NT Writing Checks

[Corduroy Frog]

Not a tax topic, but certainly an economic topic.

This is been going on for some time, but I'll start with an occasion several months ago.

Wrote a check for $125 to our veterinarian.  The clerk ran in through a machine, then gave the check back to me and told me they already had my money.  End of story??  I would think so.

But no.  She shoved a piece of paper at me and told me to sign it.  She said their lawyer is making them get these things signed any time they are tendered a check.

Didn't make sense to me, so I refused to sign it, and found another veterinarian.

Can anyone tell me what is going on with this??

[kathyc2]

When they run a remote deposit, they don't get confirmation that funds are available like they would with a debit/credit card. 

Guessing what they wanted you to sign was that you are liable for the fee in the event the check bounces.  Since lawyer told them to do it, sounds like they have been burned in the past.

[jklcpa]

10 hours ago, Corduroy Frog said:

The clerk ran in through a machine, then gave the check back to me and told me they already had my money.

She shoved a piece of paper at me and told me to sign it.  She said their lawyer is making them get these things signed any time they are tendered a check. Didn't make sense to me, so I refused to sign it, and found another veterinarian

I suspect Kathy is correct, but are you able to elaborate on what was stated on the form you were asked to sign?

I know that, for example, Tele-Check's system has an authorization slip that the payor signs to allow Tele-Check, as the processor, to present the "check" to your bank for payment. It's a service that the business pays for to have that processor handling its deposits and helps minimize losses for the company.

Also, to be clear, it was the practice owner's decision to present this; the lawyer can't make the owner do anything he or she doesn't want to.

[Medlin Software, Dennis]

Likely the form is acknowledging electronic handling of the check, with the physical check not being saved. I have to wonder if Check-21 makes it presumptive a check can be electronically processed, and such a form not needed. When I use mobile deposit (which is similar to using a physical scan/send machine), the only warning from my bank is to keep the check until the amount is funded. With Check-21, the funding can happen almost instantly, depending on your bank and your agreement with your bank.

The business owner is likely/hopefully paying for a competent attorney (not a friend or relative) and has decided it is in their best interest to use the form.

What gets me is when someone submits CC information which fails, and gets snippy when, if they do it again, I remind them what they are doing is no different than presenting a bad check, and I am within reason to ask them to pay more, to cover some of the costs of the failed attempts. It is ENTIRELY within the CC user's power to make sure the transaction will go through, even if it requires notifying their card issuer in advance. Every failure costs the merchant their time and processing fees!