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What can banks do to compel merchants to accept starter checks?



Question: We are fighting the constant complaint from new checking account customers that merchants are refusing to accept starter checks for fear of fraud. Are there any strategies our customers can use (other than begging or threatening) to get merchants to accept them?

Answer: There isn't much banks can do to compel merchants to accept checks. For most customers, this just causes them to use a credit or debit card, or simply delay a purchase until their check set arrives. But for those customers who have no alternatives, this can be a real inconvenience.

One way to address the problem is using MICR (magnetic ink character recognition) check printing on the sales platform to generate starter checks. This has the advantage of printing all of the account holder's variable information, including the account number and MICR line, right on the check. Check numbers can be sequenced to correspond with the ordered check set. Some banks also allow customers limited customization, such as choosing fonts or graphics. Not only does this make starter checks "look like" regular checks, it also reduces fraud by eliminating ways to alter a starter check, such as laser printing a phony address onto the check.

You may also want to look into software that integrates new account openings with the starter check process using multi-function MICR printers. This system ties the new account workflow into the physical tasks of scanning and storing customer identification, filing appropriate forms either through email or faxing, and completing the process by generating starter checks. Early adopters are seeing significant time savings through this approach.


Source Technologies Founded in 1986, Source Technologies provides integrated solutions for managing financial transactions and other secure business processes. Products include MICR printers and consumables, secure disbursement software, and the groundbreaking concourse self-service banking kiosks. Source Technologies has created over $400 million in economic value for customers in the last ten years. First published on BankersOnline.com 1/31/05







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