Posted by jasonkraft

I certainly don't mind future business from people who bounce checks...of course, they would need to pay up-front in cash.


Me neither... I'd rather receive a bad check than no payment at all from a deadbeat because then you've got 'em (it's illegal) and there's nothing you can do to make someone pay, but a bad check is better than nothing since the Prosecuting Attorney can do something with it.

Quote:
Originally Posted by jasonkraft

That hasn't been my experience...when I got the bounced check back, my credit union said I could try to cash it again.


Yes, up to three times. (you can do it, or some banks do it for you.)

Quote:
Originally Posted by jasonkraft

If the customer bounced a check, they probably aren't too diligent about checking their bank statements for fees, so they might not even be aware of it.


They are notified right away, not whenever their regular statement occurs.

daltonam Posted 18 Oct 2010 , 8:14pm
post #14 of 46

My parents deal with this all the time in business (well thankfully not ALL THE TIME!). First the phone is picked up & they (the customers) are called. After that & most of the time the same day a certified letter goes out from their office notifying the customer. If it can't be handled this way within the stated amount of time it is then sent to the State's Attorney's office to handle.

On a personal note, I do believe each bank is different, but I'm guessing that all banks mail a letter to the account holder informing them of a bad check & a NSF charge on their acct. (for this customer it may be irrelevant as they may have been too busy to check the mail & are now on their honeymoon)

As for calling them on their honeymoon, I would if the amount is significant or it caused you to have checks/transactions returned. If it was a honest mistake & they have the money, they'll figure something out to get it to you. If not then you'll know to go ahead with turning the check over to the authorities.

edited for typo

awatterson Posted 18 Oct 2010 , 8:31pm
post #15 of 46

I wouldn't worry about feeling rude and calling them on their honeymoon. They were rude to write a bad check. Let us know what happens.

indydebi Posted 18 Oct 2010 , 8:39pm
post #16 of 46

I had maybe 3 or 4 bounced checks. Only 1 turned into a problem. wiht the others, I called or emailed them (yes, couples DO check their email on their honeymoon!) and just let them know "Hey, I got your check back from the back. I'm sure there's some snafu somewhere along the line, so if you could let me know how you want me to handle this. There's a $25 bounced check fee you'll need to cover. Give me a call. thanks!"

One bride had a special account set up for her wedding expenses and she closed it, thinking all checks had cleared. Got the pymt right away.

One bride's dad had written the check on the wrong account (they had just changed banks). big apology and payment right away.

My banks didn't run it thru three times (and if they did and charged me 3 bounced check fees, I would be more than PI$$ED!) I also never just tried to cash it for the simple fact that the checks were made out to my business and checks made out to a business must be deposited and not cashed, so that was never an option for me.

I nice call to let them know is always the first step. Not everyone is a slug and sometimes things just slip thru the cracks. I'd definitely give them the opportunity to make it right.

if they dont' respond .... THEN you slap it on the prosecutor's desk! icon_twisted.gif

CWR41 Posted 18 Oct 2010 , 8:47pm
post #17 of 46
Quote:
Originally Posted by indydebi

My banks didn't run it thru three times (and if they did and charged me 3 bounced check fees, I would be more than PI$$ED!)




The fee only applies once to the person who wrote the bad check.

If the bank doesn't automatically run it through three times, and it's your responsibility to try, they'll usually suggest that you try to catch it on a pay day.

indydebi Posted 18 Oct 2010 , 8:52pm
post #18 of 46
Quote:
Originally Posted by CWR41

Quote:
Originally Posted by indydebi

My banks didn't run it thru three times (and if they did and charged me 3 bounced check fees, I would be more than PI$$ED!)



The fee only applies once to the person who wrote the bad check.

If the bank doesn't automatically run it through three times, and it's your responsibility to try, they'll usually suggest that you try to catch it on a pay day.


disagreeing here. The fee is applied to MY checking accoutn when a check bounces. Yes, I pass the cost on to the client, but it's assessed on MY account. And I don't want it run thru 3 times. I want to be notified right away so I'm not writing checks based on that deposit and so *I* can contact the client and get it handled.

(Hubby was in bank mgmt for 25 years.)

MamaD77 Posted 18 Oct 2010 , 8:57pm
post #19 of 46

It could just be a mistake on the part of the customer. I know that when I got married, there were so many outgoings of money from different people and different bank accounts, (my parents, his parents, and bride&groom),
that it was very difficult to keep track of what went out and when. It's a very stressful and busy time!

(Obviously with hindsight we should have all put money in to one account, and taken the funds from there, lesson learned! I'll not get the benefit of that hidsight for many years until one of my kids get married icon_lol.gif )

So it may just be that your customer had lost track of things and it's an honest mistake. So I would say, tread carefully with them initially, until you suss out their position.

In future I would definitely get it in the contract that checks need to be handed over 4 weeks in advance of event.

I hope you get a successful outcome with this. Lots of luck.

CutiePieCakes-Ontario Posted 18 Oct 2010 , 9:01pm
post #20 of 46

Many years ago, I was involved in a home party company. One customer paid me by cheque - fully aware it wouldn`t go thru (as I found out later as she had pulled this on another consultant). When it came back, I first tried to get the money from her. She said she`d leave me the cash at her apt. When I arrived, she wasn`t home, but her invalid mother was. And, of course, she left no money.

Next, I went to her bank and was informed she had numerous bounced cheques. I guess my pathetic look fell on sympathetic eyes - the teller told me to come back on Friday and get the money before her rent cheque went thru on Monday - so I did. I really didn`t care if her rent cheque bounced.

