What Sears is doing now with handwritten checks

As people try to hold the line on credit card purchases, they may be turning to an old standby: the humble check. You know, the paper kind with funny designs and big Gothic type initials and scrawled signatures.

Using a check can give you more control on the flow of money out of your account.  Usually it takes a few days for a check to clear from your account, unlike a debit card, which takes out the money more quickly.

But using checks is getting more complicated.

A recent shopping trip at my local Sears store suggests that the day may be not too far off when it really becomes a paper debit card.

When I tried to buy a pair of shoes with a check last week, the clerk took the check, but said I also had to sign their electronic pad, which is the place where you normally sign for credit cards.

It had a dense paragraph of legalese—which I actually took the time to read, much to the annoyance of the few customers on line behind me. Among the things it said was that I would be authorizing Sears to do an electronic funds transfer from my bank account.

I asked the clerk why I needed to sign this electronic pad, since I had already signed a check over to Sears. Isn’t that the whole idea of a check?

A store manager came over and told me it was their new system for processing checks. I said it was fine for them to set up a new system just as long as it didn’t involve my approving an electronic funds transfer.

We were at an impasse and I decided to cancel the sale rather than hold up the line and yield my electronic signature, scratchy though it might be.

An interesting epilogue: Two days later, I noticed in my online banking tally that Sears actually did cash the check even though I didn’t sign the pad. They then gave me a full refund the same day. So they didn’t really need my signature after all and took the money anyway. What gives?

A spokeswoman from Sears says that it is part of a switch to a new vendor called TeleCheck, which guarantees the check. Checks are now being processed electronically at the counter, which means they will clear faster for Sears and money will come out of your account more quickly. The pad provides proof to TeleCheck, the spokeswoman said, that you know they are clearing your check this way.

And if you won’t sign? They can clear the check anyway. 

Have you had a similar experience using checks at Sears or other stores? Let us know below.–Bob Tiernan

 

 

Comments

[Pete]

Walmart has been doing this for years. I think I remember reading a few years ago that a law was passed allowing stores to process paper checks as ACH transactions without any additional authorization.

[Al]

Where have you been? This has been going on for years!!!

You sound like Pres. Bush (the first) that remarked about the electronic scanners at the grocery stores.

[Joanna]

This type of transaction has been taking place for more than 2 years. Walmart does the same thing with your check and actually gives the check back to you. That was when I decided to get a debit card. It didn't make sense to waste the check. Not only do stores do this but utilities do the same thing. They receive your check, take the money electronically, and destroy the check.

[Paul]

This is being used at a lot of stores, gas stations, etc. It is converting your check into an "electronic check". Part of the reason for this change goes back to 9/11. When flights and commerce were shut down across the country, it nearly broke the nation's financial institutions and many businesses because paper checks were not able to be delivered to their destinations for final payment. Nothing funny is going on here. They still are taking the money from your account, it's just coming out electronically. It costs businesses less money to do an electronic transaction. It also is more secure than paper having to go from your hand to the cashier to the store office to the bank and possibly to another facility. There is a lot of risk in this method and it's not necessary any more. It is likely that their bank is scanning your check anyway and getting the money electronically even if it doesn't say that, so you're not preventing an electronic transaction, you're just delaying it slightly.

[Jesse James]

As technology marches on, things like using checks to improve cashflow fall. It is amazing to see PAPER being converted before your eyes to bits and bytes that suck the money directly out of your bank account.

What's next?

[Jack - Illinois]

The last time I shopped at WalMart, about 4 or 5 years ago, they were doing the same thing. When I challenged them on signing the form, the clerk called over the floor manager who told me they didn't have a choice. I told them I do have a choice and walked out leaving my cartfull of purchases on the conveyor. Yes, I did say that was the last time.

[Joe]

I don't understand why people still write checks, and then complain. I suppose they do not realize that we are in the information/data age. Use either a credit card or debit card and help us all out will ya'. I groan every time I am behind a check writer. Not very environmental friendly writing checks, not to mention the extra effort it takes to process it.

[Michael]

Obviously, this woman did not have the money in her account and was using the check to float the time until she could deposit the money. I agree with the earlier post pertaining to Walmart. However, several businesses are using it along with doctor offices. Solution: Don't shop unless you have money to do so...

[E. Nowak]

What really bothers me about this is: what if I had to use this check as evidence in court? Where is the original check? What if I made a personal notation on this check? It would be lost.

The law that enabled banks to do this was very consumer un-friendly to me. But we hardly heard a peep when it passed.

[Lulu]

I believe TeleCheck (or similar system) is used at Old Navy and has been for at least a couple of years.

[Steve]

This happened to me about 10 years ago, can't remember the store. So this is old news. As for Sears, it sounds like a smart thing for them to do. Plus, it is better for the consumer because it makes it very hard to bounce a check. Bounced checks are bad for everyone. So get with the program and stop living in the past and holding up lines. Death to the paper check!!!

[mara]

I went to a doctor for a consultation and they did it ..I was rather surprised by the lack of trust, and perhaps greed, even at a doctor's office.

[BJ McCall]

Why then does my bank put a hold on checks that I deposit? Seems like a one-way street.

[Lori in TX]

Something everyone needs to be careful about is comparing the amount of the check against the amount that is to be debited. What the cashier puts in may not be the same amount as you have written on the check. The amount the cashier puts in is the official amount debited and if you sign it without noticing a difference in the the amounts, you have little recourse. I went through this. Very frustrating.

[Carol]

Our grocery store Stop & Shop now does this also. Check posts almost immediately.

