Yes, it only reads the digits. They are much easier to OCR – there are far fewer common ways people write digits compared to letters.
Yes, but now that is mostly done in real-time, nothing physical is forwarded anywhere: the scan of the check is electronically transmitted to some human sitting at a computer, often with 2 or 3 best guesses by the OCR system. The human picks the right one, or types it in, and that is transmitted back to the originating system as the amount. (In the old days, it was fast enough for the machine to imprint that amount on the bottom of the check which was still moving through the machine.) And the human involved may be far away, like in some digital sweatshop in India or China. Also a high percentage of payments are for a specific amount, either the full amount owed or the ‘minimum payment’. Both those are printed on the slip that is included with the check when it’s mailed.
That was probably done by the organization, when preparing the check for deposit, before the bank ever saw it. Lots of businesses & government departments used to have such ‘name stamps’ right at the payment counter.
The short answer to the OP and followup question is that although the common law and the UCC may have specific and/or understood rules on negotiable paper and its validity, in modern commerce, the banks have subscriber agreements and internal policies as to what they will honor.
The common law is good for default rules and makes for interesting first year contracts class in law school, but what you are really bound by is the adhesion contract that you normally click past before checking the “I Agree” box when you sign up online.
Yes, it’s prudent to use the memo line, but no one does.
On discrepancies: per UCC, the longhand (“legal line”) numbers should take precedent over the Arabic numerals, but almost no bank does. Further, pen takes precedence over printed information. (Not a good idea, IMO.) Typewritten is in the middle, if I remember right.
Adding a stamp etc to the front of the check to clarify the payee is technically alteration, but I presume it’s only a no-no if done with fraudulent intent. Not sure of the legal details. The US treasury stamps the front of all their tax payment checks, so it’s probably ok I guess. Do not alter the obverse of a check you receive! It might get you trouble at the bank. If someone writes you a check with the payee field blank, it is a bearer instrument and anyone may negotiate it, even if your teller is confused by it–they *should *give it the bank’s endorsement on the reverse with a note of what account it will be deposited to, but they almost certainly will not–they will just stamp it “deposited to acct of payee.” If you may need a legal record of having received this payment, I’d recommend endorsing it by printing your name, signing your name, writing your routing and account number.
Finally, to answer the question nobody asked: “Who uses checks any more?” The answer is anyone who wants a reliable, time-tested, well-regulated way to make payments and later have proof of those payments that’s easily retrievable even if you keep no records at all. Imagine if you’re paying your landlord cash or bitcoin or something, and suddenly they said you hadn’t paid rent in the last six months. Cleared checks are better than receipts.
A company I worked for had a check reader because I had do process dozens of checks daily. I had to hand feed the checks one by one manually and I could always override the amount the reader displayed. If the OCR couldn’t decipher the amount, the machine would stop and require my manual entry. If I discovered a discrepancy after the checks were transmitted, I had until 6pm to make a verbal correction because at 6PM the scanned chacks were reviewed by human auditors who reviewed all the transactions in and outside of the bank.
Thankfully, the discrepancies were usually no more than a few dollars, but once while reconciling that day’s transmission after 6pm, I found a couple hundred dollar discrepancy in our favor. I called the bank manager the next day, but he said he’d let go because it was already done. No doubt it was because we’d deposit tens and sometimes hundreds of thousands of dollars daily. Sometimes requiring me to go directly to bank because we hit the $250K daily limit on electronic transmissions.
Three years ago I moved from Apartment U3 to Apartment U1 in my complex. My checks are only used for paying rent, and they have my mailing address on them. Until I ran out of that set of pre-printed checks, I put my new apartment number in the memo line, just to ensure it got credited to the right tenant.
While it’s surely easier to forward an image of the check to a human for interpretation, when needed, rather than the piece of paper (because then the human need not be anywhere near the piece of paper, and may indeed be in a low-cost-of-living country on the other side of the globe), it still seems like sometimes examination of the piece of paper would be called for. One can imagine a check written in glitter marker, or the like, where text might appear different in different light or at different angles, and where the difficulty in reading might thus have been at the level of the scan, rather than at the level of the OCR.
For a brief period in my twenties, I was writing checks with a special pen whose ink doesn’t photocopy. I don’t even remember why I was doing this, I believe I read something about how this was more secure in some way. Anyway, I wonder if the check scanners can read that kind of ink. That would be a reason to need to see the original paper.
From what I can tell, Munroe’s check image was not in reference to anything that happened to him, nor was it actually sent to Verizon, it was a comment on this:
where George Vaccaro was quoted a data rate of .002 cents per kilobyte by Verizon, but discovered when he got his bill that it was actually .002 dollars (.2 cents) per kilobyte. In discussions with Verizon, he claims that Verizon was unable to understand the difference between .002 cents and .002 dollars. Munroe was apparently humorously suggesting another transaction that the math-challenged folks at Verizon would have trouble with.