Returned Checks Overview

A returned check is a check that the bank does not honor. If you are the check writer, it means that your bank will not pay the person or business you wrote the check to. If you received the check, a returned check is a check that you won’t get paid on. Let’s go over the basics of returned checks and what to do if you have one.

Overview of Returned Checks

Returned checks are checks that the check writer’s bank denies. There are a variety of causes for returned checks, including:

• Not enough money in the account
• A stop payment on the check
• The check is too old to honor
• The check was improperly written
• The order in which banks process transactions

As banks and businesses process checks more quickly, returned checks are more and more likely. It is increasingly difficult to ‘play the float’ and hope that funds will arrive in your account before your check gets deposited.

• What is an Electronic Check?
• How The Check21 Law Affects You
• How Check Float Works

Problems With Writing Returned Checks

If you write returned checks, you’re setting yourself up for trouble. You’ll end up paying a lot in fees, you’ll lose the ability to write checks in the future, you risk legal troubles, and your credit can suffer.

• What if I Write Bad Checks?

Receiving Returned Checks

If you’ve received returned checks as a merchant, you can still try to collect the money. You should try to contact the check writer and request that they send the funds - it may have been an honest mistake.

If the check writer will not make good on the returned check, you may have to use stronger tactics. Each state has different laws on how to handle returned checks, the penalties, and dollar limits. Contact your bank or your local District Attorney’s office for instructions on how to deal with a returned check.