Bismarck, North Dakota News

Consumers may have begun noticing little white signs popping up on registers throughout Bismarck-Mandan: No checks allowed.

Signs are taped to some drive-thru windows, or on tills at restaurants or shops, directing the customers to pull out the plastic instead of the pen.

"We just started not taking checks," said Kim Grott, co-owner of One World Imports. "For one, there's the protection. And for a small business to be able to electronically process credit cards and checks, it gets to be expensive ..."

The protection Grott is speaking of is for checks returned for insufficient funds when a check is written for an amount that is not available in the check-signer's bank account.

It's a difficult process, collecting on a check, she said.

"All the way around, it's a tough deal," she said.

It may be a difficult process, but Burleigh County Assistant State's Attorney Tyrone J. Turner said some of that difficulty may stem from not understanding the requirements.

"The state says when you take a check, you have to verify the identity of the individual, usually done with an ID," Turner said.

The check must then be presented to the bank within 14 days of receipt. Once the bank notifies the business that there are insufficient funds, the business must follow up with the check-writer, asking for payment and stipulating the penal convictions were the person not to pay the amount.

"A lot of times, (business owners) don't follow through with the type of requirements that the statutes dictate," Turner said.

Those convictions can get heavy, too, Turner said. Under no other aggravating circumstances, a bad check written for between $50 and $250 is a Class B misdemeanor. But the more checks bounced, the more penalties accrue, up to a Class C felony, which carries a maximum five-year jail sentence and $5,000 fine.

The felony charges could apply to check writers who have been convicted three or more times for writing bad checks within the last five years, or who have written more than $500 in checks. Turner added that all bad check writers can be pursued, even for checks written for smaller amounts.

"I know I have prosecuted anywhere from $2 checks all the way up to the thousands," he said.

There is an option many businesses are employing that could cut down on returned checks, without having a no-check policy, said Rick Clayburgh, president of the North Dakota Bankers Association.

Clayburgh said the banking world has been moving more toward a paperless society for years, with direct deposit, online banking and bill pay, and, of course, debit cards.

But for those businesses who may want to continue to take checks and be protected, there's the option of a point-of-sale check scanner. The check is run through a scanner, which determines whether there's enough money in the checking account.

"If they run it through the machine, the machine communicates to the bank and says ‘yes, the money is there,'" Clayburgh said. "The merchant significantly reduces collection issues, NSF issues."

Clayburgh said check scanner machines may be similar in cost to credit card machines.

Expect more and more businesses within the next several years to start re-evaluating their check policies, moving to simply taking debit and credit cards, or cash.

Grott at One World Imports said she hasn't had many complaints from customers, as most of them understand the business decision.

"So many banks nowadays offer the debit card free with the account," Grott said. "(The business is) paying two separate fees for processing checks electronically and debit cards electronically. It's just more economical to have one over the other."

(Reach reporter Crystal R. Reid at 250-8261 or crystal.reid@bismarcktribune.com.)

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