[Kathy]

I'm new here. I need a phone number for comsumer report for my parents who are elderly and were ripped off by a local Toro lawnmower distributor.Can any help me.Please email me at kathleengowarty@yahoo.com..Thank You

[Tobie Stanger (Consumer Reports)]

Kathleen,

Typically, you would need to complain to your state's department of consumer protection or attorney general's office (consumer protection is often part of the attorney general's job). While your local Better Business Bureau www.bbb.org can't necessarily help you solve your individual problem, it does give you the opportunity to post a complaint to prevent others from encountering the same problem.

You also can post your question on our Home and Yard blog, which can be accessed on the consumerreports.org home page, near the bottom right.

[Brooklyn]

There are older people who feel comfortable using paper checks and they has that right. I feel a debit card or echeck saves paper. My grandma and grand aunts feel better paying cash or paper check and won't change from that comfort zone. TO each there own.

[gman863]

Paper checks are a pain in the a-- for merchants to process. When I was an office manager for a large furniture store, it would often take an hour to go through all the checks for the previous weekend and log them on bank deposit slips. In contrast, all debit/credit transactions were electronically logged and deposited.

I think the reason many people hate electronic check processing is it eliminates "kiting": Writing a check one or two days before payday and hoping it won't clear the bank until after you've made your deposit. With electronic check processing, a merchant has little (if any) risk a check will bounce and they will have to take a loss.

[Joe]

i cant believe people are still using checks..... folks.... if you want to use your debit card and you dont want the money taken out right away, swipe it as a credit card instead of debit.... that way you get a couple days before the money is taken out.... or how about you dont spend money you dont have... that also works too....

[Billy]

At last! Someone who has guts enough to say no, refuse to complete the purchase, and just walk out of the store. You'll take a lot of flack for doing it, but it was absolutely the right move. It's the only way to get the message through to these stores---that some of us want checks processed the traditional way, and if they aren't going to do it, we'll take our business to stores that will. I've had lengthy discussions with Sears---local management and at the bottom of the corporate ladder. Of course, they won't EVER tell you who the nincompoop is who dreamed up this system. And they think you're an idiot for complaining. Sears, Walmart, Meijer, Office Depot, and Auto Zone have all lost a ton of my business over this check conversion process.

I find credit cards and debit cards to be unsafe and far more open to identity theft than any check. I don't want my check treated as a debit card, and woe to any business or organization that does. And no, I don't write a check to gain a "float" period. If I don't have the money, either in cash or in the bank, I don't make the purchase. If everyone's spending habits were the same, most of the country's financial problems would be immediately solved.

[debbie13410]

The company I work for has been using Telecheck for several years and we never have any problems or customer complaints. In one transaction we found out someone used a stolen credit card but Telecheck covered it. If the account does not have any money in it then the transaction will be denied. Another advantage is there is no bank fee charge. I volunteered as Treasurer for a non profit and we were charged $100 in bank fees to process a large quantity of checks from a fund raiser. Another organization we are involved with will only accept online payments. You can't write them a check and all correspondence is through email. Paper checks are a thing of the past. Electronic transfers are safe, easier, and reduce costs.

[Kim Crookton]

just remember to check your receipt, I went to Target, she rang up my sale, I wrote the check, she entered a different number, $2.00 difference. If I didn't check the receipt I wouldn't have caught that. They also have Telecheck, so it clears your account right away.

[Dave]

Posted by: E. Nowak | Aug 8, 2009 6:36:51 PM: "What really bothers me about this is: what if I had to use this check as evidence in court? Where is the original check? What if I made a personal notation on this check? It would be lost."

No, E. Once the check is processed, YOU GET THE CHECK BACK right away, so you will have the evidence in hand as you leave the store.

When you present a check, you are presenting a signed document stating to the retailer that you have the money in your account. If you do NOT have the money in your account, and are expecting to "float" a check, you are presenting a fraudulent document.

When you are requested to sign at the register, you are signing a statement that simply says two things:
1. I have the money in my account and authorize you to transfer it from my account to yours (basically the same thing you are professing when you sign the check), and...
2. If I do NOT have enough to cover the transfer, I understand there will be a $30 nonsufficient funds (NSF) charge (this has also always been the case when presenting a check).

All of this information prints on the back of your check, WHICH YOU THEN TAKE HOME. Isn't that great!? You don't even have to wait for the bank to send you your cancelled check! You already have it. Balancing a checkbook has never been easier (except if you use a debit card, which IS easier).

The only losers in this scenario are:
1. The person who USED to work in the back office at Sears processing checks the next day IN THE SAME MANNER. He/she is now out of a job because the cashiers are now doing it, and...
2. Check printers. Their job is becoming obsolete.

Time marches on. Businesses are forced to become more efficient because stockholders demand higher profits. Funny... I'll bet many of you complaining here own stock in your investment portfolio, so it is YOU that are actually demanding these actions!

[Dave]

RE: Billy | Aug 11, 2009 8:22:22 PM: "I find credit cards and debit cards to be unsafe and far more open to identity theft than any check."

Are you SURE? I do not see the logic in your argument.
When you hand Cathy Cashier a personal check, you hand over your bank account number, name (sometimes spouses name, too), street address, city, state, ZIP code, and usually a phone number. Sometimes you have to show ID, in which case she now has your driver license number and expiration date. She now has everything needed to steal your identity in the drawer of her register. She could use the numbers from your check to buy stuff online.
When you swipe a VISA/MC debit card, you hand over ... nothing that I know of.