No Check, Please | Small businesses rethink payment policies
At Exceptional Auto Body in Framingham, customers used to be able to pay for repairs with a check. In 2008, that changed.
“There was kind of a run of bad checks over a few months,” said Lisa Sheahan, the business’s office manager. “We just decided — to make it easier on everybody — not to do it any longer.”
Exceptional is, as it turns out, not that exceptional, at least when it comes to its check policy. Bounced checks are a longstanding bane for many retailers, who dread the hassle and expense of tracking down the customers who pass them. And as credit and debit cards have saturated most companies’ customer bases, there is less and less need to put up with checks at all.
Time Waster
Sheahan said each time Exceptional got a bad check, the staff would call the customer and ask them to bring in cash or a money order. If that didn’t work, they might eventually try small claims court. But between paying filing fees and taking the time away from the office to go to court, that rarely ended up looking like a cost-effective solution.
“Sometimes you just end up eating the cost,” Sheahan said.
Brian P. Tanguay, the owner of Tanguay Jewelers in Gardner, said he tried pursuing check-bouncers in small claims court and found that all they had to do to get out of paying was fail to show up for their court dates.
“Nothing happens,” he said. “People are walking around with my gold bracelets and watches, and things I’ve had to repair for them, and they don’t have to pay for them.”
So, a little over a year ago, Tanguay also stopped taking checks.
Valerie Swett, the owner of Premier Cleaning Co., a house cleaning service in Leominster, said she has to accept checks because clients typically leave payment on a table for their cleaners. But she said she does try to get cash or bank checks for some one-time clients, like people who are moving out of a house and want it cleaned before they go.
And when Swett started a second Leominster business six years ago — Queen B’s Boutique — she immediately implemented a policy of not accepting checks. She said she hasn’t received any backlash from her customers.
“Most people have a debit card or a credit card,” she said.
Bad Math, Bad Behavior
As the economy tanked in 2008, some merchants saw the bad checks multiplying. John Wyka, owner of West Boylston Seafood Co. in Worcester, said he had more checks bounce as customers' bank accounts waned, and he said the bad economy seemed to make some people’s moral judgment falter.
The business owners generally say they think check-bouncers are a mixed group. Some simply balanced their checkbooks wrong and are willing to repay what they owe right away. Others are “just pushing their limits,” according to Tanguay. “They know they don’t have enough money to do this. Those you have to wait a long time to get paid back.”
Then, there are outright crooks. Wyka said he’s seen plenty of those.
“It’s very rare that the checks that bounce get paid,” he said. “Maybe half the time those checks aren’t even on real accounts. It’s really fraud.”
West Boylston Seafood hasn’t stopped taking checks, but it’s taken a big step in that direction. About three years ago, between Labor Day and Thanksgiving, the store’s staff wrote down the name of everyone who paid with a check.
“Then, after Dec. 1, we only would take checks from those people,” Wyka said. “That took care of the people who say, ‘We’re here all the time giving you a check.’ ”
But bad experiences with checks are not universal. Anthony Direda, owner of A. Direda Plumbing & Heating in Shrewsbury, said that in his business accepting checks is a necessity, and that’s fine with him since few customers have written him bad checks.
In fact, Direda said he is happy with checks but refuses to take credit cards. For one thing, he doesn’t like paying the 3- to 5-percent fee charged by credit card companies. But he said he also worries about cases he’s heard of where other plumbers accepted credit card payments and later had customers dispute the charges.
“If you take a check and it clears, they can’t come back and say, ‘Oh, I don’t want to pay this guy,’ ” he said.
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