General Guidelines for Accepting Checks

• Never accept a check for a gift card, phone card, prepaid credit card, money order, money transfer or any other item that is the equivalent of cash.
  
• Set guidelines regarding what type of checks your business will accept. Personal checks, two-party, payroll, government issued checks or travelers checks are most common. Post signs and make sure all employees know the store’s policy.
  
• Examine checks very carefully. Compare the signature and handwriting to the signature on the ID presented. Realize though that if a check appears forged, it is possible that the ID is as well. Be familiar with common ways state ID’s are forged, and what a legitimate ID looks like. Accept only current, valid ID.
  
• Ask what the customer’s current address is if it is different on the check than the ID. Ask for a phone number as well. If you think they are giving you a false name or address, write down what they tell you first, then ask again a few minutes later.
  
• Example: Clerk asks the customer what their current address and phone number is. The customer says it is 123 Main St. She writes this on the check and proceeds with completing the transaction. Near the end of the transaction, she says to the customer was it 134 or 132 Main St? If the customer lied and has not practiced the lie, he will be likely to choose one of the incorrect options the clerk has given him. If he did not lie, he will correct her with the same information he gave earlier. This works well with phone numbers too.
  
• Be aware if a person takes great care in signing their name, or tries to distract you while you are examining the check or ID.
  
• Set a policy for check cashing and review it with employees frequently. Your policy may include requiring management’s approval, verifying checks through the issuing bank (some banks will perform this service for depositors only), or verifying checks through a check verification service. (Before contracting with a check verification service, ask the service to provide proof from the Federal Trade Commission that it complies with the Fair Credit Reporting Act.)
  
• Checks should have the name of the person and their address imprinted. Some will also have the phone number and driver’s license number. If the phone or license number is not on the check, obtain it and write it on the check. If the name and address is not imprinted then it is a “starter check.” This indicates that the account is new, and it is wise to refuse it. Checks with numbers in the 100s are also most likely new accounts.
  
• One scheme criminals use is to open a new account and write a large amount of checks off it without the funds to cover them.
  
• Check to make sure that the numeric amount written on the check is the same as what is written in words. An obvious addition step would be to make sure that the amount is the same (or higher if you allow cash back) as the customer’s total.
  
• Do not accept pre-signed checks, especially traveler’s checks. Make the customer sign it in your presence.
  
• Check to make sure the date written on the check is today’s date. Do not accept checks written with a later date on them.
  
• If a person presents a check that is already filled out, it is wise to refuse the check. If they insist, call the person on the account. Do not accept the check if the phone number is given to you by the person presenting the check, or if it is hand-written on the check. If necessary, call information or look in the phone book for the correct number.
  
• Use a check verification service such as SCAN (Shared Check Authorization Network). These systems flag accounts that have been reported closed, or have frequent bad checks written off them.
  
• Encourage customers to use their bank debit cards. Depending on the type of account they have, it may be cheaper for them than writing a check for each transaction. It will also not allow the transaction to go through if there are insufficient funds.
  
• Be careful of people who attempt to use their debit card but when it is declined, write a check instead. They may have the funds in the account but not available to them yet, or they may not. Use your judgment in this scenario. If they have a history of being a good customer, it will offend them if you refuse to accept the check. If they are from out-of-state, it will be difficult to follow up on if the check never clears.
  
• For business checks, consider using Positive Pay. With this system, you submit a list of checks that are to be paid daily. The bank matches up submitted checks with the list, and any “exceptions” are held until it is verified that the check is legitimate.