How Businesses Can Collect on Bad Checks

If there’s one thing’s that’s extremely frustrating for business owners, it’s trying to cash a check that ends up bouncing. After working hard to deliver a product or service and make the sale, it can be extremely disheartening to have to deal with a bad check.

Luckily, there are many options besides going to small claims court when it comes to collecting on bad checks, including the following.

Get in Touch With the Bank

It’s possible that the customer was switching funds from one account to another in order to ensure there were enough funds to cover the check amount, but didn’t make it in time. Give it a few days, and then call the bank to inform them that you have a check for a certain amount and see if there is enough cash to cover it. If not, the bank may enforce collection, in which case the funds deposited in the client’s account will be funneled your way.

Call the Customer

Maybe the customer has no idea that the check they wrote would bounce. Give them the benefit of the doubt and give them a call to let them know what happened. It could very well have been an honest mistake. They can always cover the cost with another form of payment, such as credit card.

Mail the Customer a Certified Letter

If you are unable to reach the customer by phone, send them a certified letter with a return receipt included. In the letter, ask them politely to pay the debt owed by a certain due date. A written request/demand could let you collect extra damages on top of what was originally owed in court if you decide to take that route.

Call a Collection Agency

 

While the rate of collecting on debt isn’t very high with a collection agency, it’s still a much better option compared to taking the customer to small claims court. You don’t have to do anything – the collection agency with do all the hard leg work and there is a much better chance that you’ll get something back.

Use a Check Recovery Service

Many people are not aware that there are check recovery services available out there for businesses who have been dealt bad checks from their customers. These services not only help you get the entire value of your check bank, but they often offer their own collection agency services if the check recovery process doesn’t pan out.

Getting a bad check is not fun, but you’ve got plenty of options when it comes to collecting on them.

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