Why Stamp NSF

If the check was presented for payment to the bank on which it had been drawn and payment was refused due to insufficient funds in the maker's account the bank refusing payment should make a notation on the check. The person presenting the item for payment over the counter is entitled to have the bank make a decision about whether or not to pay the check by the close of business that day. If the bank elects not to pay the check, it should indicate on the check its intention not to pay, along with the reason for the return. This evidences that presentment was duly made and that payment of the check could not be made. The bank benefits from this procedure as well, because it will serve alert a teller the next time the check is presented to make sure collected funds are available before paying out on the check. Some police departments require such a notation before they will pursue the drawer on a bogus check charge. In addition, your collection department may not accept the check for collection unless it had been presented for payment and refused. Many institutions will not accept for payment or process a check if it has been presented for payment multiple times.

First published on BankersOnline.com 1/15/01