Boing! Bounced Checks and Other Check-Writing Practices
In good times and bad, but especially in tough economic times, it seems all to tempting to get—shall we say—“creative” with the checkbook, by pushing the timing and other aspects of writing checks as far as you can to maximize the funds you have. In the good ol’ days of manual checks and physical clearinghouses where banks exchanged the physical checks, processing a check could take days or even weeks to clear your account. Many people and businesses would write a check knowing the funds weren’t in the account at the time, but that receipts would arrive (hopefully) by the time the check cleared the bank. This was known as “kiting.”
As a vendor who recently had a check returned from the bank, I’m completely and totally unappreciative of having a check not clear the bank in my deposit and incurring the cost of a check being processed multiple times, or rejected entirely and returned with an inability to process because it was “postdated” for the purposes of preventing it from being processed earlier. Big news: Banks process the checks (generally) regardless of date. If a bank returns a check because of postdating (for a date after the invoice was due) and for a date after the check was printed/written and mailed (what are you thinking?), from a vendor perspective it is still a bounced check.
When the check goes “Boing!” (hear the bounce?), the vendor isn’t going to smile and say, “Oh no problem; I’ll cover the costs of the bank fees on your failure to execute a proper payment.” The vendor can—and usually will—reasonably expect to charge the client the costs of the bank fees.
If you as a client are postdating your checks because you don’t have funds in your account to cover the check, and/or the bank refuses to honor postdated checks then…ethically, Yes! YOU ARE RESPONSIBLE FOR THE FEES THAT RESULT. A vendor can reasonably expect to deposit a check at the time it is received if payment is due. Not “oh, let me send you a check and date it two, three, seven, ten, thirty days later, and expect you as a vendor to hold it until then for deposit.” Once again: THAT ISN’T PAYING YOUR BILL! Last time I checked (no pun intended), a vendor isn’t paid until he/she can actually deposit and collect the funds.
Yes, you could say this is a very touchy subject. As I go around town and do business, I’m noticing more and more checks (or their new electronic replicas) taped to the wall of retail establishments … I see notes posted reminding employees to not take checks from Tom, Dick, and Harry—and Larry, Moe, and Curly too. It seems that the philosophy is fast beginning to resemble the old joke that goes something like “Well of course we have money! There are still checks in the checkbook!” It may work that way for the government, but in the real world businesses work hard to provide goods and services and they should reasonably expect to be paid in full and on time.
When it isn’t possible, the sound that should be heard is the telephone ringing and clients calling to explain they’ll be a little late or a little short this month, because cash is a little short and they’ll send as much as they can. Maybe I’m from another century, another time, another place, but I remember when that was the way things were done. Ah the good ol’ days … when “Boing!” was the sound of the little ball on the rubber string coming back to bounce against the paddle. Now let’s all go fly a kite!
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