Bad Checks

Bad checks are one of the biggest headaches in the business world. Not only are you as a merchant out for the value of the check, but you are also out the man-hours and administrative costs tracking down the customer, who loses money through bad check penalties; it's a no-win situation for everyone involved. Bad checks are bad news, plain and simple.

According to Debt Counselors of America, about 450 million bad checks are written each year, each one costing $10-30 to process. And if you write one bad check, there's a good chance that there won't be enough in the account for the next one, either. (Consider this, too: writing a bad check is illegal in every state, with penalties as high as $1,500.)

Beating Bad Checks

As an individual, the best way to avoid bouncing checks--and paying banks and merchants their "bounced check" fees--is to be smart. Keep your checkbook updated and don't forget automatic withdrawals, service charges, and all those pesky fees. You can even keep extra money in your account: don't record it in your checkbook, but know that it will be there if your balance gets low.

As a business owner or retailer, you can avoid rubber checks by using a check verification system. There are also a number of financial services that will track down insufficient fund checks. By letting them tackle this for you, you can spend your time and energy running your business.