When Is A Check Not A
Check
April
2004
In 2000, consumers wrote nearly 19 billion checks for retail transactions.
The check handling costs and losses totaled more than $23 billion.
As a result, more and more Wisconsin merchants are moving toward a
payment system known as electronic check conversion (ECC).
If you haven’t already
experienced ECC, you may in the near future. Gas stations, particularly
in tourist destinations, and warehouse
retailers like Mounds Pet Food Warehouse in Madison, Middleton, Fitchburg
and Janesville are among the Wisconsin companies now using ECC.
With ECC, your check is used as a source of information. The merchant
scans your check to capture your check number, your account number
and the bank routing number that identifies your financial institution.
Your check is then voided and returned to you.
Automated clearinghouse
rules require the merchant to post a sign that your check may be
used to make an electronic payment from your
account. Funds are usually transferred within 48 hours. If you don’t
want your account used for electronic check conversion, you may want
to pay using a credit card or cash.
Although the paper check is not a method of payment, the data it contains
is used to process the payment information. ECC makes check acceptance
the same as a credit card transaction. It reduces fraud and provides
the merchant faster access to funds. It also saves time and money because
the merchant no longer has to physically deposit checks at the bank.
ECC also helps the consumer.
A paper check is usually handled by several people before it finally
reaches the customer’s bank account,
thereby increasing the possibility of fraud.
With ECC, the cashier scans
the information and returns the check to the customer. ECC minimizes
fraud risk because checks can be verified
at the point of purchase against closed accounts or accounts with bad-risk
histories. When fraud is diminished, everyone benefits — the
Wisconsin consumer, the merchant and the financial institution.
Hints for Handling ECC Payments
- Maintain adequate
funds in your account to cover the cost of your purchases.
- Be sure the
clerk returns your voided check to you.
- Make sure you
enter the purchase in your check registry.
- When you reconcile
your bank statement, expect the item to show up in the section
for electronic items (like ATM withdrawals).
If you have any questions on electronic check conversion, contact
your Wisconsin community bank or other financial institution.
Provided as a public service by
the Community Bankers of Wisconsin (CBW)
