How to Handle a Bounced Check

Written by Jessica Merritt | Edited by Becca Stanek | Published on 08/05/2024

Bounced checks sound more fun than they actually are. No, they’re not a rubberized version of a regular check bouncing up and down — it’s your check bouncing back due to problems. Or worse, it's a check you receive that doesn’t clear.

If the problem is on your end, you’ll need to resubmit payment and deal with additional complications like bounced check fees. Or, if you're the recipient, you'll need to contact whoever wrote the bounced check to solve it.

What is a bounced check?

Bounced checks happen when a bank account doesn’t have enough funds to cover a check or there are other errors related to the check, such as an incorrect date. Check bouncing can occur if you’re not monitoring your balances, forget about pending transactions or don’t get a deposit you were expecting on time. It’s also possible to receive a bounced check, which means you’ve deposited a check, but the check writer's bank account didn’t have enough funds to cover it.

Some consequences of bounced checks include non-sufficient funds fees, overdraft fees or merchant fees. Bounced checks can also strain relationships between payers and payees, as you may not want to accept checks from someone who’s given you a check that bounced. Further, bounced checks may lead to legal consequences if you knowingly write a check when you lack funds.

Why did my check bounce?

A check can bounce for a few reasons:

• Your account has insufficient funds. Insufficient funds are a common reason that checks bounce. It can happen if you’re not aware of your account balance or overlook pending transactions or automatic payments. Insufficient funds can also happen if you’re expecting a deposit but it’s delayed.
• The check was not correctly filled out, or there were bank errors. Check writing errors can cause banks to return checks. For example, you might write the wrong date or number, or the bank's processing system may not be able to read your handwriting. Bank glitches, such as data entry mistakes or scanning errors, can also cause a check to bounce.
• The check is stale. Personal checks are considered outdated after six months, and banks may reject checks if they haven’t been cashed within this period. If you’ve written a check and notice it hasn’t been cashed for a month or more, contact the payee to make sure they received it and plan to deposit the check.
• The check is from a closed account. If you’ve closed an account but still have uncashed checks, the bank will reject those checks. It’s best to ensure that all checks are cashed before you close a bank account.

What happens if a check bounces

Expect fees, penalties and a loss of trust if you bounce a check. Here's a closer look at the consequences of a bounced check:

• Bounced check fees: Banks generally charge a non-sufficient funds (NSF) fee if a check can’t be processed due to insufficient funds. You may also face an overdraft fee if the bank covers your check. Additionally, the check recipient's bank may charge a fee, including a returned check fee or late fee.
• Impact on your banking record: A bounced check can go on your ChexSystems report and complicate your banking options. ChexSystems is a consumer reporting agency for checking and savings accounts. Banks and other entities can request your ChexSystems consumer file, which includes information on account closures, bounced checks, inquiries and check orders you’ve placed. If you’ve made a habit of bouncing checks, banks may deny your application for a new account, in which case you'd need to turn to second-chance checking, which tends to have more limited features and fees.
• Closed bank accounts: If you bounce checks frequently or don’t pay back a bounced check by the bank’s due date, your bank may close your account. Check your account terms and conditions to find out if your bank indicates its policy on bounced check account closures.
• Unpaid bills: When you bounce a check, you’re still on the hook for payment. Since it didn’t go through the first time, you’ll need to make the payment again. You also may need to pay fees and other penalties, such as a returned check fee and a late fee, on top of the missed payment.

What to do if you get a bounced check

If you receive a bounced check, you may need to take extra steps to receive the funds you were expecting. Here's what to do:

1. Contact the check writer

Once you receive notification that a deposited check has bounced, you should contact the check writer. Notify them of the bounced check, and try to clear up the issues that led it to bounce. The bank should send you a copy of the check so you can review any mistakes on the check or ask whether there’s enough money in their account.

2. Try to cash the check again

If the issue was insufficient funds, you can try to cash the check again. After you speak with the check writer, verify that funds were the problem — not a check writing issue or another error — and confirm that funds are available to try to cash the check again. You may need to wait a few days for funds to become available.

3. Send a formal demand letter

If you’re not able to get the check cleared after a second attempt at cashing it, you’ll need to step up your efforts and send a demand letter for payment. Send your letter via certified mail and include the name and address of the person who wrote the check, the amount and date of the check and the payee name, along with the bank that returned it and the reason it did so.

Explain that you must receive full payment within a specified time period, such as 30 days, along with reimbursement for any fees and the cost of mailing the letter, or you’ll file a small claims court claim.

4. Take it to court

As a last resort, you can pursue payment by taking the check writer to court. You can file a small claims court case for an amount up to your state’s limit.

If you win in court, you’ll receive a "money judgment" and become a judgment creditor. That doesn’t mean you’ll automatically get the money owed to you, but you can pursue debt collection with a money judgment.

What to do if your check bounces

If you’ve sent a bad check, you should clear up the matter as soon as possible by making the payment and paying any associated fees.

1. Contact the check recipient

When you’re notified a check has bounced, get in touch with the check recipient. It may be helpful for them to know that their expected deposit didn’t clear so they can adjust payments or deposits in their account. Explain what happened and what you’re doing to make it right.

2. Make the payment

Once you have sufficient funds in your bank account or you’ve properly cleared up any bank errors, you can make the payment again. You should also pay associated fees at this point, such as returned-check or late fees. Make sure you have enough funds in the account so you don’t bounce the check again.

3. Pay your bank fees

On top of the fees you owe to the payee, you should expect to pay fees to your bank for bouncing a check. This includes NSF and overdraft fees. Your bank may give you a due date for paying back the bounced check and associated fees.

4. Keep documentation

A bounced check can go on your ChexSystems report and complicate your banking options if you apply for a new account. As such, it’s a good idea to keep documentation of the bounced check in case you need to dispute inaccuracies about the matter in the future. Be sure to include the original check that bounced, along with information about how you paid it back and when.

How to avoid bounced checks

Bounced checks may catch you by surprise if you’ve made a check writing error or aren’t completely on top of the funds in your account. However, you can take measures to prevent writing bad checks in the future.

As the check writer

To prevent writing a bad check, you should:

• Keep an eye on your account balance. With online banking, it’s not only easy to see your account balance but also to forget about checks you’ve written or automatic payments coming out if you’re not balancing your checkbook. Consider using an app or spreadsheet to keep track of the deposits and withdrawals coming in and out of your account.
• Make a budget and stick to it. Using a budget and staying true to it can help you better manage your account, so you always know how much money you have available and not get caught off-guard by your account balance. Budgeting tools can help you visualize how much you spend and how much you have coming in. This way, you can adjust your spending and overall budget to avoid shortfalls and spend your money intentionally.
• Consider overdraft protection. Overdraft protection can cover payments when you don’t have enough funds in your account. Although you’ll pay a fee for overdraft service through your bank, it can help in avoiding late fees and returned check fees.

As the check recipient

To avoid receiving a check that bounces, consider doing the following:

• Make sure the check is legitimate. It’s easy to get scammed by a fake check, but it’s also easy to verify that a check is valid. You can search the FDIC BankFind Suite database to confirm that the issuing bank's name is valid and then call the bank to confirm the check’s validity. You can also use the ABA routing number lookup system for verification, and review the physical check for watermarks and other security features.
• Don’t accept checks. With the potential to bounce, checks can be problematic — but you don’t have to accept them as a form of payment. Instead, you can accept cash, cards, money orders or cashier’s checks only.