Bounced Check From Customer, What Would You Do?
Decorating By luvscakes Updated 9 Dec 2006 , 6:04pm by luvscakes
Hi LAdies,
I am not legal yet, however have a small business from my home, word of mouth. I did a cake a couple of weeks ago for man who works with hubby, and he "kept forgetting" payment for a couple of days. When I finally recieved payment he also ordered a much larger cake. Becasue my cakes are the only thing keeping our family afloat right now I aksed ofr payment of the cake I had already made, along with full price of cake to come (due next week)
Today, I found out at least the smaller check had bounced and my bank has charged my account $10- leaving my checking account in the red. I am sure the larger amount will bounce as well. Leaving my account REALLY red.
What should I do? How do I approach this business- like? I will not do large cake next week without proper payment, but have already made purchases/(investments) for that cake. What about all the "extra" charges being charged to my account?
(HOW WAS I TO KNOW I ACCEPTED A BAD CHECK FROM THE GUY???!!) How is it legal for banks to Do that??
Anyway,
All that said, any advise would be appreciated!
Hi LAdies,
I am not legal yet, however have a small business from my home, word of mouth. I did a cake a couple of weeks ago for man who works with hubby, and he "kept forgetting" payment for a couple of days. When I finally recieved payment he also ordered a much larger cake. Becasue my cakes are the only thing keeping our family afloat right now I aksed ofr payment of the cake I had already made, along with full price of cake to come (due next week)
Today, I found out at least the smaller check had bounced and my bank has charged my account $10- leaving my checking account in the red. I am sure the larger amount will bounce as well. Leaving my account REALLY red.
What should I do? How do I approach this business- like? I will not do large cake next week without proper payment, but have already made purchases/(investments) for that cake. What about all the "extra" charges being charged to my account?
(HOW WAS I TO KNOW I ACCEPTED A BAD CHECK FROM THE GUY???!!) How is it legal for banks to Do that??
Anyway,
All that said, any advise would be appreciated!
I would go to the guy and explain that his check was returned (don't say bounced because it might throw gas on the fire) and now it will cost HIM the original amount of the check and the subsequent bank fees the bank attached to your account because of his mistake. I always see signs around town in businesses saying things like "there is an additional $10 fee for returned checks". And you are absolutely right to refuse to do his next cake until you are paid in full. I personally would insist on cash because of the deadline. Good luck and let us know how it turns out!!! 
So sorry to hear this happened to you... What I would do is, if you haven't deposit the second check, don't do it, and go to this person directly and tell them you need cash for both AND you need them to cover this fee the bank has charged you. I would also charge an extra fee for what this has caused you. Don't be afraid and go straight to the point with them. HTH and good luck with everything.
So sorry to hear this happened to you... What I would do is, if you haven't deposit the second check, don't do it, and go to this person directly and tell them you need cash for both AND you need them to cover this fee the back has charged you. I would also charge an extra fee for what this has caused you. Don't be afraid and go straight to the point with them. HTH and good luck with everything.
What's HTH??
Be careful that you cover yourself and put in more than enough to cover the checks you have written off that money. I work at a bank and it does not matter that it was a returned deposited item, it is your problem and they will bounce your checks. Other than insisting on cash only payment from customers, or money orders, if they insist on giving you a check you can call the bank it is drawn on to see if it is good - most will do it, not all. You can also go to his bank, if it is convenient for you, and cash it right away if you have the proper ID and there is money in the account. At least if it is a bad check, you won't incur any more charges on your account. You said he works with your husband? If so, he can also let the guy know the check was no good - you should give them a call right away and ask for cash or money order as payment. I don't care if you are "legal" or not, passing bad checks is a federal offense!
Hope This Helps!!
thanks! That one sure had me stumped!!
A check is a legal contract. It doesn't matter if you have a legal business, he signed a contract for full payment of a service that was rendered. You could also call his bank to see if both check will clear now and if so cash them at his bank fast. When he picks up the cake he has to pay for the banks charge in cash. If his checks are not good, ask him to replace the checks with cash plus the bank charge. If he tries to cancel the second cake, tell him that he owes for the supplies already bought for the cake. If you don't want to face him, you can type a letter and ask you dh to hand it to him. Be tactful, he might not have realized there was a problem. Good luck
Thanks everyone!
