CrossCheck Blog

In 1962, ABC broadcasted its first program ever in color. The show was called The Jetsons. As remarkable as that achievement was for the times, the animated sitcom was cancelled after only 24 episodes. In the 1980s, The Jetsons was revived for two short years before being shelved decades ahead of technologies such as digital cameras, cell phones, and virtual auto dealer options. Thankfully through syndication, reruns aired for a generation.

Hanna-Barbera Productions cartooned unthinkable technology in each futuristic episode. Below is a short list of “FAR OUT” technology available only to George Jetson (and in the imagination of the writers) a half century ago that actually exists today. And with the recent successful takeoff and landing of an automobile on August 25, 2020 in Japan, the list just got a little longer.

Nearly anyone can inadvertently write one bad check for insufficient funds, but doing it intentionally on a repeat basis constitutes check fraud. Also known as paperhanging, this type of crime is joined by a handful of other check fraud classifications.

According to a report by the American Bankers Association (ABA), total check fraud attempts have reached a new all-time high in value: $15.8 billion in 2018 compared to just $8.5 billion in 2016. The ABA continued by saying that the financial loss from successful check fraud attempts rose from $789 million in 2016 to $1.3 billion in 2018.

The ABA also said check fraud has been on the rise over the last 30 years due to digital channels. Is there a silver lining to this dark cloud? The answer is that U.S. banks prevent over 90% of check fraud attempts via early detection methods.

Article Summary

• Types of Check Fraud
• Check Fraud in Relation to the History of Checks
• What Are the Penalties for Check Fraud?
• In Closing

When it comes to the question, “Guarantee or Verification?” there is no single right answer. Each merchant has different needs. Both services help businesses increase sales and mitigate risk, but there are fundamental differences.

Verification is basically professional advice that works best for some merchants, but they will need to conduct their own collections if a check fails. Others will opt for check guarantee — the assurance that even if the check bounces, the sale will hold, the merchant will get paid, and the consumer will be given another chance to make good. The merchant is free to choose either one, but normally the choice depends on the amount of the check.

Summary

• Check Guarantee in a Nutshell
• A Place for Check Verification
• Behind the Curtain of Check Verification and Check Guarantee
• The Secret Sauce
• The CrossCheck Solution

If you work in the payments industry, you will regularly hear comments such as, “Checks and cash are going away, and pretty quickly too!” Sometimes we hear random comments such as, “Millennials are not using checks,” because they use smartphones and social media for mobile banking and payments. However, the 2019 Federal Reserve Payments Study shows otherwise. Let’s look at the facts.

Yes, there has been a decline in check usage over the last decade, but the value of check payments is still strong. According to the study, the value of check payments decreased four percent a year from 2015 to 2018. The current study shows a year-to-year drop from 18.1 billion items to 17.3 billion items — hardly a dramatic event. By the way, that is billions.

There are three main providers in the check guarantee business. All have been in business for many years, have seasoned and mature products, and a large book of business that covers the entire country. Naturally, merchants want to know how the top check guarantee companies differ from each other.

Obviously, I cannot speak for the other two providers, but I can offer general information about the industry. While we all provide similar services, the business model for each company is different (see below for "Company Differences" and "The CrossCheck Approach").

The fundamental differences are how the product is sold, who the target market is, how the pricing is determined, the types of hardware supported, how authorizations are handled, how claims are paid, and how responsive customer service is to the merchant.

We get calls from merchants who want to know the difference between check verification and check guarantee. The typical scenario is that the merchant takes a bad check, tries to collect on it themselves, and discovers how difficult it is to do that. Other times, a check is missing from a bank deposit, or the merchant is just tired of taking an hour off to go to the bank every day. They have heard about check service companies and now they want to know how they can benefit from using one.

Article Summary

• Check Verification Versus Check Guarantee
• Basic Check Guarantee
• Electronic Check Processing
• Some Merchants Prefer Checks
• How Check Guarantee Helps Protect Merchants
• How Check Guarantee Helps Consumers
• Additional Protection for Merchants

There are two time-tested ways to deal with this. They are check verification and check guarantee.

The CrossCheck website receives a lot of queries: “Is this a good check?” … “I need to verify a check.” … “I received this check in the mail, is it real?” … and a dozen variations on a weekly basis.

The marketing team responds as follows (or something similar) if the message is from a consumer:

“CrossCheck provides check guarantee and other payments-processing services to merchants via monthly service agreements. We suggest you discuss the situation with the issuing bank. Thanks and good luck.”

Sometimes the messages are disheartening: “Just got burned by a bad check.” If it’s a merchant, we explain that we can’t do anything about that particular check, but we can guarantee future checks to mitigate their losses.

The expected clear skies and 63-degree days make February a great time to be in Las Vegas. Beyond the great weather, 70-plus golf courses and unlimited entertainment, auto dealerships have found a more urgent reason to visit – the 2020 NADA Show. But what exactly are dealers looking for besides a mirage in the desert? The answer is a competitive edge in an industry with ever-increasing challenges.

Some auto dealers bring “a shopping list” because they know exactly what to look for, but others hope to discover any type of advantage that presents itself.

NADA, the National Automobile Dealers Association, is fully aware of the challenges, and has responded with four days of educational programming, a multi-venue exhibitor showcase, franchise meetings, and fun networking events. The 2020 NADA Show takes place Feb. 14 – 17, 2020 at the Las Vegas Convention Center. Those attending the tradeshow include auto industry leaders, manufacturers, exhibitors, experts, and auto dealership management.

“Dealers need to provide customers with a consistent, relevant, seamless experience throughout each stage of purchasing, including the dealership website.” – David Boice

Recently, I attended a webinar given by David Boice, CEO and founder of a company called Advid. It was titled, “Lessons from Amazon Prime: evolving the consumer experience in the digital era.” I thought Mr. Boice had some important things to say about what consumers think and feel when they start their search for a new car, and I wanted to share this with our readers. To understand his message, we have to start at the beginning of the consumer buying experience.

If your business sells building materials to the construction industry, then you already know that it takes a long time to get paid. It doesn’t matter what you sell — lumber, dry wall, plumbing supplies, roofing materials, flooring — the contractors who buy from you have cash-flow issues that they deal with every day.

The 2019 National Construction Payments Report, a survey conducted in collaboration between Levelset and TSheets by Quickbooks, concluded that getting paid in the construction industry is slower than just about every other industry. How slow? The average time to payment is 83 days!