Check-Cashing Places--Do the checks necessarily go back to the writer's account?

[HTX]

I ask the above question because we all know that banks routinely routine cancelled/stamped checks after passing thru various hands back to the originating bank (so you can see where it was cashed). But, I wanted to find real-life people's experiences on the following: When you've cashed checks at check-cashing shops, do those checks always (or rarely) go back to the original bank either electronically or physically, thereby revealing the check-cashing locatoin (eg to creditors)? I've heard things like "they usually keep them for their own records"...which is not to say that they don't send an electronic version off thru the system that does get back. So, I guess just curious how easy and how common it is to be able to locate the check-cashing joint, and wanted to ask many of the posters here if they could share their experiences re whether those checks always, sometimes, rarely get back to the writer's bank where they can then just flip it over and "gotcha!" in the case of collectors. I ask because many collectors have told me that check-cashing places are a pretty wise bet when it comes to levy etc. The point is that, even though they can't intercept your money as the teller hands it to you, could they, by way of above, get the name of the branch and subpoena it for all the checks cashed for you, run totals, etc. That can be a greater danger. Just curious about all your thoughs and any experiences out there.

[frogger]

Checks go back to the original bank unless they are turned into an ach payment.

Ever been to Wally-World, gave them a check, let them run it, and then they give it right back to you? Your check just got turned into an ach payment.

Ach transactions are becoming more and more popular with merchants because they come first when clearing your checking account, ahead of all of the checks & debits.

Many companies are turning your checks into ach payments, and many more are signing up to do that.

[HTX]

Ach

Ok, then, same question: If the shop submits it as ACH, does the original check-writer see the name of the shop that cashed it since they won't get the actual check back to view the stamp on the back?
thx

[free2breathe]

Yes, it would show up on your bank statement if the check is processed via ACH. Most "check cashing" joints that offer a loan of sorts will hold your check until the date you are to return to pay back the loan. In that case, nothing ever shows up on your bank statment as they return the voided check to you at that point.

If, however, you don't turn up to pay back the loan, they can then send your check thorugh either via ACH or actually depositing the check in their account. The agreement you sign with them will have a paragraph stating what rights they retain as to collecting on that check. So if you are asking if you can get a loan at a check cashing place and nobody will ever know you did it, the answer is yes IF you pay back the loan on time. Otherwise, it can certainly be tracked back to the company.

[HTX]

thanks but my question was different

thanks for your effort. Yes, I'm familiar with that routine (re people who get a cash advance off their paycheck-to-be & similar scenarios eg Payday etc). Rather, I'm asking not about paychecks but re personal or business checks made out to you. If the shop submits it as ACH, does the original check-writer (customer) see the name of the shop that cashed it since they won't get the actual check back to view the stamp on the back? Wondering if anyone or a few people have actual experience they can share with this particular scenario. Thank you.

[free2breathe]

Ahhhh, ok. Well, a check presented in that manner to be cashed at a check cashing business then goes through the normal routine of being deposited at the check cashing business' bank. Those checks go through the usual process that any check goes through, they end up at the bank they are drawn on with all of the depository stamps on the back of them. If the owner of the original check wants a copy, they can get it, and yes, it would show where that check was originally cashed.

eta: When I write a check to someone, I can actually pull up the check image online. It's very easy to see where it was originally processed without even waiting for the bank to research it.

[HTX]

ok then...

how do you know that they haven't opted to submit their checks to their bank via ACH? If the answer is that "the same info is transmitted", then I'll have a friend write me a small check and see how it comes back. That'll be the best solution of course.

[free2breathe]

ACH doesn't work that way. If you go into Walmart or a Check Cashing store and use your OWN check, you are authorizing the business to process your check via ACH. However, when you cash a physical check from someone else at a business, they still actually deposit that check with their banking institution. ACH requires authorization of the originator of the payment, so it doesn't work the same with a 3rd party check cashing.

[HTX]

so...

in regards to the big picture & my question, what's the difference, ie what info is NOT transmitted that would be via physical deposit of check? Anyway, my understanding is that a business, using ACH, can literally discard the physical check, once processed, since there's no longer a need for it if ACH is "just as good" and has been processed. So these questions remain:

1. It's still unclear whether check-cashing places necessarily deposit OR hold onto the physical copies of the check (since they would have no reason to submit them having already submitted them via ACH).

