Check Writing Guarantee

For those who provide their customers the option of paying for goods and services by check, using a check guarantee program can be a valuable asset to your business. These programs are basically an insurance policy to prevent your business from getting stuck with loads of bad checks and the associated fees. The providers perform a range of services for subscribers from approval to collections.

A contract between a check guarantee program and a merchant states all the services provided from the program. It will state the per transaction fees to be paid by the merchant. Also it will inform the merchant of the amount of coverage available on each bad check that slips through the systems in place for check verification. While these programs cannot guarantee that a person has a set amount in their account, they can determine if a customer has a history of writing bad checks.

When using a check guarantee program, the customers bank account and other pertinent information is processed by a verification system which checks the reliability of that individuals check writing history. The merchant will then receive an instant approval or decline message as to whether the check is likely to be paid. When a check is approved through the system, the verification provider then guarantees the merchant a fee if the check bounces.

If the approved check comes back as insufficient funds or is declined for any other reason, then the check guarantee service provider will pay the retailer the agreed upon amount and enter that particular account into their system of pending bad checks. Then the company will attempt collection on the bounced check.

This is a great option for businesses who are frequently burned by bad checks or for those who receive checks for large amounts on a regular basis. These systems allow retailers and service providers to accept checks without the high risk of handling these transactions on an honor system.