This question relates to Check Cashing storefronts in the US that cater to those without bank accounts and are usually found in greater density in impoverished areas.
I’ve never cashed a check at one of these places. My understanding is that you go in with the check, possibly show ID, and walk out with cash. What happens, practically, if you cash a check and the check is dishonored/bounces later?
I would guess that legally, the store could take you to court and force you to pay. PRACTICALLY, what happens? Do they go after you with the dogs, the bees, and the dogs with bees in their mouths and when they bark they shoot bees at you, or do they write it off as a cost of doing business? I’d guess that, being oriented to the low-end, they wouldn’t have much hesitation to do anything legal they could to get their money back.
I’d guess that unless they copied down your ID information, they wouldn’t be able to find you.
Not sure exactly what you are asking, as there are two somewhat similar types of businesses…at least to the point of dealing with checks.
One is a cash advance type place, where you write them a post-dated check, they give you a lesser amount in cash, and agree to hold your check for a set period of time before depositing it in their own account. In that model, there is no criminal liability, because they knew the check was not good when they accepted it, and they assumed the risk that it would be good at the agreed future date. They probably verify employment before completing the transaction. Normal collection methods still apply according to state law.
The other is a purely check cashing place. You bring them a check, they cash it for a fee. I strongly suspect, although I do not know, that they avoid the problem as much as possible by simply not cashing personal checks. They’ll cash things like payroll checks, government checks, cashiers checks, or checks from a business account. Things that are less likely to be dishonored. Or they could call the bank to verify the funds are available before cashing the check.
I have had a check bounce. I have to say, the folks at the Currency Exchange were far more pleasant and fair than any other business and miles better than any bank I’ve dealt with. It might have been helpful that I did a lot of business with this particular one and had run many thousands of dollars of checks through them over the years.
Now this is the highly regulated business in Illinois, totally unlike the scummy ones I see in Missouri. They are Mom & Pop businesses and require a lot of contact information to cash personal checks.
I thought that (at least in some places) they make you sign up for an ID card for that store, which presumably requires a driver’s license, proof of employment, etc. to get. And (to add injury to injury) they charge you a hefty fee for the ID card, too.
I needed to use one of these places once. I’d received my last check from a company and needed the money to drive back home, unfortunatly, I received the check after my bank closed so I couldn’t deposit it. I went to a local cash checking place and they wanted my drivers licence, credit card numbers and social security number. Then they wanted 10% of the check Finnaly they wouldn’t cash my check until the next day. Since I could go to the bank the next day and not deal with their fees I made them destroy my information and slept in my bank’s parking lot.
At least in my experience they want to know exactly who you are and even then want the check to clear before they will give you any money.
Places like walmart and grocery stores will cash checks, too. And after-hours if they’re a 24 hour place. Just for future reference. I wasn’t able to cash a check at Walmart because the address on my driver’s license didn’t match the address on the check, though (it was my first check at a new job and I had not been able to get my DL address updated yet).
They do charge a fee but you don’t have to jump through very many hoops to do it.
When I had bad credit I used a currency exchange to cash checks. One time my employer bounced a check. The currency exchange guy was nice about it. He just asked that I pay him the fees he incurred.
Of course it helped that I had been dealing with him for over a year.
I recall whenever I would go to a new currency exchange (in Chicago), they had a list of companies in the area. If you had a payroll check from one of those they’d cash it right away. Otherwise they would call the bank, so you could only cash your payroll check during certain times. Then you’d fill out your card and give a state ID or Driver’s license and you’d be on file.
As long as you didn’t screw over the place, if you had a new employer it was no trouble to cash payroll checks. Government checks were cashed immediately with proper ID
It’s technically not a loss leader (cite: personal experience), though the profit is exceedingly low. That said, the reason behind offering the service is much like any traditional loss leader; it’s hoped that customers using that service will spend some of their money in the store, or utilize other financial services offered (putting money on a pre-paid card, paying bills, wiring funds). Wal-Mart actually has offered a check-cashing service for years-- you could cash payroll and government checks at any cash register in 1993, if not before, and regularly ran promotions for tax seasons and tax rebate to cash them for free-- and it leverages stuff that Wal-Mart already has in place (large amounts of cash on hand, check verification services, internal databases of good/bad risk accounts, cashiers), so it’s got an incredibly low overhead, far less than a stand-alone check casher; money wires, money orders, transfers, bill payments, pre-paid cards and such have all been around for a decade. It’s only in the last few years that they’ve formally spun the services off into a separate “department” with its own floor space and such.
We had to return a Christmas gift at Walmart and while waiting in line in the serivce department I read all the signs on the wall about the various financial services that they offer, from check cashing to bill payments to cashiers checks. And they’re cheap too. I dislike Walmart plenty but to see them not be as usurious as most other check cashing places I thought was a pretty cool thing. When I trash my current prepaid debit card (which is linked to my Paypal because Paypal is evil but they don’t like that and will kill the card eventually) I’m going to get the next one from Walmart.