I recently sold an item on eBay. I’ve sold stuff a lot in the past, but I’ve not yet run into this problem.
The guy who bought my item sent a personal check. I’ve always received guaranteed funds before, mainly because most eBayers know that it’s preferred. And they know that personal checks slow down a transaction (most people are impatient when they buy things).
But, here I have received a personal check. It came too late to deposit yesterday, so I’ll put it in the bank Monday morning. I realize that the buyer has technically violated my terms of sale…but it’s seriously not worth the hassle of sending back his $30 check to ask for a money order. However, I specifically did not click “Personal Check” as an option when I submitted the auction, because I don’t want to deal with waiting for it to clear, etc.
But I realize now that I don’t even know how to wait for it to clear. I do know this much: When I go to the bank and deposit it, it will show up instantly in my account. If it bounces, it will come back out. But if it doesn’t nothing further will happen. All this I can see by checking my online account info.
So how do I know that I’ve waited long enough? And how long is usually enough? Is there ever a positive sign that the check cleared his bank?
The bank can tell you when the funds have been deposited by the bank the check was written on. Generally, your bank will give you immediate access to funds from an instrument like this as long as you have the money in your account to cover it if it bounces. You’ll just have to find out what the normal wait time is - usually about ten days - and then call them.
Over here they tend to clear within 3-4 working days. The remitting bank shouldn’t decline the cheque after that… although on rare occasions they will…
To be honest I find with ebay unless it’s a high value item it’s best to take the chance and dispatch it. I would in the future though mention that you don’t want cheques and then if anyone sends you one simply tear it up and send it back.
Federal regulations specify the amount of time banks can take to credit funds into your account. With some exceptions for new accounts, $100.00 of the day’s deposits must be available the next day. This does not mean the funds are good, and if the check is bad, the bank will take the funds back out. Of course, your bank can’t determine if the funds are bad; the check must get to the check writer’s bank. Then the check goes back to your bank and your bank must match the check up with your deposit. The process can take longer than 3 or 4 days. I don’t know how long the return check process takes, and anyway, it’s been about 10 years since I worked in check processing; the process may have been streamlined. But the bank can and will debit the funds back out of your account, and they will charge you for depositing a bad check.
For those unfamiliar with “Check 21” (I knew of the law but not the nickname) here’s an article about it. Pretty much any check can clear close to instantly, if I’m understanding everything correctly. Your bank sends an image to the other bank who can approve or decline it based on the image. So checks could conceivably clear the same day you deposit them.
Some online banking systems – and a lot of ATMs – will show you a different “Balance” and “Available Balance” – the larger number will represent your balance with the deposit acknowledged , and the smaller one won’t catch up until the check itself has cleared.
Your best bet is to call the bank every morning just to be sure.
As for Check 21, which provides guidelines for “e-mailing” scanned images of checks between banks instead of physically shipping the check, the two largest banks that recently started exchanging images (JP Morgan Chase and Key Bank) have settled their transactions on the next business day, not same-day. So even in this high-tech world, there’s still some lag.
I think the next two giant banks to start are going to be Bank of America and Wachovia, but the schedule has changed quite often, so don’t hold me to that.
No bank is actually required to comply with Check 21 though, and while yes some banks have started exchanging a handful of check images already, the guidelines themselves don’t go into effect until Oct. 28.
So chances are you’re still going to have to wait several days for the personal check from your eBay buyer to clear, no matter who the two of you bank with.
Your bank making funds available in your account DOES NOT mean that the check is good.
Your bank has the option of making the funds available to you, then debiting your account later if it discovers there is a problem with the deposit you have made.
There is a specified deadline beyond which they may not dishonor the check, but all of this is highly variable based on a number of rather byzantine Federal Reserve and Uniform Commercial Code rules and regulations.
Bottom line, deposit the check. Don’t ship merchandise until you call your bank and ask them if there is ANY chance of them dishonoring the check, and they say “no”.
I’m not certain, but that may take 16 days.
I suggest contacting your banker Monday morning. I also suggest offerring to your seller the option of submitting another form of payment to ensure quicker delivery. Hate to wind up with a negative seller rating due to this.
If the Dope can’t answer this for you, www.bankersonline.com discussion forums “Ask A Banker” has bank compliance officers who’ll answer your question… off the top of their heads, accurately, and in their sleep.
It’s been quite a few years since I handled check processing, so things may be a little faster now, but in general, the drawee bank has 24 hours to dishonor a check. Your bank will know if a check has been dishonored by the drawee bank (i.e., insufficient funds; invalid account) within 5 days (3 days if issued locally). You probably will not know until you receive the check back in the mail unless you call the bank or otherwise check your recent activity. Your bank has 24 hours after notice of dishonor to reverse the credit to your account.
These 24-hour limitations are those of the clearing house system.
Now, as a bank customer, the account holder of the check has up to 30-days after the transaction appears on his bank statement to protest the check as forged or otherwise unauthorized. If the account holder protests the check within this time frame, the bank will probably attempt to automatically reverse the transaction. Your bank may or may not automatically reverse the transaction out of your account. After that time limitation, the issuer is expected to deal directly with the person cashing the check to obtain reimbursement.
As with anything, there are exceptions to the general rules and things may have changed a bit since I was last involved in banking.
Well, if you hadn’t already deposited the check you could have called HIS bank to see if the funds were there. Now, this doesn’t mean they will still be there by the time the check itself gets there. But it does give you somewhat a piece of mind.
I used to have a bussiness account that would notify me when personal check cleared (or didn’t clear) not sure if you can get this on a regular account though.