e-Checks at Stores and Offices
More and more stores and even offices such as doctor's offices are taking advantage of the efficiencies and security of electronic payments such as electronic checks.
How does electronic check work?
Q. Who uses electronic checks?
- When you pay by check, the cashier should explain that they are going to charge your account electronically. You'll sign a written authorization to allow this conversion and receive a receipt.
- You get your check back right then and there. The cashier stamps the check so it can't be re-used and returns it to you. (Sometimes this is called "voiding the check" but the word "void" might not be stamped on the check.)
- Record the transaction as you would any other check and keep your voided check to help you reconcile your account with your next statement.
- Remember - use each check only once!
A. All kinds of stores and offices use electronic checks - grocery stores and supermarkets, department stores, utility companies, convenience stores, gas stations, cleaners, all kinds of specialty stores such as jewelry stores; and medical and legal offices.
Q. If my paper check is converted to an "electronic check", when will my account be charged?
A. Generally, your account will be charged one to two business days after the store or office receives your payment - usually about the same as for a paper check.
Q. Who can charge my account using an electronic check?
A. Only stores or offices that you pay by checks can process the check electronically.
Q. Who gives the company permission to electronically charge my account?
A. You do. The store or office has to obtain a signed authorization to electronically charge your account at the time you give them the check.
Q. Do I get a copy of the authorization I signed?
A. Yes, you have to get a copy of the authorization you signed at the time you signed it. Many stores and offices put your copy of the authorization on the receipt. Others use separate pieces of paper.
Q. What if I don't want my check to be "converted"?
A. It's up to the store or office as to whether they require conversion. They might accept the paper check, or they might ask for another form of payment.
Remember, you have to authorize the conversion - in writing.
Q. What happens if I need proof of payment?
A. The IRS established in the 1970s that the listing on your account statement serves as proof of payment.
Q. Will the company I give my check to be able to take additional payments from my account?
A. No. When you authorize a company to convert your check, it is for one payment only.
Q. Can I put a stop payment on this check if I need to?
A. Yes. But contact your financial institution as soon as possible. They need to hear from you before the check reaches your account.
Q. If the payment bounces, can the company add a return fee to the amount of the payment and charge my account for more than the amount of my check?
A. No. The electronic check entry must match the amount of the payment. If the company wants to collect a return check fee, you have to provide express separate authorization.
Q. How will an electronic check appear on my account statement? That is, how will I know if the payment has been charged to my account?
A. If your statement lists checks in one section and electronic transactions - such as debit card and ATM transactions - in another section, then the electronic check will probably be listed with the electronic transactions. You'll see the company name, the check number, the dollar amount and an identifying word such as "PURCHASE" or "PAYMENT" or even "ACH DEBIT."
Q. Since I don't receive my check back in my statement, what happens to the check, and what if I need a copy of it?
A. Remember that you get your check back at the time you wrote it. So you won't need a copy - you'll have the original.
Q. What if I didn't get the check back when I wrote it, and it was converted anyway?
A. In the unlikely event that this happens, contact your financial institution and report the situation.
Q. How do I get a refund if I return what I bought?
A. The store establishes its refund policies and most states require these policies be posted where you can see them. Contact the store directly for questions on refunds.
Q. What do I do if there's an error on my account statement? For example, what if I am charged the wrong amount, or if a payment appears on my statement that I did not authorize?
A. As always, contact your financial institution as soon as you discover an error on your account statement. Federal regulations protect you from "unauthorized" payments. Remember, always review your checking account statement as soon as you get it.