What Is a Returned Check?

A returned check—also known as a bounced check—happens when your bank refuses to process a check you’ve written. This usually comes down to not having enough money in your account, but it can also happen if there’s a mistake on the check or the account is closed.

Returned checks can lead to fees, frustration, and even legal headaches if you’re not careful. Here’s what you need to know about why checks get returned, what to do if it happens, and how to keep it from happening in the first place.

How Returned Checks Work

A returned check is a check your bank won’t pay, usually because there isn’t enough money in your account or something is wrong with the check details. Instead of the money going through, the check “bounces” back to you, often with added fees and frustration for everyone involved.

Returned checks aren’t rare, but they can cause problems for both the person who wrote the check and the person expecting payment. Knowing how they work can help you avoid surprises and keep your account in good standing.

Why do checks get returned?

Banks and credit unions can return a check for several reasons:

• Not enough money in the checking account to cover the payment
• The check was post-dated and deposited before that date
• The account was closed before the check was processed
• The signature on the check doesn’t match the one on file
• A stop payment order was placed on the check
• The account is frozen due to fraud or legal issues
• Mistakes on the check, such as a wrong account or routing number

Most returned checks happen because of insufficient funds, but errors or mix-ups can trigger them too. Regularly checking your account and double-checking details before you write a check can help you avoid this hassle.

What happens when a check is returned?

When a bank returns a check, both the person who wrote the check and the person who tried to deposit it can face problems. The impact depends on which side of the transaction you’re on, but either way, it usually means lost money, extra fees, and hassle. Here’s what you can expect in each situation.

If You Write a Returned Check

When your check bounces, your bank will likely charge a non-sufficient funds fee. The person you wrote the check to may also get hit with a fee and won’t receive their money. If you don’t resolve the issue quickly, your account could be flagged for risky activity, making it harder to use checks in the future. In some cases, repeated bounced checks may even get your account closed or reported to a consumer reporting agency.

If You Receive a Returned Check

If a check you deposit is returned, your bank will take the money back out of your account and might charge you a returned check fee. You’ll need to reach out to the check writer to get paid. If they don’t make it right, you might have to take additional steps to recover the money. For businesses, frequent returned checks can create ongoing problems for cash flow and record-keeping.

Returned Check Fees and Consequences

Dealing with a returned check can be frustrating, and the fallout is more than just inconvenience. Both parties can end up paying fees, and there may be other negative outcomes. Here’s what can happen when a check is returned:

• Non-sufficient funds fee or returned check fee: You may have to pay extra charges to your bank if your check bounces.
• Recipient bank fee: The person who receives the check might also get charged a fee by their own bank.
• Strained relationships: The relationship between the check writer and the recipient can suffer if payment isn’t resolved quickly.
• Account issues: Repeated returned checks can lead to your account being flagged or even closed by your bank.
• Legal problems: Writing bad checks on purpose or over and over can sometimes result in legal trouble.
• Credit score impact: Most returned checks don’t show up on your credit report, but if the unpaid debt goes to collections, it could hurt your credit score.

How to Fix a Returned Check

Having a check returned doesn’t have to turn into a major problem if you act quickly. The steps you take depend on whether you wrote the check or tried to deposit it.

If You Wrote the Returned Check

• Contact your bank right away to find out why the check was returned.
• Pay any fees your bank has charged.
• Make sure there are enough funds in your account before you issue another payment.
• Let the person you wrote the check to know about the situation and arrange a new payment.

If You Received a Returned Check

• Your bank will notify you if a check you deposited has been returned.
• Contact the check writer to let them know about the issue.
• Ask the check writer to provide an alternate form of payment.
• Keep track of any fees your bank has charged and request reimbursement if appropriate.
• If the payment isn’t resolved, consider whether further action is necessary, such as sending a formal payment request.

How to Avoid Returned Checks

A little planning can help you steer clear of returned checks altogether. Here are some simple ways to avoid the hassle:

• Keep your checking account balance up to date: Always know how much money is available before writing a check.
• Set up account alerts: Get notifications for low balances or large transactions so you can catch issues early.
• Use overdraft protection: If your bank offers it, consider using overdraft protection, but check the terms so you’re aware of any fees.
• Double-check your check details: Make sure account and routing numbers are correct before handing over a check.
• Skip post-dated checks: Avoid writing post-dated checks and ensure your signature matches what’s on file with your bank.
• Choose safer payment methods: Consider using electronic payments, debit cards, or other secure options instead of paper checks, especially for bigger transactions.

Should you still write checks?

While digital payments are often faster and more secure, checks still have their place. Here’s when a check can make sense, and when you might want to use another method:

• Paying rent to a landlord who only accepts checks
• Mailing a payment or gift to someone who doesn’t use digital payments
• Paying certain small businesses or organizations that don’t accept cards or transfers
• Making a payment that requires a paper record or physical documentation

For most other situations—like paying bills, sending money to friends, or shopping—electronic payments, debit cards, and bank transfers are usually quicker, safer, and easier to track.

Final Thoughts

Returned checks can be a hassle, but they’re easy to avoid with a little planning. Keep an eye on your account balance, double-check your details before writing a check, and consider using digital payments for added security.

If you do end up with a returned check, act quickly to fix the situation and avoid bigger problems. Staying proactive can help you sidestep fees, protect your relationships, and keep your finances on track.