It was very helpful to get responses from you. I wrote a letter as follows and tried to be "a woman of God" as my hubby reminded me I am I have a tendency to be very mean when I think I am wronged 
. I made sure my hubby didn't think this was too "mean", it was however stern and businessey (I think). I also made a copy of the check to go with it. Hubby took the letter to work and set it on his desk.
Man came back to hubby to report that MY bank had typed in the routing # wrong! So he politley said he would pay the original amount. AHHHHH!!
Hubby called up today demanding I now write an appology letter and said I was not tackful in the letter I sent, and that he was teaching me a lesson in how I need to deal with customers. WHAT??
Sorry for the soap opera, but I am attaching the letter below and would appreciate any thing you think I should have changed. This is a customer and I do feel bad, but I also had to protect my business and how was I to know it was the bank and not him?!
Thanks!!
"Dear Mr. Hernandez,
I am writing this letter to inform you that the check I received from you for the original cake that I made, was returned. I certainly understand that mistakes are sometimes made, however, this oversight on your part has incurred added fees from my bank, which you are now legally responsible for.
I would appreciate payment in full in the amount of $50 CASH paid to my husband, Aaron, no later than Tuesday the 5th of Dec. Clearly this includes the fee charged to my account as well.
As I have already said, I understand that oversights are easy to make, however I will not be able to fill your order placed for Friday the 8th unless the fees are paid by Tue. The 5th.
Please also keep in mind that as stated on our Sophisticakes website, if I am unable to fill your order for the 8th, I will be refunding your money minus 50% for the reservation of date and materials already purchased.
Thanks so much for your quick response in getting this all resolved.
Sincerely,
Ivy"
Ivy hun I think you did great! And if it is true that your bank entered the wrong routing number there isn't a way. My sister used to work at a bank and the numbers are not inputted by hand they are put into a machine (the computer) and it runs thru just like it does at the store on the register and the computer prints it's dealy on the back of it after it reads the numbers... no way can it be an error in the inputting of the numbers. However if it was the case I would call the bank and check and asked them if it was possible to do so.
In the future ANY check you accept from ANYONE!!! take it to THEIR bank and cash it, do not deposit the check itself, cashing it at their bank will do two things, if it is unpayable at that time, it will be handed back to you for later submission, as it will not charge YOU anything it will charge him possibly $35.~ EFC fees and then again the next time you do it... basically you won't be charged squat if you go to their bank, they will be charged the bad check fees and such.
Also I would ask my bank to stop transaction and return to you the second check for the next due cake and attempt to cash it at his bank if possible to do.
I think you husband is just embarassed that he has to face this man everyday at work and his wife had to sick the dogs on him to get payment and maybe it embarassed the man as well since he has to work with your husband everyday.... But I would seriously call my bank and find out if it is at all possible to input the routing number wrong or if it is electronically read.
Good luck and don't feel bad you run a business and Walmart wouldn't take any shit off this man and his bad check so why should you? 
Ohmygoodies is correct. This was not a bank error. If he reguarly uses these checks then the routing number is correct. The banks do not hand type each check that is deposited. But to be sure go to your bank and ask. Then you can tell your husband what the bank said and maybe your husband can apoligize to you. I also agree that you should cash the checks at their banks not yours. They will receive the NSF fee not you. The customer needs to pay the original amount plus the charge that you incurred from the bank. No less. He is lucky that you are not adding on any additional charges for the time you are having to straighten out this mess. Most stores charge a $25 or $35 NSF charge.
If the second check has not been deposited yet, call his bank to see if it will clear, then go to his bank and cash it. That will tell you if he is lying if there are no funds in his bank. Again you can prove to your husband that he is lying and that you have nothing to apoligize for. He wrote a legal contract and he is liable. Your letter is very professional and it is very clearly stated what your intentions are regarding any future orders. Do not let your husband bully you just because he works with this man and is probably embarrassed that this situation has occured. You did the labor and he has to pay for your services.
Hope this works out for you. I sure don't think you have anything to apologize for. It's like someone said earlier, walmart or any other store wouldn't let him get away with it for a moment and neither should you
I thought your letter was just fine. Very professional. Personally I wouldn't even bother with the second cake but then I don't put up with problem people even for a minute. My "out" is that I'm booked. I also know what it's like to have hubby in the middle -- mine is a handyman who is very popular. He has many clients that he has "bragged" about my cakes to. I've given samples and estimates on cakes but do you think I've gotten one order??? NOOOOOOO!!! I have since told hubby that I thank him for pushing my business, but I'm not nearly as impressed with his clients as he is. And no more free samples!!!
