Processing Check Payments: Making the Most of Risk Management Resources
While some shop owners have stopped taking checks as payments, you don’t like the idea of placing that limitation on your customers. At the same time, you understand that there is some risk involved with accepting checks. One way to manage that risk is to make the post of the tools that help to protect you and your customers from check fraud. Here is what you need to know about these options.
Creating Electronic Checks
Have you heard of software that makes it possible to quickly scan and verify a paper check? This process is not as difficult as you may think. It basically involves running the check through equipment that creates a digital image. The detail in that image is used to verify that the check is written on an active account, the signature is a match, and there is money in the account to cover the check.
Thanks to this approach, you don’t have to worry about receiving a check that’s from a stolen checkbook, or one that will bounce when it’s presented for payment. In this way, you protect yourself and your client.
The Conversion Comes With a Guarantee
One thing you may not know about this approach to risk management is that the conversion comes with a guarantee. Once the check meets the qualifications set by the provider, you are covered in the event that something goes wrong. That includes other checks passing through the customer’s account and leaving less than enough funds to cover the one presented to you.
Since this type of event could result in bank fees being applied to your operating account, it helps to know that the provider who verified the check will take action. You still must deal with the fact that the check cannot be presented right now, but rest assured the provider will take steps to ensure you get your money.
This guarantee also protects you from possible issues within the conversion process. While such events are rare, it is possible that the verification process may be incomplete and return a false positive to the query. Should that type of thing take place, you are still covered by the guarantee.
Dealing with the Matter of Collections
If a check is returned, that means collection efforts must begin as quickly as possible. Do you really have the time to manage that effort and still run your business?
Before you answer that, think of what collections entails. You have to schedule out time to call those customers and attempt to make payment arrangements. If that fails, you will need to take the checks in to the local bad check unit in town. At that point, you have to wait for the unit to take action and hope for the best.
How would you like it if your provider managed the collection effort on your behalf? Assuming the check was verified at the time it was written, that provider will take care of contacting the customer, providing options for making good on the check, and resolving the matter. If the check does have to be turned over to the authorities, the provider can handle that part of the process too. You are left with more time to focus on the other aspects of running your business.
Talk with a professional about the risk management resources that come along with electronic check processing. Once you understand how the process works and what it can do to protect you and your customer from fraud, adding this resource to your arsenal will be an easy decision.
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