What Is the Cashier Doing With My Check?

• Federal law requires retailers to post signage indicating that they use check conversion. If you pay by check at one of these retailers you may notice that your check is scanned and returned to you. The scanner reads your check for important information such as your bank account number, routing number and check number. The cashier keys in the sale amount. The check scanning program then does a search of the bad check writer's database. If you are not a frequent check writer you may be asked to present an ID. This is simply because you have no check writing history, or the amount of the sale is over a certain amount. If your account has no flags, the check information is stored and your check is imprinted with a statement showing that the payment has been converted electronically. The cashier then returns your check back to you.
  
  

What Happens After I Leave the Store?

• At the end of the day, the retailer will run a process that batches or totals all of the check transactions for that day. The transactions are sent electronically to the bank. A debit for the sale amount will now appear on your bank account. A credit for the amount appears in the retailer's account. Of course, the timing of this varies depending on when the retailer chooses to send the transactions and the type of machine used. Either way, you can expect your account to be debited quicker than with an average check. Because of this, it is important to have funds available in your account.
  
  

Who Is Using Electronic Check Conversion?

• Local retailers are not the only ones using this technology. Many utility companies, insurance providers and credit card companies employ this technology. Using check conversion allows them to avoid costly trips to the bank and saves on bank processing fees. If a company is converting your check to an electronic payment, they will usually notify you on your billing statement. They will not return your check to you. In most cases the checks are destroyed after conversion.
  
  

What Is Check 21?

• Check 21 is a federal law governing electronic payments. As mentioned previously, your check isn't returned when a utility company or insurance company converts your check electronically. If you normally receive your cancelled checks in your bank statements, then you may be in for a surprise. Under Check 21 the bank does not have to give you the original check back; they can give you an electronic substitute. This law was put into place because in some cases the banks do not have the cancelled check to give to you. Also, it would take longer processing times to get the cancelled checks, so the bank sends electronic copies of the checks.