Urgent! What Are Your Returned Check Policies!
Business By sweetlayers Updated 28 Oct 2010 , 7:06pm by sweetlayers
Ask your bank how many days it takes for a local check to be processed. Add a few days and make that your policy for starting the cake (non-wedding). Out of town checks take longer. I don't do wedding cakes so this is my policy. I totally agree that the wedding cake payment is meant to hold the date and needs to be far enough in advance to be able to fill that date if there is a cancellation. One cake doesn't hurt me. But I will not process any order without the money being in the bank.
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.
I FREAKING LOVE THAT!!!! Is it legal? Something seems not quite right about it, but in a good way! 
I don't have to have policies in regard to bounced checks because I do not accept checks at all for that very reason. It is cash, or credit card payment only!
If you have a checking account then you have a Visa or MC debit ATM card too. Checks are now just a way for people to try to stiff you. They can either pay with their card or go get the cash from an ATM.
cakesdivine, you are so right about banks making it easy to get credit cards. Mine took a few minutes at the bank. Then I turned it over to my web designer who already expected it so it was included in my price. The cost for connection was about $100.00.
If the check were made out to me thenI would just take the check to the person's bank and have the check cashed.
I am not sure if you can do this when a business name is on the "Pay To" line.
I bank with a credit union and love them! I will NEVER go back to a regular bank. The NSF charge is $32 at my bank-that's if you have ALLOT of NSF charges. If you get a couple here in there then it's only $2.00! Yup $2.00!!!
You should email your client then call them. If your worried about calling them on their honeymoon call the person (if there is one( that is listed on the cake contract.
Wow. That's all I'm going to say. Maybe it's just me, but I've only gotten one bad check in two years and it turned out that it was a mistake. The MOB who was paying for the wedding had had her wallet stolen and her account compromised and was not able to have everything put back together until after the wedding. I was upset when I got the check back, but I called her, she explained the situation and I had a cashier's check within a couple of days. The point of this story is, sometimes it is just a mistake, something happened or money got moved around wrong. I would call the MOB or another contact and explain what is going on, chances are it's an honest mistake and they'll do all they can to fix it. If they don't try to fix it, then you should give the authorities a call, but I would give them the benefit of the doubt first.
I don't have to have policies in regard to bounced checks because I do not accept checks at all for that very reason. It is cash, or credit card payment only!
FYI, it is easy for customers to file a dispute with their credit card company if they are unhappy with their order, much easier than canceling a check. The burden of proof for credit card disputes is with the merchant.
While there are customers out there who routinely pass bad checks, this risk is overblown IMHO. Most of the time a bad check is simply an honest mistake.
If the check were made out to me thenI would just take the check to the person's bank and have the check cashed.
I am not sure if you can do this when a business name is on the "Pay To" line.
Depending on the bank, you may be able to cash a check written to your business at the customer's bank if you have an affidavit from your bank stating that you are the owner of the business account. Of course, this doesn't help if there are insufficient funds in the account.
Jason, I have never had anyone reverse a credit card charge. You can only reverse the charge if there is evidence of a problem with the product or fraudulent use the card. And if someone does reverse it it only effects my paypal account. It doesn't reak havoc with my business operating account. Also, because my business is shown as a service business and not a goods sold business Paypal does not have buyer ability to reverse the payment. I can refund a person up to 60 days of their payment but they cannot reverse the charge themselves. If they paid with a CC through paypal they must prove to theire CC company that they did not authorize the charge. Since they can't prove that due to the contract they have with me, the reversal won't go through.
A hot check, can cause a snowball effect and end up costing you hundreds of dollars in overdraft fees and all you can collect by law is $50 over and above the hot check amount. And it can take up to 30 days or more to collect. Sorry but if they have a checking account then they have a MC/Visa Debit card that they can use too. Will never accept a check again. Been burned way too many times to deal with that again.
Oh and someone using a check and purposefully writing a bad one is doing so to get something for nothing or to delay being able to pay for what they want. They are the same folks that will promise to pay on a certa in day then are impossible to reach once the payment deadline is well past. I generally takes you threatening to be a no show to get them to pay. And then they want to give a check?!!! BS! They are trying to get it for free.
Those who have a legit complaint generally have paid in good faith and are sincerely upset about something. If I goofed I refund immediately. end of story. No need for them to play the chasing check/payment game.
You can only reverse the charge if there is evidence of a problem with the product or fraudulent use the card.
Correct. We've certainly heard stores here about customers complaining about the quality of the cake, that could qualify as a "problem with the product" and could be enough for a successful dispute. Again this is only speculation, and the chances of this happening are unlikely -- probably about as unlikely as someone intentionally passing a bad check.
And if someone does reverse it it only effects my paypal account.
I hope you're not keeping your funds in your paypal account, I've heard horror stories about paypal freezing accounts during disputes. Also note that the customer is free to file a dispute directly with their credit card company without any Paypal-specific rules, but then paypal would go after the customer and/or the merchant for reimbursement.
A hot check, can cause a snowball effect and end up costing you hundreds of dollars in overdraft fees
How does a bounced check lead to overdraft fees? At most it would be a NSF fee.
You can also look at credit cards this way: if you pay a 3% processing fee on incoming payments, that is the rough equivalent of three out of every hundred customers passing a bad check without being able to recover money from those customers.
I understand what you are saying cakesdevine about it causing a snowball effect. But at the same time, I for one do not have a debit card. A little over a year ago, mine was stolen and the person did about $4000.00 worth of damage to me and my family (within a month) before I even knew what had happened. 
I have yet to replace it. I have an account with a local credit union and they told me that if anything like this ever happened again, that I would be responsible for all of the damages. I was lucky that I was able to re-coop all but about $600.00 of the money (she was buying prepaid minutes from verizon, and they refused to refund 
). But I refuse to get another card because it is so easy to get stolen or lost. People are even taking pics of them with their cell phones and then making purchases and charge with them online. Just not my cup of tea.
Thats just my opinion and the reason I do not have a debit card any longer. Also, I will not have my middle initial put on my checks, but I sign with it. That way if my checks are stolen, the person won't know to put the middle initial in the signature. A lesson learned the hard way.
I would definitely call the couple on their honeymoon, the only money they may have is the gift money from the wedding, so they may need to set your money aside before spending it on the honeymoon.[/quote]
As far as contacting them on their honeymoon....I'd do it.
If you were a restaurant, and they skipped out on their bill, they'd be contacted. If you were their honeymoon hotel operator, one in the middle of several stops, and they skipped out...they'd be contacted.
Business is business. Doesn't mean you have to be rude, threatening, or malicious. Leave a message...send an email. Whatever--they need to know that they did not pay for a good that they agreed to pay for...and need to make it right--honeymoon or not.
I've only had one in the last 3 years of being in business and it was prior to the wedding. she mailed a deposit, I cashed it, it bounced, I called her, she apologized profusely and came to me with cash less than 2 hours later.
Before stressing too much, I would just call and tell them what happened. I would say most likely it will be taken care of easily. If, however, it was intentional or what have you, then you can stress on it.
Hi all, while I can't get the tears I cried over this situation back, I am happy to report that my company has been paid in full from the client. It was an oversight.
Thanks for all your support and advice regarding this issue. Like all things, when something like this happens, it forces you to take a deeper look into your business policies and practices.
As always CC rocks!
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