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Some Banks Charge Business Customers Merely for Running Checks Through Their System

posted by Nathalie Martin

We all know that banks are allowed to charge customers for things that do not cost them anything, but I guess I just assumed that they did this only to consumers. Silly me. 

I just bounced a check. Long story but my dad sometimes shares bank account numbers with nice people who call him on the phone to “confirm” these numbers. After an incident like this, if I learn of it, I close the account and some checkbooks sometimes survive the whole thing. Today, dad’s tailor called to say a check we wrote was on an account that could not be found, and that as a result, she (the tailor) was charged $12 for processing our “bounced” check. Say what? This is a totally new one on me. Anyone else heard of this? I know for a fact that the larger customers do not generally pay these fees, but I am curious what you all know. Bankrate.com, my go-to for things like this, ran one story on these fees, but there is little else out there.  If you are a business and you pay these fees, it’s time to shop for a new bank.

Comments

I know I got charged for depositing a check that bounced. This was back in 2001.

Having run a small business in the past (2000-2001) where we doing mail-order to parents of college students we would get charged for bounced checks. You may be right in that if your big enough (have enough volume and velocity on the account), you will not pay. However, moving your bank account when you are a business is a little more then just changing your direct deposit number as a consumer. You could have loan agreements and covenants specific to that deposit account, wires could be going in and out, what happens if you are using the account for payroll? All of these are activities that are vitally important and cannot experience a "hiccup". So yes, you may end up having to pay $13 for a bounced check, but if you mess up payroll for your entire employee base for a week then that $13 fee for a bounced every few weeks doesn't seem nearly that expensive.

BTW, you can always use services such as TeleCheck or just go the major big box route and turn the check into an automatic ACH. All of these help lower the expense of bad checks. In the end, you as a business are accepting checks in lieu of cash and its your responsibility to ensure your clients have the funds on hand. Accepting other forms of payment is just as if you extended credit the customer and thus all the responsibility to go with it.

The couple times I've looked at business checking (last time about 10 years ago), the accounts had a plethora of fees. A charge for each item deposited, a charge for each check written, a charge for cash deposited (I think), etc. There is then a credit based on the balance in the account (analogous to interest) and if the account balance is high enough it offsets the fees.

When I opened an account for a political campaign back in my misspent youth it was opened as an individual account to avoid the fees.

When a check bounces the person who wrote the check is hit with a fee and the person who deposits the check is also hit with a fee. I've had it happen a couple times.

That's entirely standard and common.

I get charged for depositing a bounced check. Ironically, if I go to the bank the check is drawn on and try to cash it that bank (Wachovia) demands a fee to cash the check.

A partial solution is to see if the drawee bank offers merchant check verification. That will tell you if there are sufficient funds available at the time of the call. If not I call the check writer and offer to return the check in exchange for cash. That way we both avoid fees.

This isn't new. Back in high school, in the 1991-92 era, I volunteered at an animal shelter. We had fees for certain things including abandoning a pet there (which was voluntary) and adopting a pet (which was mandatory). Neither of these fees was very high (in the $50 range), but they helped keep the pets in kibble.

our biggest problem was people who would write us a check and then cancel it before we could deposit it. Not just because we'd lose the fee but because we'd get hit with an additional penalty fee from the bank. It was like anti-charity.

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