Checks: An Old Payment Form With New Profit

For years, we’ve been hearing that checks are dead. It seems that most consumers have ditched their checkbooks (except for the slowpokes in front of you at the grocery store.) So why should retailers consider accepting check payments? These four reasons may encourage you to promote check acceptance to your merchants:

Continued market demand Much to the surprise of doomsayers, the decline rate of checks has largely flattened out. For reasons ranging from insufficient payment alternatives to persistent consumer preferences, check use has stabilized among consumers.  While it’s undoubtedly true that checks will eventually go the way of the telegram, for the next several years we can expect consumer checks to keep the same market penetration as ever. The Federal Reserve Bank reports that 3% of consumer retail transactions are made by check in a given month. While that may be a small number nationwide, if it happens to include your merchants’ customers, it could add up to a sizable chunk of revenue.

Customer appeal As always, the goal in payments is to make it easy for customers to pay. Checks appeal to certain groups of consumers. Consider your merchants’ clienteles and the payment options they may desire. National chains like Joann Fabric attract older consumers that have a history of everyday check use. Discount chains like Dollar General appeal to consumers that may not have the option of paying with credit cards. Check out this list of national chains that welcome checks. You might be surprised how extensive it is.

No more bounced checks Bounced checks no longer need to be a deal breaker for your merchants. Be sure to let your merchants know about check verification services. By processing paper checks electronically at the point of sale, your merchants can deposit checks with guaranteed acceptance and minimal handling. Rates are typically lower than card transactions, and the funds are available within 24-48 hours.  In light of this, many merchants may wish to reconsider checks as a positive payment feature.

Faster handling Historically, accepting checks has been a physically tedious and time consuming process for merchants. Fortunately, check scanning options have really improved over the past few years. Many all-in-one POS systems don’t require a separate check scanner at all. Instead, their built-in cameras can be used for image capture and electronic check processing. For POS systems that do require a separate check scanner, today’s hardware options are faster and easier to integrate than ever.

Clearly, accepting checks isn’t for everyone. But for many merchants, checks can actually be a profitable option. Don’t let common objections like bounced check fees and physical hassle dissuade your retailers from considering checks. In the right merchant setting,  checks can be a relatively frictionless  and profitable feature of a well-rounded customer payment portfolio.