2. So do they all necessarily submit the physical checks too? If so, why? If not, why not?

3. What info (if any) is NOT submitted via ACH that would be submitted via physical check presentation IF they held onto the actual check for example.

[free2breathe]

Ok, you're missing something here. They cannot CHOOSE to deposit via ACH without the authorization of the original writer of the check. Your friend writes you the check. You take it to a check cashing store. They can't just process that via ACH because you are cashing it there. They have to deposit the physical check at their bank and it goes through the process.

On the other hand, you go into a check cashing store or retail store with your OWN check, and they process it via ACH and hand you your check back. A business cannot both KEEP a check and process it with ACH. They either process it via ACH and hand it back to you, or they deposit it in their bank account. Because it requires the authorization of the writer of the check (when you are at a retail store that uses ACH, you are given your check back, sign their authorization to ACH the check and be done with it), the check cashing company cannot ACH a 3rd party check.

As far as what information is transferred via ACH. Think about a physical check. The numbers across the bottom are the routing number which identifies the bank the check is drawn on, the account number which identifies your account, and the check number. Those are read by the electronic system the store uses (cash register or check reading machine). When it hits your bank, the information as to where it was presented from is electronically stored as well. You can look at your account and see that the transaction was processed by Walmart, for instance.

However, the fact remains that a 3rd party check still has to be depositied physically at a bank.

[free2breathe]

The technology is out there for companies to start electronically scanning check images, but it's not widely in practice at this time. Those companies that can afford the technology scan the check electronically. My point is that at this time, it's not used very often by the average retailer/shopkeeper.

So for the purpose of your question, at this time it is still easy for the original writer of a check to see where that instrument was cashed by looking at the image of the check online or through their bank's research department. I hope that helps.

[free2breathe]

Here is better definition of ACH and Check21, which are the two common processes of check processing:

Both ACH and Check 21 transmit check payments electronically. There are 2 differentiating factors that define whether a check is sent through as a Check 21 or an ACH transaction.

1.Type of Check
a.ACH = Consumer Checks Only
b.Check 21 = Business, Bill Pay, Cashier, Money Order, Travelers, Official, Third Party, Credit Card and Government checks And consumer check writers that have requested to opt out of ACH processing. These checks can be rerouted and sent through as a Check 21 transaction.
2.Transmittal Method
a.ACH – Image of the check is captured, but only the MICR line data (Bank Account DDA and Routing Number) is transmitted.
b.Check 21 – Image of the front and back of the check is captured. The image plus the MICR line data (Bank Account DDA and Routing Number) is transmitted.

[HTX]

Thanking you so much.

[HTX]

They cannot CHOOSE to deposit via ACH without the authorization of the original writer of the check. Your friend writes you the check. You take it to a check cashing store. They can't just process that via ACH because you are cashing it there. They have to deposit the physical check at their bank and it goes through the process.

So are you saying that check-cashing places do NOT process checks written to you or your business via ACH but always by physical deposit, essentially walking in their checks to their own bank? It seems that the potential for abuse would be way too high if that were the case. ACH is so much faster for funds verification and actual funding, isn't it? They'd get screwed all the time if that were the case, don't you think? I don't pretend to be asking original, groundbreaking questions. I'm sure the system is already in place protecting such places. I know when the shop verifies a check, they simply (sometimes) call the writer and asks them if they did indeed write a check for that amount to me, on what day, and sometimes verify the routing/acct#. But that's it. I never hear them ask "is it ok if we process this electronically?" I've always assumed that at least they process electronically (ACH) and wasn't sure if they also did physically, just for their own security and peace of mind.

Thanks, btw, if a customer submits a check by mail to me or my business, am I required to get the customer's approval for ACH? And if ACH is selected, do I necessarily have to return the check to them or can I discard it? Thanks again.

[debee]

could they ... get the name of the branch and subpoena it for all the checks cashed for you, run totals, etc. That can be a greater danger

What's the danger in someone getting a subpoena to find out how many checks you cashed, or what the total dollar value was?