Check collection services are more important now than ever, as American bounce about 450 million checks a year--more than a million a day. And it's a lucrative industry: banks make roughly $5 billion each year in bounced check fees. In fact, they prefer bad checks--their profit margin is enormous--and don't mind if check collection agencies did their jobs or not.

For the business owner, though, check collection is an important part of running an operation. For each bad check that they get, they have to either eat the cost of the sale, send collection agencies after the bad check writer, or redeposit the check, cross their fingers, and hope that it clears on the second try. Until recently, none of these options were very appealing.

Check Collection Services Go Electronic

There are now a number of collection services that can track down the bad checks you've received and remit the funds to your business electronically--and for free. Their costs are covered by fees charged to the check bouncer, so you don't have to spend your precious time or money chasing rubber checks. Generally, you have to sign up for their other financial services before they will recover your bad checks.

In the late 1990s, it became legal for merchants (or someone on their behalf) to redeposit bad checks electronically, making it easier and faster to track down bad check writers. These services monitor the account of the bad check writer and collect your funds as soon as they are deposited. It's legal, fast, and free.