I completely agree, this is not a possibilty as far as my bank says. I've had similar problem before and was told it was scanned by computer to be entered not hand entered. So the checking with the bank would deff be a thing I would do as well as a statement from them stating why the check was returned. Then who can dispute it? Not your hubby or this customer. If your husband is embarrassed I am understanding to this. But it was my understanding this man asked you to fill an order. He did not do you a favor by asking, it was a service request and you have fullfilled your part of said service agreement. Now he is has to fullfill his. I would also add a return check fee and clause to your agreement so future customers know what to expect in advance and you feel a little more easy about seeking your reimbursment as they were made aware clearly what was to happen in this situation. Keep your christianity sanity this way too! And give DH a big squeeze and he'll recover a little less ticked, who can resist a hug? 
I have a statement on all my paperwork and contracts, plus my website about accepting payments, should check not clear, I charge an additional $35 plus the orginal amount. That way they know up front. I agree with you sending a letter for notification. He either knew he wrote a bad check or not. I don't think the letter was mean, howver I don't think it is professional to use your husband as the Collection agency. As a few people mentioned...it cause embarasment on both men and they have to continue to work together. Your husband is rightly upset, he has to deal with this man daily. It is best if you leave him out of it and take it up directly with the client that wrote a check. Legal or not leagl if you want to run a business it includes the dirty work. Sorry. I agree with your husband. (please don't kill me).
What an awful situation you have been put in and your husband too. Hopefully everything will work out for you and definitly set a return check fee.
The other folks beat me to this............NO WAY the bank wrote the wrong routing number, especially yours! If he thinks that, he has no idea what he is talking about as these are the numbers microencoded on the bottom of the check, read by machine. The ONLY thing that could possibly be keyed in is the amount of the check (see if it matches the written amount - check the encoded numbers on the bottom right of the returned check). And if the routing number is wrong on the checks (fault of the printer, not the bank), every check he wrote from that checkbook would bounce. You have NOTHING to apolgize for and tell your husband that.......and that a bank employee told you this information. Heck, check with your personal bank, they will tell you the same thing.
Well, you can change your check policy...you can stop taking checks and only do cakes for cash..or make sure that clients check clear 2 weeks before you go and buy ANYTHING to fill the order.
I have a custom cake shop and I REFUSE To accept checks from ANYONE. I don't have the time nor the energy to chase after people that write NSF checks.
No MONEY..NO CAKEY! lol
So sorry! What an uncomfortable situation to be put into. Crap happens. I'm sure many of us have accidentally bounced checks. He might be humiliated and doesn't know what to say, so is saying nothing and waiting for you to approach him. I think your letter is professional, but agree that you should remove your husband from the situation.
That happened to me...ONCE. Now, I only accept cash. No exceptions. I tell new customers upfront and have never had an issue.
How embarassing for him... now this whole thing leaves you with two problems: 1) you are short of money
2) now it is practically your problem on how to tell him..
that really sucks.. 
I am so sorry this is happening to you.. Maybe if you are somewhat "well off", then i'm sure you would not probably care, but you're not, as what you mention, it's what's making you afloat..
He had the nerve to order another one after he handed you a bad check..
I really hope he will give you cash.. next time take CASH ONLY ..
When the check was returned to you was it marked NSF or Account Not found? If "by chance" a # was entered incorrectly is would be stamped "account not found". If funds were not availabe it would be stamped "NSF". I also work for a bank and agree with everyone else that the routing # and account # are encoded on the bottom of the check and read electronically, not entered manually. If it is marked NSF you might bring that to his attention (and your DH).
I think your biggest mistake was to get your husband involved, you should had call the men directly on the phone and explain what happened..and simply ask for cash without making a huge deal. I dont think your husband is giving you too much support, you should not apoligize to him , the man(custumer) should apoligize to you, he's the one that scr@#%$ you, I hope you learn from this mistake ,NEVER TAKE CHECKS!!!!
Well, Thank you all sooo much for the help!
