If you're a merchant wanting to learn about check handling and check safety for your business, this web page is for you. Here's an outline of what's covered linked to each topic:

Isn't Accepting Checks Expensive and Risky?

Have you ever felt humiliated by a merchant who refused to accept your check payment? If the merchant explained why, you'd probably hear something to the effect of "too risky" and/or "too expensive to process".

Ironically, this merchant would probably have been very happy to accept a credit card for payment and not think twice about it, even though in reality the check would have been more secure and less costly for the Merchant to process than the credit card! Without knowing the real facts about check services, this merchant ended up losing a sale and probably a customer.

There us no reason for this sad saga to occur for your business, regardless of whether you are an ecommerce merchant, retail account merchant, mobile merchant, etc. There are a number of innovative and reputable Check Services providers and solutions available for merchants in need of the ability to safely accept checks from their customers to choose from. Such providers as EZCheck, a check services provider for retail establishments, and eCheck.net for website or virtual terminal check processing are among the best.

Does your business need Check Services?

Ask yourself the following question: Does my competitor accept checks?

If your competitor accepts checks, realize every time a customers sees a "No Checks Accepted" sign in your establishment, they are being delivered gift wrapped to your competitor. It's hard to understand the logic in this because the check would have been just as secure and probably less expensive than a credit card sale which the Merchant would have happily accepted; yet he chose to throw perfectly good business out of the door.

If you're a merchant wondering if accepting checks is right for you, be sure to read through the definitions on this page.

What Are "Check Services"?

Check Services is actually a confusing generic term for Check Guarantee and Check Verification, two totally and dramatically different concepts. Many a merchant has painfully learned the difference between the two by thinking they had one when they really had the other. Hopefully this article will clear this up for you and help you avoid the pitfalls many others have encountered.

good or bad check?

Check Verification vs. Check Guarantee

CHECK VERIFICATION is a process in which a check writer is electronically checked against a database of check writers who have a history of writing bad checks, have had their bank account closed as a result of bad check writing, or are otherwise an undesirable check-acceptance risk.

Verification may provide valuable information to a Merchant contemplating accepting a check from a customer, but offers no guarantee of payment whatsoever.

If the Merchant accepts the check and it bounces, the Verification provider may or may not offer collection services at additional cost, and the Merchant will receive payment for the check only if the collection effort is successful.

CHECK GUARANTEE takes the verification process one step further and guarantees that the check is good by reimbursing the Merchant if the check bounces, subject to the terms of the Check Guarantee agreement.

If the Guarantee provider guarantees the check up-front and the check bounces, the Merchant will receive payment of the check regardless of whether or not the check is collected by the Guarantor, again subject to the terms of the Agreement.

Here are two types of Check Guarantee:

  • Retail face-to-face POS
  • eCommerce E-Check

Check Conversion

CHECK CONVERSION, also known as CHECK TRUNCATION, is an enhancement to either of the above. Check conversion is the process of converting a paper check at point of sale into and ACH debit. In other words, data from the paper check is scanned or otherwise electronically processed at the point of sale, then paperlessly processed electronically in a manner similar to that of a credit card. The paper check is voided and handed back to the consumer.

The benefit of check conversion is faster availability of funds to the Merchant.

eCommerce Checks

eCommerce Checks is a must for all eCommerce internet merchants. It provides a secure system in which merchants can accept and process payments from consumer and corporate bank accounts directly from their website or through a Virtual Terminal. By accepting electronic e-checks, the merchant expands the payment options available to new and existing customers, enhancing customer loyalty and potentially increasing sales.

Benefits of E-checks:

  • Lower Fees - Lower rates than credit cards or PayPal
  • More Efficient - The system does everything online, eliminating the cost and inconvenience of manually processing and waiting for paper checks in the mail.
  • Fully Integrated Solution - No third-party integration required. Implementing eCheck.Net is easy for merchants already using the specified Payment Gateway.
  • Integrated Reporting - Provides a combined view of all eCheck.Net and credit card payment transactions. Reconcile payment and billing activity using online reports and statements.
  • Ship Product Sooner - Improved up-front transaction validation that returns the status of transactions faster.
  • Security - Uses the latest 128-bit Secure Socket Layer (SSL) technology for secure Internet Protocol (IP) transactions.

