Define: Check Guarantee

A check guarantee is a service provided by a third-party company that ensures payment for a check if it is returned unpaid by the bank.

When a business accepts a check from a customer, they can use a check guarantee service to verify the check’s validity and guarantee payment. If the check is returned unpaid, the guarantee company will reimburse the business for the amount of the check.

Yes, check guarantee services are legal and widely used by businesses to minimise the risk of accepting bad checks.

Yes, check guarantee companies typically charge a fee for their services. The fee may be a percentage of the check amount or a flat fee per transaction.

Yes, most businesses can use a check guarantee service, including retail stores, restaurants, and service providers. However, some check guarantee companies may have specific eligibility criteria or restrictions.

If a check is returned unpaid after using a check guarantee service, the business can submit the check to the guarantee company for reimbursement. The guarantee company will then reimburse the business for the amount of the check, subject to any applicable terms and conditions.

Yes, a business can still pursue legal action against the check writer even if they have used a check guarantee service. The guarantee company’s reimbursement is meant to provide immediate relief, but it does not prevent the business from seeking further recourse.

Yes, businesses can also consider using electronic payment methods, such as credit cards or online payment systems, as an alternative to accepting checks. These methods offer faster and more secure payment processing.

To choose a reliable check guarantee service, businesses should consider factors such as the company’s reputation, customer reviews, fees, and the level of customer support provided. It is also advisable to compare multiple providers before making a decision.