Safer Checks, Really?

Will, Will, Will, I get bounced checks all the time and Timmy's stuck in the well! Save us!

I hear it all the time. How to fix it though...

Check Guarantee. By the way, the name says it all. Not really anything complicated there. How one gets to it is another matter entirely. You see, in today's modern world the facsimile has helped us more than most know. Nowadays, when you get your checking statement at the end of the month, you don't get your checks back anymore, you get a facsimile of them copied right onto the back page of the statement. Nifty huh?

Just the fax, ma'am.

Well this is also how we can present checks. It is slightly more complicated as there are magnetic ink numbers on the bottom of the check, but most check scanners people use now are combinations of M.I.C.R. readers (mag ink character recognition, and pronounced "micker") and little fax machines that copy the check and send an image along with it to the banks. Using this advancement, we now have things like Remote Deposit (which I cover in What About Checks?), Verification, and yes, Guarantee.

To get these you must sign up for them and there is a fee. Sadly (and in total keeping with the industry), most groups and banks charge the same rate for Check Guarantee as they would a credit card. One should be able to talk them into significantly lower rates for the check, but that is up to you. Verification will go out and magically check to see if there is enough money in the person's account at that time. However, they can still go out and write a hundred checks before that one ever makes it to the bank.

Guarantee will, ...well guarantee that the check is good. Duh. It will not do this for all checks. It will however, go out and check the system and based on the person's history decide whether or not to pay it. If it declines, ask for another type of payment. If it accepts, then you are good as paid. This is because whomever guaranteed the check (the processor) is now going to pay you and the actual check will pay them back. Woe be to the person that bounces a check to an ISO or a processor. I have seen them chase a customer for 4 years over a $10 check. The check writer by then had over a $100 in fees accumulated over the one bad check.

Check please...