When you go to cash a check at your local check cashing place and you notice that there are signs all over that say, “We do not cash pre-endorsed Checks”, you might wonder, what does that mean and why is that a policy? The short answer is, thanks to unscrupulous people taking advantage of technology, most, if not all check cashing services in Maryland have been forced to adopt this policy.
Around 10 years ago, larger banks started to offer the ability to capture an image of a check using a smart phone to merely snap a photo to deposit electronically as a substitute for a physical check deposit – also known as an “e-deposit”. This quickly became quite popular for users as it was quick , convenient, and helped alleviate unnecessary trips to the bank or atm machine. With an electronic deposit, banks put a longer than usual hold on availability of funds until that check cleared, and that meant about 3-5 days back then. If you were not in a hurry to access those funds, then it was ideal. Fast track to today, banks can now release funds on an e-deposited check the very next business day… If you have enough money in the account already… and if the next day is not a weekend or holiday.
As with all new things, a whole set of new challenges became very troublesome for check cashers and consumers alike. Check cashers were experiencing a high rate of checks returning non-negotiable due to the physical check they had cashed had also been previously submitted via e-deposit, and those funds were already drawn.
For consumers, it was becoming more difficult to cash checks that they had signed before presenting it for payment, because check cashers were not accepting pre-endorsed/signed checks for fear that the check may have already been submitted electronically.
We know from experience, that some check cashers (Walmart for instance) require the customer to sign the check before it is verified. We also have many people come in who have tried to e-deposit their check only to find out that the bank was going to put a long hold on their funds, and decided they needed to access their cash faster by going to a check cashing store. Either situation can cause frustration.
ChexTop was one of the first check cashers in Maryland to stop accepting pre-endorsed checks even though other check cashers continued to accept them. It is now a normal business practice industry wide to refuse to cash pre-endorsed checks.
Once again ahead of the industry, ChexTop just implemented a new policy for accepting pre-endorsed checks. Although we still want our customers to not sign their check until we know that we can cash it, if you do have a check that is pre-endorsed we may be able to cash it anyway!
Please call us for more information! 410-439-2274