What Happens if a Check Bounces? Tips on What to Do Next

By Jacqueline DeMarco · February 27, 2024 · 8 minute read

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What Happens if a Check Bounces? Tips on What to Do Next

When a check bounces, no money is transferred. The person who was expecting to be paid doesn’t receive their funds, which can have significant ramifications.

This situation can start innocently enough. Sure, accidents happen, and all of us make mistakes. If someone writes a check and doesn’t realize they don’t have enough funds in their checking account for the check to clear, they may end up bouncing one or more checks. Fees may start to pile up too. Whether it’s a rookie mistake or fraudulent activity, bounced checks require action to resolve the situation and avoid more charges.

Key Points

•   When a check bounces, the person expecting payment doesn’t receive funds, leading to significant consequences.

•   Bounced checks can occur due to insufficient funds, errors in writing the check, closed accounts, stop payment orders, old checks, or fraud.

•   Bounced checks result in fees for both the check writer and the recipient, such as overdraft fees and returned check fees.

•   If a check bounces, the check writer may face additional charges, while the recipient should contact the check writer to resolve the issue.

•   Bounced checks typically do not directly impact credit scores but can lead to missed payments and potential legal consequences.

Why Do Checks Bounce?

When a check bounces, that means it can’t be processed or paid. Checks can bounce for a few reasons. Banks or credit unions may not be able to process a check if any of the following issues occur.

•   The account associated with the check didn’t have sufficient funds in it to fulfill the deposit needs.

•   An error occurred when the check was written (mismatched amount box and amount line, a misspelling in the recipient’s name, etc.).

•   The checking account of the check writer had been closed.

•   A stop payment order was issued on the check.

•   The check is too old (most checks aren’t honored after six months).

•   The check is fraudulent.

What Fees Come With Bounced Checks?

If someone writes a check that bounces (also known as a bad check), their bank may charge them fees. Typically, this will be an overdraft fee or a nonsufficient funds fee if the cause of the bounce was not having enough money in their checking account. These fees are often about $35 per instance, and the merchant who received the check that bounced can charge another $20 to $40 fee.

On the flip side, if someone receives a check that bounced, their bank may charge them a returned check fee. This also may cost about $30 or $35 (or more) per instance.

What Should I Do If My Check Bounces?

What happens if you bounce a check? There are a few different scenarios to consider here:

•   If you have overdraft protection, your bank may transfer the funds to cover the transaction. Your check doesn’t exactly bounce in this case, but you will be paying fees for the privilege of not having the check returned. If you have linked your checking account to another backup account, the check should also be paid, even if you don’t have enough money in your bank account to pay it.

•   If your bank doesn’t cover the check, here’s what happens when your check bounces: It will head back to you, unpaid. You will typically be charged a nonsufficient funds fee or returned check fee. Was your check heading to a merchant or business? They might hit you with a fee as well, to compensate them for the inconvenience. You’ll likely want to rectify the situation as soon as possible. If your account is overdue, the company you were paying may be able to charge late fees or send the account to collections.

What Should I Do if I Receive a Bounced Check?

On the flip side, what happens if a check you deposit or a check you signed over to another person bounces? Your next step after you realize the check is not going to be paid is to contact the check writer. Either request a new check or a different type of payment. Ideally, this issue will be resolved after the first conversation, but if not, the recipient can take the following steps to get a paper trail of the current status of their payment.

•   Write a demand letter and send it via certified mail.

•   Include the check amount, the date it was written, and any fees paid because of the bounced check. Request the amount that is owed.

•   Save a copy of this letter as it can be helpful to have on hand if legal action is pursued.

Do Bounced Checks Affect My Credit Score?

No, bounced checks typically don’t affect credit scores. They are not reported to the three major consumer credit bureaus (Equifax, Experian, and TransUnion). However, if someone misses a payment because a check they wrote bounced and they failed to follow up and make their account current (such as with a credit card payment) that could lead to their credit score being damaged and the debt they owe being sent to collections. Also, bounced checks may negatively impact your checking report (say, the one compiled by ChexSystems), which could make it harder for you to open a bank account in the future. You might need to, say, open a second chance bank account vs. standard bank account.

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Legal Consequences to Bounced Checks

While many bounced check issues can be resolved quickly, in some cases, the situation can escalate and lead to legal consequences. These are two different types of legal issues that can arise after someone writes a bad check. Here’s a closer look.

Civil Charges

In most states, writing bad checks is a misdemeanor. If a person is found guilty, they may have to pay the amount of the check’s value, or a multiple of that, or the check’s amount as well as legal and court fees.

Criminal Charges

An average bounced check caused by not having enough funds in a checking account likely won’t lead to criminal charges. However, in some states, writing a bad check (especially one that exceeds a specified dollar amount) can be considered a felony, lead to jail time, and result in paying thousands of dollars in fees. While an occasional accidental bounced check may be able to be cleared up, repeat offenses are the ones that risk criminal charges.

Preventing a Check From Bouncing

The best way to prevent a check from bouncing? Make sure the checking account linked to the check has enough cash in it to cover the check from the available funds. It’s also important to double-check that the account will have enough money in it in a few days or weeks (depending on how long it takes the recipient to cash the check) to make sure an accidental overdraft doesn’t happen. This is a common scenario: Someone will write a check and forget about it, mistakenly assuming it’s been cashed. In reality, the recipient holds onto the check or maybe the check was lost in the mail for a while. Then, the recipient deposits the outstanding check weeks later, when there isn’t enough money to cover it.

Another way to cover yourself is to sign up for overdraft protection or link your checking account to a backup account, which can fund a check that is at risk of bouncing.

Using a P2P payment method like Venmo or ApplePay instead of a check can help avoid the potential of a bounced check altogether. With P2P models, money can’t be transferred to the recipient unless it is already in the payer’s account. As an added bonus, you don’t have to carry around a checkbook.

Consumers also have the option to use a certified check or cashier’s check to make the payment process more secure.

The Takeaway

Checks can bounce for many reasons, but typically this occurs when a person writes a check without making sure they have enough funds to cover the amount. Perhaps they forgot to move enough money from their savings account into their checking account or overlooked the fact that some automatic deductions were coming up. For these reasons, keeping a close eye on your checking account balance is an important step to your financial health. Writing or receiving a bounced check can result in fees for both parties involved and can create a lot of unnecessary stress.

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Who gets charged for a bounced check?

Unfortunately, both the check writer and the recipient often have to pay a fee if a check bounces. The person who wrote the check may have to pay an overdraft fee or a nonsufficient funds fee. The recipient of the bounced check may be charged a returned check fee as well.

Can you get in trouble for depositing a check that bounces?

It is possible to get in trouble for depositing a check that bounces. Your bank may charge you a returned check fee even though it wasn’t your fault that the check bounced. There are steps you can take to verify a check before depositing it.

How long does it take for a bad check to bounce?

It can take a few days for a check to clear or, in the case of a bad check, not to clear. It’s best to wait up to five days after depositing a check to make sure it doesn’t bounce.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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