Bounced checks collected fast!

One of the early challenges in establishing a small businesses is collecting bad checks.  Most businesses want customers and are hesitant to tell potential customers they must pay by "cash or credit" so personal checks are often accepted.

Accepting personal checks is fine, IF you practice some common sense tips.  You need to have and follow a "check acceptance policy."  If you have and follow a check acceptance policy, less than 2% of your checks should "bounce."  In fact, there are some businesses that almost never see a bounced check.  I have spoken to merchants who have been in business for more than 20 years and never received a bad check from customers.  When checks do bounce, customers sometimes call and offer to come in and pay what they owe.  They may also be willing to pay some or all the bank fees incurred by the business.

Most retail businesses accept checks.  Rather than create a policy that "goes against the grain," it is better to plan to accept checks and have a plan in place to deal with the ones that bounce.  Part of that plan needs to be a good check acceptance policy.  This will help reduce, but not completely eliminate, bad checks.

When a business is new, every penny counts.  Thus, if a check bounces (especially a large check), this is of great concern to the small business owner.  Police departments finally understand the hardships bad checks can create for businesses and some of them have taken action.  Law enforcement agencies throughout the United States have what is called a "bounced check enforcement unit" or a "bounced check restitution program."  You may check bumchecks.com to see if your area has a district attorney bounced check program.

In an average year estimates are that 45 billion checks will be written.  You do not want to lose a share of that wealth!  The bad news is that about 450 million bounced checks will also be written, and this potentially costs retailers 12 billion dollars a year.

If you chose not to use a bounced check restitution program, you have one more excellent collection alternative.  There are now companies that actually specialize in bounced check collection.  You can find them by running searches on Google and Yahoo for things like "check collection company," "check recovery service," NSF check collection business," etc.  You may also visit the list of bounced check recovery service directory on bumchecks.com or the list of returned check processing providers at returnedcheckmanagement.com.