Rules for Accepting Checks

We subscribe to a check guarantee service and pay a percentage of the face value of each check that is authorized in order to guarantee payment. If we accept a check from a customer and get it correctly approved by the check guarantee service, and the check bounces, the service will repay us for the check amount. We use this guarantee service for all checks received from all customers with just a few exceptions.

Employees do not decide whether or not to guarantee a customer’s check. The check is to be guaranteed unless it fits into these few specific exceptions spelled out below. It doesn’t matter if this is your best customer or just spent $10K with you last week. Over the years, it has happened that even very good customers have bounced checks, and there is really no way to collect on a bounced check. That’s why we have the guarantee service.

If any employee does not guarantee a customer’s check or if the rules and information below are not followed, and the check is returned NSF, that employee will be responsible for collecting the funds from the customer. If the funds cannot be collected, that employee will be asked to repay the amount of the check to the company. The sale will also be reversed and deducted from the stats and remain off until the full amount of the check is collected or repaid.

It is the responsibility of the individual receiving the payment by check to make sure this policy is followed, and should any of the rules not be followed that individual will be asked to repay the amount of the check to the company. This is per LHFJ PL “Checks, Responsibility of Accepting.”

Rules for whether or not to guarantee a customer’s check:

1. Customer checks for amounts greater than $100 must be guaranteed by our check guarantee company.
2. If the customer is a first time buyer, any amount, even less than $100 should be cleared through the guarantee service.
3. Checks for less than $100 from repeat customers are not required to be cleared unless the salesperson feels it is necessary or prudent. If in doubt, run it through check guarantee.
4. If the check is for payment on a future sale and there is no merchandise leaving the store for at least 10 days, giving it time to clear in the bank, then it does not have to be guaranteed. This would include Layaway payments, Job Deposits or miscellaneous payments on account.
5. If the check is from Nadine or Carlo Daleo, it does not have to be guaranteed.

Rules for accepting personal checks:

The following rules apply to all checks, whether they are being guaranteed through the service provided or are one of the exceptions mentioned above.

WE DO NOT ACCEPT COMPANY CHECKS UNLESS THAT PERSON’S NAME IS IMPRINTED ON THE CHECK AND THAT PERSON SIGNS THE CHECK.

WE DO NOT ACCEPT BILL-PAY CHECKS (CHECKS CREATED BY THE BANK FROM THE PERSON’S BANK ACCOUNT TO PAY A BILL). BILL-PAY CHECKS ARE NOT SIGNED BY THE CUSTOMER SO WE DO NOT ACCEPT THEM.

On the check itself must appear:

1. DATE – Must be the same date as the invoice transaction and the request for check guarantee (current date).
2. PERSONALIZATION – Customer name must be imprinted on the check. Starter or counter checks are not acceptable.
3. ADDRESS – The address must appear on the check. If it not imprinted it needs to be written in by hand on the check. A PO BOX number does not qualify as a residential address. If the check reflects a PO BOX number only, request the actual residence address and write it on the check.
4. TELEPHONE – A phone number including area code must appear on the check.
5. PAYEE – Leo Hamel Fine Jewelers must appear on this line. Checks made out to “Cash” or “Bearer” cannot be accepted. Never accept “third party” checks. “Third Party” checks are checks made payable to someone other than “Leo Hamel Jewelers” and endorsed on the back.
6. AMOUNT – The dollar amount in numbers and written words must agree.
7. US DOLLARS – The check must be written in US dollars.
8. US OR CANADIAN BANK – The check must be drawn on a United States, Canadian, Puerto Rican, or US Virgin Islands financial institution.
9. SIGNATURE – Check must be signed by the person whose name is imprinted on the check. Compare the signature on the check with the signature on the ID.
10. IDENTIFICATION – Acceptable forms of ID are State Driver’s License, State Issued Identification Card, or Military ID. These must be valid, not expired, or temporary. The customer’s face should match the picture on the ID. Foreign IDs or passports are not accepted.
11. MICR NUMBER – This is the customer account number printed at the bottom of the check. This number must be checked to make sure it is not altered in any way.
12. CORRECTIONS – Erasures and corrections must be properly initialed by the check writer.
13. RECORD OF INFORMATION – Every check accepted must have the following information record on the check (we stamp and fill in or just write with hand-drawn boxes):
    1. State: (ID State of Issuance)
    2. DL#: (Driver’s License Number)
    3. DOB: (Date of Birth)
    4. Auth#: (Check Clearing Authorization Number)
14. CHECK CLEARING – Once the above is complete, follow the exact instructions for the service you are using to guarantee the check. If any of the above steps are omitted, even if the check is cleared with an authorization number, payment will not be received should the check be returned for any reason. It is the responsibility of the individual receiving the check to make sure the above check requirements are verified and recorded.

If the check is declined by the check guarantee service:

If the check is DENIED by the check guarantee company, we cannot accept it for payment except to deposit it and wait for 3 to 10 days for it to clear before delivering the merchandise. Accounting will deposit the check by desktop deposit and then call the issuing bank until it is confirmed that the check has cleared the customer’s account.

There is a slip of paper to hand the customer giving them the contact information for the check guarantee company so that they may inquire why their check was not accepted. The check guarantee company will not tell us why their check was not accepted. Apologize and work with the customer to find another method of payment. For example, we can charge an Am Ex card and credit it back when the check clears, or perhaps open a finance charge account for the customer.

TeleCheck

Currently the check guarantee service in use is TeleCheck, with a limit of $25,000 as of 1-1-20.

Be forewarned that TeleCheck (or any guarantee service) will give an authorization code for check amounts that are higher than this limit and they will charge us the full percentage on the full amount of the check, but that doesn’t mean that they are guaranteeing the higher amount. If the check is returned, they will only repay us up to $25,000.

APPROVAL CODES ON THE TERMINAL ARE ALWAYS 4 DIGITS.

REJECTED CHECKS: If the check guarantee terminal gives a #3 followed by a 7-digit number, this is NOT an approval code – it is called a “Code 3.” Code 3 means that TeleCheck has no negative information on the check writer or company. However, the check falls outside of the established guidelines, and TeleCheck will not guarantee this transaction at this time.

If you see this #3 and a 7-digit number on the terminal, your options are:

1. Take another form of payment
2. Tell the customer the check has to clear first, but don’t release any merchandise.

If a check does bounce:

On occasion customers make mistakes. If a check does not clear for some reason other than “account closed” it will be re-deposited. The salesperson will be asked to call the customer because he or she has the personal relationship with them. If a customer bounces a check and we don’t contact them, they may not want to come back in because they are embarrassed. So even if the check was guaranteed, if it is returned NSF the salesperson will be asked to call their customer.