I talked with the "man"=my customer, on the phone today, he assured me it was wrong #- 2 of them on the check. I promtly called my bank and after looking it all up in their system (and me being on hold for a very very long time) they told me that he was indeed correct. The routing #'s that my bank entered were off by 2 digits. When I asked how something like this could happen, and if these are read by machine or manual, he said manually by a data entry person and then he said something about Terrorism and overseas accounts.... I have no idea WHAT that is about . However, he appologized profusely, told me they would re-run the check and obviously put the added fees back me my account- hoorray!!
I felt bad after, but then I thought, how was I to know? His check when returned WAS stamped NSF.
Poor guy got my letter and thought someone had broke into his account and stole all his money! And I had no way of knowing he wasn't ripping me off!
The bank also said they will be tracking it and investigating
I have not spoke with customer( although when I spoke to him earlier I did appologize if my letter sounded accusing) since speaking to bank, however, he did send cash home with my husband (who will NEVER be put in the middle again-)- and I think I'll put clauses in all of my things or stop accepting checks.
Thanks Again!!
Ivy
To make everyone feel better and since it seems to be the banks fault, have the bank issue a letter explaining the situation that they put you in with your customer. They caused a problem for your business that could have snowballed by him bad mouthing you because you went after him not knowing it was a bank error. The bank should be more than happy to help smooth this out since it was there fault. If they do not, I would change banks asap.
I'm so glad for you that this got resolved favorably with minor irritation!
Personally, I would call the man (customer) back, let him know that he was indeed correct and apologize for the situation your bank put you in.
I'd also ask the bank to write an apology to the man as well.
Years ago, shortly after I opened an account with my bank, they incorrectly deposited my money into someone else's account (wrote wrong account number on the deposit slip). My rent check bounced on my landlard. Lease clearly expressed the cost incurred if that happened. Rent due in cash immediately, plus bank fees incurred, plus 10% charge for every day rent was late due to "bad" check. I freaked and contacted my bank in panic (I thought someone had gotten ahold of my account info and cleaned me out since I had just made a large deposit) . I explained the financial problems their error created and they not only apologized profusely, they wrote a letter to my landlord explaining what happened AND they called her to explain it too! As much as she didn't want to, my landlord reversed all the penalties and accepted a new rent check. If she hadn't the bank assured me they would pay any and all expenses due to their error. Needless to say I still bank with them even though they are "out of my way" to get to the bank (and no online banking or ATM/debit card).
Keep up the good work and if you continue to accept checks be sure to add a clause in your contract that protects you if something similar happens again.
Ok, this really confuses me about your bank because the most my bank every manually enters is the amount on the check.....machines read the routing number. Must be a very small bank you deal with. Glad things worked out. Oh and yes, the bank does owe you a letter of apology to both you and your customer, and they should refund any overdraft/return deposited item charges to both you and your customer - be sure to ask for it as they won't volunterily refund fees.
I recently joined PayPals Merchant Services. For a small fee you can accept credit cards by invoicing your customer through PayPal and all they have to do is click on pay and put in their credit card information. They do not have to be a member to use it. I charge the customer an extra $5.00 processing fee so it doesn't cost me anything to use this and it does offer people a chance to use a credit card if they are short on cash. It has worked wonderfully so far.
I am so glad this worked out for you. I was put in the same situation with the Office Manager for the City's District Attorney's office. It was awful and I ended up getting cash and reimbursed the bank charges. I had an awful time getting my stands back and never got one of them back. She also ended up paying for it. It took a lot of e-mails, certified letters and calls to her secretary to leave messages for her.
If this were me in this situation and it was clearly the banks error, now that they have cleared that up for you, I would write him an appology letter expressing your deepest and stating that you had no idea the bank manually entered the number so you just did what you felt you should which was to notify the account holder. I'd also include a little something like a small cake or an order of cake balls or something like that to show your empathy and such Good luck gaining the respect back of this customer, I'm sure he'll accept your appology knowing it wasn't your fault.
I have not personally ever gotten a bad check for a cake...but my husband had that happen when he was farming and selling hay...you would think that people who could own 8 to 10 purebred horses could have the money to feed them!! But what I now do is I take the check to the bank that it is written on and cash it. This is a little more hassle but then it doesn't cost your account if it doesn't clear!! But be warned I once had to give 2 forms of ID and be fingerprinted for a $100 check!!
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