Today, fewer checks circulate in the financial system than they did 10 years ago. For customers who have yet to switch to electronic forms of payment, it is necessary to guard your business from depositing checks written from accounts with insufficient funds.

What To Do If A Check Has Been ReturnedIn a perfect world, hiring a small business collection agency isn’t necessary because every payment goes through without hiccups. Since the world is far from perfect, there are a few things you can do if a check is returned:

  • Try to collect on an item
  • Report an uncollected item to a national reporting agency
  • Hire an agency to collect on an item

Attempting to collect the money yourself takes time and resources you might not be able to spare. You must track the person down, send demand letters and possibly file a court claim.

Reporting the bad check stops the person from passing more bad checks, but you are not guaranteed to get the money owed.

Hiring a professional service to collect on your behalf increases the odds that you will be paid. The collection agency does all the leg work in finding the bad check writer.

Don’t Risk Posting the Check a Second Time

As a merchant, you might think re-running the check is the easier route before trying any of the above suggestions. Rightfully so, you need to get paid for the product or service you provided. However, you risk being charged a fee by your bank each time the check is presented and returned. This could become a nightmare of fees that cost more than the original check amount.

Take the Strategic Way Out

Hire a professional collection company that has experience with NSF checks. This way, you avoid being charged and wasting valuable resources on a customer who might never pay what they owe.

A collection agency uses strategic measures to collect the money you are owed without it costing your business more than you can spare. Instead or random postings, the agency uses smart techniques to increase the odds of collecting.

Although you take reasonable precautions to avoid getting stuck with a bad check, there are some that can occasionally slip through your system. The check could be returned on a closed account as well as one with insufficient funds. Whatever the reason, safeguard your company against losses with a solution that applies to resolving the issue in the least expensive way.