***
Also, on the rare occasions that I have bounced a cheque, my bank has not informed me via letter. Unless you check online, you don`t find out until you get your statement. I check my account online regularly - this is how I find out. BTW: My bank charges $45 per bounced cheque. Welcome to Canada!

daltonam Posted 18 Oct 2010 , 9:03pm
post #21 of 46
Quote:
Originally Posted by indydebi

Quote:
Originally Posted by CWR41

Quote:
Originally Posted by indydebi

My banks didn't run it thru three times (and if they did and charged me 3 bounced check fees, I would be more than PI$$ED!)



The fee only applies once to the person who wrote the bad check.

If the bank doesn't automatically run it through three times, and it's your responsibility to try, they'll usually suggest that you try to catch it on a pay day.

disagreeing here. The fee is applied to MY checking accoutn when a check bounces. Yes, I pass the cost on to the client, but it's assessed on MY account. And I don't want it run thru 3 times. I want to be notified right away so I'm not writing checks based on that deposit and so *I* can contact the client and get it handled.

(Hubby was in bank mgmt for 25 years.)





My bank also charged me, it was called a return deposit fee. I then turned around & told the customer (this wasn't cake related) that they could pay me for ALL charges the their returned check caused me! They did, wired me the money in full. (& it cost them too--my bank was also very helpful in writing them a letter to prove all the problems they had caused)

daltonam Posted 18 Oct 2010 , 9:09pm
post #22 of 46
Quote:
Originally Posted by CutiePieCakes-Ontario

Also, on the rare occasions that I have bounced a cheque, my bank has not informed me via letter. Unless you check online, you don`t find out until you get your statement. I check my account online regularly - this is how I find out. BTW: My bank charges $45 per bounced cheque. Welcome to Canada!




OH WOW, my bank does, the only problem is I bank out of state so if that was to ever happen to me it'd take DAYS to get the letter, LOL! OH & I LOVE online banking icon_biggrin.gif. I just got a notice from my bank that they were changing their fees, NSF is now $35.00 at that bank, so I'll stay here in the USA for now--heehee, even if hubby wants to move to Canada icon_smile.gif

mandymomof3 Posted 18 Oct 2010 , 9:17pm
post #23 of 46

As someone who just bounced a check for the first time in my life due to my daycare holding and cashing 3 weeks worth of checks at the same time (and me not realizing that the last 2 weeks hadn't been cashed yet) I would call them first - and yes on their honeymoon - and it may be something as simple as the order of how funds went in and out of the account. I was so embarrassed and called daycare right away after it happened and it was fixed right away. They may have no idea that this happened and may be horrified to find out and get it fixed for you. If not, then you sick the attorneys on them. icon_smile.gif

cakesbycathy Posted 18 Oct 2010 , 9:22pm
post #24 of 46
Quote:
Originally Posted by jasonkraft

That hasn't been my experience...when I got the bounced check back, my credit union said I could try to cash it again.




Does a credit union operate differently than a regular bank when it comes to NSF checks?

CWR41 Posted 18 Oct 2010 , 9:25pm
post #25 of 46
Quote:
Originally Posted by indydebi

disagreeing here. The fee is applied to MY checking accoutn when a check bounces. Yes, I pass the cost on to the client, but it's assessed on MY account.




Agree. One fee...perhaps, three fees...no.

3GCakes Posted 18 Oct 2010 , 9:58pm
post #26 of 46
Quote:
Originally Posted by cakesbycathy

Quote:
Originally Posted by jasonkraft

That hasn't been my experience...when I got the bounced check back, my credit union said I could try to cash it again.



Does a credit union operate differently than a regular bank when it comes to NSF checks?




It's possible. Credit Unions do all kinds of things differently than regular banks. It's one of the reasons I bank with a credit union and not a bank...even though I worked in banking for 10 years. (Collections at that).

When we got bounced checks from customers, we'd put them through until their bank literally punched enough holes in them that you couldn't read the account number printed on it anymore. Could be 3 times, could've been 10. Good times, good times.

indydebi Posted 18 Oct 2010 , 10:06pm
post #27 of 46
Quote:
Originally Posted by 3GCakes

(Collections at that).


ewwww! hubby was in collections .... repo man!..... for 6 months. Said it was the longest 5 years of his life! icon_lol.gif

3GCakes Posted 18 Oct 2010 , 10:11pm
post #28 of 46
Quote:
Originally Posted by indydebi

Quote:
Originally Posted by 3GCakes

(Collections at that).

ewwww! hubby was in collections .... repo man!..... for 6 months. Said it was the longest 5 years of his life! icon_lol.gif




We used to say that if you last atleast a year, you're in it for life. After being a stay-at-home mom for 5 years (part-time cake teacher) it's probably the only full time job I could ever get again!

sweetlayers Posted 19 Oct 2010 , 4:37pm
post #29 of 46

Because it is a business account, I don't get the checks back. (I think indydebi said that earlier), so I am assessed the fee and never physically get the check back.

Kiddiekakes Posted 19 Oct 2010 , 4:51pm
post #30 of 46

I had this happen for the first time in 6 years in July.It was for $500.00 so I was very upset.I called the client who was out of town but did get back to me.I stated I needed a certified bank cheque or money order for the bounced amount plus $35.00 NSF fee that I do state on my website.After a few days and numerous emails I finally did get paid.I have done a few more cakes for this client who now knows..I accept CASH only from them from now on....I think you can try and re-process the cheque again if the code was funds not available but when it comes back NSF which is non sufficient funds...you can't...not sure though the banking laws are different here in Canada...I know that one time our insurance company tried to direct debit our account and on that day there wasn't enough money so they just tried again the next day after we put more money in and then it processed through but not sure if that is the same thing or not..Don't quote me on it though.... icon_wink.gificon_wink.gif

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