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What You Need to Know
Key Takeaways
- Bouncing a check means you’ve written a check that the bank couldn’t process. This usually happens when you don’t have enough funds in your checking account to cover the full amount.
- You may be charged a fee as high as $35 or more.
- Keeping tabs on your account’s balance can help you avoid bouncing a check.
Writing a check that bounces – as well as trying to cash one – can cost you. Read on to learn what bounced checks are, how to minimize their effects and how to avoid them altogether.
What Is a Bounced Check?
When you bounce a check, it means that you wrote a check that the bank couldn’t process. Typically, it’s because you didn’t have enough funds in your checking account to cover the full amount of the check.
It can also happen when the check writer’s account is closed, they request a “stop payment” or the check turns out to be fraudulent.
What Happens When a Check Bounces?
Bouncing a check can be expensive and cause headaches down the line. Here are some consequences you could face.
Nonsufficient funds fees. A rejected check may result in a nonsufficient funds fee, also known as an NSF or returned item fee. You could face this penalty if your bank doesn’t cover the check, it bounces and returns to your financial institution.
The fee could be as high as $35 or more. However, many banks have been moving away from charging nonsufficient funds fees. According to a 2023 report from the Consumer Financial Protection Bureau, nearly two-thirds of banks with over $10 billion in assets have stopped imposing this charge, but 80% of credit unions of the same size still do.
Look over your financial institution’s rules to see what fees you might be responsible for.
Penalties from the payee. Merchants may be able to charge up to $40 for receiving a bounced check. You could also face late fees or even eviction.
Closed bank account. You need to pay bank fees on time or else your bank could close your account, warns Alexa Serrano Cruz, senior personal finance editor for Finder.com.
Negative marks on your banking record. If you have a history of bouncing checks, your bank may report this information to ChexSystems, a consumer reporting agency. That could prevent you from opening bank accounts at other banks that use ChexSystems to make account decisions, says Leslie Tayne, a debt resolution attorney and founder of Tayne Law Group in New York.
Similarly, if you write checks that bounce at retailers or other businesses, it may be reported to TeleCheck, which many stores use to prevent individuals from paying with bad checks.
What Should You Do if You Bounce a Check?
Here are some steps to take when dealing with bounced checks:
If You Wrote the Check
- Let the recipient know as soon as possible. “Request to remit payment again, so long as there are now sufficient funds in the account to cover not only the payment, but the fees from the bank,” Tayne says.
- If this is a rare event for you, she suggests contacting the bank and asking it to reverse the fees. The bank may decide to cut you a break for a one-time incident.
If You Received a Bounced Check
- Tayne says you should contact the person who wrote the check and ask them to pay you again, including the NSF fee that your bank charged you. “If you are given another personal check to cash, you can bring it to the bank listed on the check and ask if there is enough money in their account to cash the check,” Tayne says. “If so, you can cash it on the spot without fear that the check will bounce again.”
- If the person who wrote you the bad check refuses to make it right, you can send a certified letter demanding payment.
- If that person received goods or services, you might be able to file a police report. “If you don’t hear back after sending the certified letter, you can get in touch with the local district attorney and request prosecution. Navigating this legal landscape can be challenging, so it’s always a good idea to get recommendations from those you trust for a local attorney that can explain your legal options,” Tayne says.
How Can You Prevent Bounced Checks?
The easiest way to prevent bounced checks is making sure you’ll have enough money in your account when the check is deposited and by balancing your checkbook each month, Tayne says. “You can check with the bank to be sure the funds are sufficient in the account, and you can also get overdraft protection on your account, which allows for a safety net in case the account does not have enough money.”
And though it may be tempting, don’t count on uncashed checks to free up money in your account for other expenses. “Make sure you have enough funds to cover your regular expenses and the costs you’re paying for,” Cruz says.
Because it’s tough to control when a check is actually cashed by the recipient, Tayne suggests instead using a money order or cashier’s check, which are both prepaid by the individual sending the money. That way, you don’t have to wonder if you’ll still have enough money in your account by the time it’s cashed. If you’re the receiver of the money order or cashier’s check, you can trust that the funds will be there when you go to cash it.
