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What does it mean when a check bounces?

Bounced checks aren’t just inconvenient — they can cost you.

Yahoo Personal Finance· Getty Images
7 min read

If you’ve ever written or received a check that can’t be deposited, you know the mild panic it can cause. Bouncing a check is never fun, and as either party, you may face consequences. Typically, these consequences include fees — but legal action or other long-term ramifications are possible too.

Read on to learn more about bounced checks, their consequences, and how to avoid them.

A bounced check, or rubber check, is a check that can’t be processed for any number of reasons. Often, a check bounces because there isn’t enough money in the check writer’s account. When a check bounces, it’s returned to the issuing bank and the recipient is unable to cash it.

There are several things that happen when a check bounces. If you’re the check writer, you’ll typically have to pay fees, and you may face other consequences.

You may incur a nonsufficient funds (NSF) fee when there isn’t enough money in your account to cover a transaction. While many banks have eliminated these fees, some still charge them, and they can exceed $30.

Overdraft fees may be another consequence of a check bouncing. Banks charge overdraft fees when you don’t have enough money in your account, but your bank still processes the transaction. They typically run around $35.

In addition to bank fees, merchants can also charge processing fees for bounced checks. Limits on these fees vary by state but are typically around $20 to $40.

Writing a bad check, especially repeatedly, can lead merchants or banks to ban you from this type of payment or report you to various agencies.

For example, if you attempt to pay a merchant with a bad check, they may refuse to let you pay by check in the future. If your check ends up in collections, it can show up on your credit report. Finally, your bank could report repeated bounced checks to ChexSystems, a consumer reporting agency banks reference when reviewing account applications.

If you repeatedly write bad checks, your bank may close your account. Having this account closure on your record can make it difficult to open a new account in the future.

If you mistakenly write a check that bounces, you likely won’t face any legal consequences. However, deliberately writing a bad check can lead to criminal penalties. Laws vary by state, and consequences can include additional fees and even jail time.

If you deposit a check that bounces, you — or your bank — may not notice right away. It can take a couple of days for a check to either clear or bounce.

If you deposit a check, spend some of the funds, and the check later bounces, you may be on the hook for paying back the money. You can, however, contact the check writer and ask for reimbursement.

Read more: How long does it take for a check to clear?

A check can bounce for many reasons; these are some of the most common scenarios:

  • Insufficient funds: Checks often bounce because there isn’t enough money in the account to process the transaction. There are many reasons you may have insufficient funds, such as writing a check before your incoming direct deposit clears.

  • Bank account closure: If you or your bank close your account before a check is deposited, the check will bounce.

  • Error on check: Making mistakes or errors when writing a check can lead to a bounced check.

  • Fraudulent check: A common scam involves scammers writing fraudulent checks and asking the recipient to deposit and return some or all of the money before the check bounces. The check will eventually bounce, and the recipient will be on the hook for the funds they lost.

  • Stop payment on check: A stop payment is a request from the account holder for the bank to not process a payment. If someone issues a stop payment on a check before it clears, the check will bounce.

  • Stale check: Personal checks expire, or become “stale,” after six months. So if you try depositing a check dated more than six months ago, it’ll bounce.

If you write a check that bounces, take the following steps to minimize the consequences and make things right:

  • Contact the payee: Let them know about your mistake and explain how you’re handling the situation.

  • Make the payment: Pay the recipient as soon as you’re able, but make sure you have sufficient funds first. You don’t want to risk bouncing another check.

  • Pay fees: You may owe fees to both the merchant and the bank. Settle any fees as soon as possible.

  • Keep detailed records: Record details of the situation, including dates and amounts of payments and fees. This information could come in handy if you ever need to dispute an error.

If you cash a check that bounces, use the following steps to track down the payment:

  • Contact the check writer: Let them know their check bounced. Ask them to check their account balance to see if there’s enough money to process the transaction.

  • Try depositing the check again: If the bounced check was due to insufficient funds, you may need to wait a few days for incoming funds to clear.

  • Send a formal letter: If contacting the check writer and attempting to deposit the check again doesn't work, send a formal letter demanding payment and include details of what happened. You can find templates for writing this type of demand letter online.

  • Take legal action: If you don’t receive payment in response to your letter, you can take legal action and file a court claim.

If you deposit a check that you think may be fraudulent, contact your bank immediately and report the incident to the local authorities and the Federal Trade Commission (FTC).

A returned check is another way to describe a bounced check. When there isn’t enough money in a check writer’s account for the check to clear, the check is returned, or bounced.

A bounced check typically doesn’t hurt your credit, at least not directly. If you write a check that bounces, you’ll be on the hook for fees, but your bank typically won’t report it to the credit bureaus.

However, if you write the check to pay a bill and it bounces, causing you to miss a payment, the creditor — a lender or credit card company, for example — might report the late payment to the credit bureaus.

You can avoid bouncing a check by only accepting checks from people you trust. You can also verify all fields of a check have been filled out when you receive it. To make sure you don’t spend money that never arrives, wait a couple of days to make sure a deposited check doesn’t bounce. Finally, if you’re expecting a large payment via check, you can ask to be paid with a certified check or a cashier’s check, which is guaranteed by the bank.

You can avoid writing a bad check by keeping a close eye on your checking account. Don’t write a check for more than your available balance, even if you expect a deposit to come through.

Record any outgoing checks, and use a debit card when possible. If your bank offers overdraft protection, consider signing up. This service links another account, like a savings account, to cover the difference if you overdraw your checking account. Keep in mind there may be fees for overdraft protection.