E-check capability is an absolute MUST for any internet e-commerce merchant.

Telephone Guarantee

Merchant obtains check guarantee using only a touch-tone telephone, no costly extra equipment necessary. Any guaranteed item returned NSF by the bank is reimbursed to the Merchant.

Benefits of Telephone Guarantee:

  • No additional equipment needed, only a phone.
  • Works great with cell phones.
  • Low flat fee only per-check fees for small ticket merchants.
  • Includes Guarantee, not just verification.
  • Customized programs for both small and high ticket merchants.
  • Great for start-up businesses and mobile merchants such as limos and taxis, a/c and heating, plumbing, tow trucks, pool services, pest control, landscapers, trade shows, flea market vendors, home inspection companies, glass companies, locksmiths, carpet cleaners, mobile merchants of all kind, and any start-up business on a budget.

Paper Check Guarantee

Paper Check Guarantee is an easy to learn retail point-of-sale process usually integrated into the merchant's existing credit card machine. It works with or without a low cost optional check reader device. Once approved, payment to the merchant is guaranteed allowing the merchant to increase sales without increasing risks or driving valuable customers to competitors resulting from "No Checks Accepted" signs.

Benefits of Paper Check Guarantee:

  • Works with most existing merchant credit card machines
  • Items are GUARANTEED, not just verified.
  • Economical and actually costs less than most credit card authorization.
  • Works with or without optional scanner or reader.
  • Ideal for these kinds of face-to-face businesses, particularly any retail business with average sale greater than $25, high-volume businesses in need of fast efficient check-out, automobile services of all kinds, and high ticket merchants such as furniture and jewelry.

Check Guarantee with Conversion

Check Guarantee with Conversion has all the benefits of Paper Check Guarantee (see above) combined with the speed, ease, and enhanced safety of electronic processing. In fact, almost exactly like accepting a credit or debit card at the point-of-sale. The check is converted to a paperless transaction by electronically moving funds from the customer's bank account to the Merchant's bank account. Conversion is also available without Guarantee.

Benefits of Check Guarantee with Conversion:

  • Very high volume merchants in need of ultra high-speed checkout.
  • Merchants who require access to their funds faster than provided by traditional paper check deposits.

Check Verification and Collection

The lowest priced of all check services, Verification provides merchants with access to national database to find out if the writer has any outstanding unpaid items in the system. If the check is returned to the merchant, collection services are made available to the merchant who receives funds for the check upon successful collection.

Benefits of Check Verification and Collection:

  • Merchants who normally process very low amount checks, usually under $25.
  • Merchants requiring affordable alternative to managing check risk at the lowest possible cost.

Telephone Check Conversion

Telephone Check Conversion is for non face-to-face transactions. This economical system provides Merchants with a fast and secure system to allow their customers to pay by check over the phone. Requires only a PC with internet access and no additional processing equipment needed. Approved transactions are converted to electronic funds transfer (EFT) transactions for deposit directly to the merchant's checking account. Online reporting and optional collection services are available.

Benefits of Telephone Check Conversion:

  • Allows merchants to safely and quickly process phone orders.
  • Eliminates the need to wait for checks to arrive in the mail.
  • Reduces lost sales from customers who never mail their check.
  • Allows merchants to fulfill orders more quickly.
  • Allows merchants to make sales to customers not able or willing to use a credit card.
  • A great "buy it now" closing technique -- no more buyer procrastination.
  • No additional equipment needed, only a PC with internet connection.
  • Ideal for merchants who would benefit from follow-up telephone add-on sales opportunities, merchants who get lots of sales over the phone, medical practices of all kinds. No more "the check's in the mail" collection calls.

What You Should Know Before Selecting a Check Services Provider

  • Check conversion/truncation may or may not include Check Guarantee protection. Read the contract!
  • Stop-pay protection usually is not included in Check Guarantee programs. It may or may not be available at extra cost. Find out before you sign.
  • If your Check Guarantee program DOES include stop-pay protection, understand the difference between disputed and non-disputed stop-pay.
  • The provider should have sufficient resources and history of paying claims in a timely and dependable manner.
  • The provider should have a proven long-term track record in the industry.
  • The provider should have a selection of different solutions customized for the many different Merchant types it serves, not a "one size fits all" approach.