The check is a payment instrument by which the holder of a bank account instructs his bank to pay a certain sum to a beneficiary.
A check cannot be cashed unless the account holder is withdrawing funds from their own bank.
It can therefore only be cashed through a bank account opened in the name of the beneficiary of the check.
2 – When and what to pay by check?
You can pay everything by check, but a merchant can refuse to be paid by check if he has informed his customers (by posting or in his general conditions), unless he is a member of an approved management center.
Even if he is a member of an approved management center, he can still sometimes refuse a check.
These are the following cases:
- When the amount is small and cash settlement is usually required,
- If the costs he will have to cash it are out of proportion to the sum (for example, in the case where the check is drawn on a foreign bank or on an overseas territory),
- If the regulations require it to receive cash payments.
For a sum of more than 3,000 euros, article 112-6 of the Monetary and Financial Code prohibits payment in cash, but the creditor can then impose a payment by transfer, by bank card or by cashier’s check.
3 – A particular type of check: the cashier’s check
This is a check issued by a bank and drawn on their own account or sometimes checks online, which guarantees the beneficiary that they will be paid.
A cashier’s check is recognizable by the fact that it has a pattern, watermarked in the paper and visible by transparency, which includes the words “cashier’s check”.
Be careful though: this type of check has the same value as a huge banknote. If it is lost, the amount on it is also lost, because the account of the customer of the bank that issued the check is definitively debited on the day the check is issued.
4 – What is an NSF check?
The provision of the check is an amount equal to the amount of the check, which must exist in the bank account from the issuance of the check, remain there until collection and for the duration of the validity of the check (i.e. 1 year in addition of the collection period – see below).
The collection time:
- 8 days, if the check was issued;
- 20 days, if the check was issued in Europe or in a Mediterranean country;
- 70 days, if the check was issued in the rest of the world.
A check issued is therefore valid for 1 year and 8 days and the provision must remain in the account for this entire period if the check has not yet been cashed.
Normally, it is therefore only possible to issue a check if the corresponding amount is on account. Issuing a check if you have not made a provision on your account is an issue of a bad check.
A person who has issued a bad check that has been rejected for this reason by his bank may be prohibited from issuing checks for 5 years if he has not regularized the rejected check.
Regularization consists of paying the rejected check and informing your bank. To pay this check, you can:
- Put the reserve in the account and ask the beneficiary to deposit it again at the bank.
- Pay the person in cash, have the check returned, have the beneficiary issue a certificate showing that it has been paid, and return the check to his bank to prove the regularization.
Finally, the account holder can benefit from an overdraft authorization, which means that his bank accepts to pay the checks that come up for payment even if the provision is not on the account. However, this authorization is for a limited amount and it meets the same legal requirements as a consumer loan.