If you are a merchant, there cannot be too many things that are more aggravating than getting a notice from your bank that you are not going to get paid because a customer put a stop payment on a check written to you.
Your first reaction would probably be surprise, then disappointment, and then anger. “How could they do this to me? … I gave them a good product at a good price and I provided good customer service too.”
As detailed below, there are legitimate reasons for requesting stop payments. On the other hand, writing a check and then stopping payment to avoid getting charged can be considered check fraud, which is a crime actionable at law. Before we get into all that, let’s look at how a merchant-customer relationship is supposed to work.
A company called Astute Solutions lists the six stages of a relationship between buyers and sellers:Awareness — The customer becomes aware of your store and decides to come in and see what you have to offer.
Engagement —The customer walks around the store and may talk to a salesperson or try the merchandise.
Evaluation — The consumer is comparing your store to similar stores they have visited in the past, and is simultaneously making a conscious choice to stay in your store and learn more.
Purchase — This can be a big step, particularly if you are selling a high ticket item like a new car. Not only does the customer want to feel good about their purchase when they make it, they want to feel good about it a month later when all their friends are asking about it.
Product and support experience — Does the customer feel good about buying this particular make, model, car color and all its features?
Bonding — This is really important because merchants live and thrive on repeat business. Today, a consumer might buy a new car every six years, but they might lease a new car every two years. You have put a lot of work into making the sale and you want that consumer to come back to your store the next time they buy a car.
It is really hard to get new customers. A satisfied customer might tell a few friends about the experience, but a dissatisfied customer will tell 10 people, and you don’t want that to happen.
What Can Merchants Do After a Stop Payment?
Once you get over your anger, here is what you need to do.
First, contact the customer if you can. Ask why they put a stop payment on the check. If the customer doesn’t want to talk to you, then ask your bank to contact their bank to find out what the bank was told when the stop was placed. For all you know, they placed a stop because they didn’t have enough money in their account and wanted to avoid a bounced check and then having their bank report them to ChexSystems.
In case you don’t know about ChexSystems, this is about the last possible place you ever want to be. It is a bad check-writer database which is maintained by Fidelity National Information Systems. It keeps track of NSFs, bounced checks, unpaid fees, and collection activity related to your checking accounts. If you are in ChexSystems, you could have difficulty opening a new bank account or getting merchants to accept your check. You will be in the database for five years. One of my friends had her purse stolen and ended up in ChexSystems. She was a member of this dubious “club” for five years in spite of repeated entreaties!
Legitimate Reasons for Stop Payment Orders
Sometimes, the customer had a somewhat valid reason for requesting a stop payment. Perhaps the product failed when they got it home or it didn’t work as advertised. This can happen. You should try to resolve this. If you succeed, then you have a chance to regain the customer relationship and possibly have it over the long term. You want the customer to believe you are trying to understand them and acting fairly — even with some compassion.
Other valid reasons include a lost or stolen checkbook as well as customers who mailed a check to the wrong address, filled it out for the incorrect amount, or made some other error when they wrote it.
How Long Do Stop Payments Last?
Stop payment orders usually last six months. After that, check writers have to renew it. Of course, they can always write “Void after 180 days” on the checks too.
But be aware that going for a full-court press and involving the local district attorney has consequences. This can turn ugly very quickly and you may be reading about it on Yelp, Google reviews, or Facebook. This reminds me of the old adage about attorneys who have a client who won’t pay the bill. It goes, “Go to collection, prepare for a lawsuit!”
What Can Merchants Do Before Receiving Stop Payments?
Well, the simple answer is to use CrossCheck Check Guarantee services in the first place and add Stop Payment protection. Nothing could be easier.
Merchants accept a check payment from a customer and enter five pieces of information to get it authorized. Payments can be authorized over the phone, a payment terminal, or via CrossCheck’s online merchant portal.
Furthermore, merchants using our Remote Deposit Capture service benefit from even greater convenience. They run paper checks through an imager that we provide and give the checks back to the consumer with a receipt. We process the checks and fund merchants accounts so they don’t have to go to the bank.
Finally, merchants using our Stop Payment protection do not have to worry about stop payments anymore. We try to collect from consumers, but we use a kinder, gentler approach that does not get emotional or confrontational. We are going to be better at this than any merchant because returned items are our business. After 35 years, we have a pretty good idea about what to do and what not to do in the collection process.
We are a licensed, bonded, registered collection agency in all 50 states. We also have every possible certification and award in that business, including an “A” rating from the Better Business Bureau — this is unheard of for a collection agency!
If you are a merchant why not get things right the first time around? Use CrossCheck’s Check Guarantee service and ask for Stop Payment protection. You have enough things to worry about and dealing with stop payments should not be one of them. Trust CrossCheck to handle this for you.
Now get out there and bond with your customers!
Download our free guide to learn more about Stop Payment protection.