Okay, so I’m currently using a local collection agency (free of charge) who gives me face value of my check plus 25% of state fee collected (when they collect). Since 2004, they have collected $4800 face value, but I’m still out $6200 in face value. Doesn’t seem like such a great success rate, but they are the only ones I have used, so maybe that’s okay. And they don’t EFT bounced checks, but do it the old fashion way, calling and sending letters. So any suggestions as far as national companies that people have used and your success rate (and what they charge).
I use Cybrcollect. They’ve done pretty well. We are in a very upscale area, so we don’t have too many bounced checks.
Scrap the whole check taking thing just do cash and credit cards. The only time we take checks is if its a is a corporate acct or the customer has more than 50 orders or so in our system. If someone has a checking acct and no cc card you really have to question it.
Even though a lot of people are paying with debit cards now, there are still many people who like to pay with checks. I receive a lot of checks and only a small percentage of them are returned for non sufficient funds. Even with the bank fees that come along with the bounced checks, it still costs me less than my credit card fees. So overall it still costs you less to accept checks than it does credit cards.
My way of thinking is that I want to provide as many options for my customers to pay as possible. I pay alot more in credit card fees compared to the small amount of bounce check fees.
We use a check scanner that we lease from our bank. Its $35 per month, the check is scanned, the account number is bounced against a national database of bad check writers, then the check is converted to an EFT, and the funds are deposited in my account, for $.25 per check. The bank is responsible for getting the $ for themselves, I’m guaranteed mine!
We maybe get 1 or 2 checks per day, but my $40 or so a month is fees I would easily lose on 1 bad check. So worst case, I’m offering a convenience to the few customers each day that still write checks.
I’ve used collection companies in the past. They often get rude with the customer, in the name of my business. Thats not how I want anyone to interact with my customers on my behalf. Especially in 2008 when the technology can eliminate then entire issue.
Suggestion: promise yourself you’ll fix this problem next week, and move on to something that makes you money!
For less than $200 you can buy a check reader. $35 seems a bit steep. The 25 cents is a pretty good deal though for getting paid right away and removing the risk.
$6200 over 4 years? That isn’t much. About $125 a month, or 5 checks?
At the first shop I managed, we got quite a lot of bad checks. I just called the customers and asked them to pay for the bounced checks, and sent out a driver to collect cash. 75% of the apologized and took care of it right there. The rest gave me a date, like “This Friday”, and made good. I only had 1 check written on a stolen account go uncollected.
If they are bouncing checks to you, they are probably bouncing them all over, and are very tired of getting letters in the mail. Giving them a call so you don’t become another letter in the garbage is a better strategy. 5 Calls should take less than 20 minutes, and you can also work your old NSF checks.
I think it was actually $11,000. Anyway, that is insane. If I had to deal with that hassle I would eliminate accepting checks. I guess I am lucky. I have only had two bad checks this year and five last year.
I agree that not everyone likes to just up and use their CC and therefore, uses checks only.
I think it would be kind of unfair to hold check writers at a suspect level unless they give you reason to be suspect.
Example, my mother is 71 and does NOT trust electronic forms of currency.
She refuses to get a debit card for her bank account and despised when her social security wanted to direct deposit.
If she’s asked if she has a CC, she will say no. In her words “it’s nobody’s business whether I have a credit card or not if my check is good, and it always is”.
But, her check numbers are in the 14,000’s without skipping up numbers herself by buying checks from an independant company. She has never written a bad check in her life, and she has walked out of establishments wanting alternate forms of payment other than checks (considering she’s a new customer or something…not a general “no check rule” from anyone).
In her opinion, it’s about respect. If they don’t want her check, then they assume she’s a deadbeat…and those types won’t get her business.
We get about 60-70% recovery from our collection agency. The losses on bad checks that can not be collected stil make accepting checks MUCH less expensive than taking credit cards.
What are your bad check losses as a percentage of total checks collected? If they are less than 2.5% you are better off taking a ceck than a credit card. For us, bad check losses are less than 1% of checks collected.
Our rules for accepting checks are:
- Preprinted checks with name, address etc only.
- Driver or cashier adds order number to the check so we can tell where we delivered.
We used to only take checks over number 300 or 600 or something, but we have let that slide. We used to get the most bad checks from college kids, but they mostly don’t use checking accounts any more.