Just wondering the normal process for handling return items. Currently our bank is handling it where if we receive a return item and a client wants us to rerun it, we don't even touch the account we just run it through again offsetting our Fed GL. Then, if it comes back again we charge it back and the client can of course see that. The problem is that the client has no trail of it ever coming back the first time and when they call we can't even see it, unless we call deposit ops to look into the original rerun date.

At a previous bank, even if the client wanted us to rerun it we would debit the account and credit our Fed GL and then rerun the check to the account. This way the client would see that it came back once and we redeposited it. Just seemed like a good trail to have for the client and those of us who get calls on them. I hope that makes sense.

Which way is correct or the normal process you would see at a bank? Thanks!!

I've seen it done both ways. There is no right or wrong answer, just whatever the bank chooses. It follows the same concept as posting item into overdraft (so they show on the cust. statement) or non-posting them (where they never show unless you pay into overdraft).

seen it done both ways as well, as long as you are consistent, either is sufficient. Biggest question is how often are customers asking if a check was returned and how much time you spend researching, which would lead you to either debit/credit back or just reprocess.

How are you being compensated? Presumably you assess a fee for the deposited item returned and another fee if you redeposit the item (on their behalf). If yoy don't account for the work, then "everybody" is absorbing the costs instead of it being "personal."

Al

Thanks, that makes sense. Lately, more calls than usual and one business client pointed out that their previous bank would show the trail. I just thought I'd see what most banks did.

I'll have to get with my dep ops dept and at least have a better way for the front line to research, rather than waiting on them to get back to us. Thanks again!

Al: We only charge if it becomes a true charge back. We don't charge for redepositing or it coming back the first time. We do, however, have all these fees listed in our fee schedule, yet we only charge a fee when the check is charged back. I guess if we did charge the intial return item fee and a fee for redepositing the item, that would show on the history and the client would know the dates just from that.

We are a commercial and private bank, and for the majority of our clients we waive A LOT of fees.

If you re-clear the item without charging it back and redepositing it, and want to place a Reg CC redeposited item hold, you have to count the hold days from the date of original deposit, not the date you recleared the item. Also, unless you get a release or waiver from your customer of its right to a notice of dishonor within your midnight deadline after receipt of the returned item or the notice it's being returned, you could be liable to your customer for any losses caused by your delay in notifying the customer.

Ok - I'm confused. I thought if you redeposited (reprocessed) a returned item and placed a hold, the redeposit date was used - not the original deposit date.

In the Commentary to 229.13 it states: "To determine when funds must be made available for withdrawal, the banking day on which the check is redeposited is considered to be the day of deposit."

We debit and re-deposit the item, if the item warrants, charging a fee in the process. I think it's necessary to have that trail. We also place a 5 day hold from the date of re-deposit.

In John's scenario (and tbosa's original question) the item was not debited back to the account nor was it redeposited. Hence, there was no second banking day of deposit to count from.

Got it now! Thanks.

We have several grocery stores that have 30 days to collect on bad checks from their vendor, in these cases the stores have signed an agreement with us to have all checks charged back the first time with a fee (of course) because of the length of time it may take to process twice. Otherwise, we redeposit without a fee and only place holds for returned checks over over $25.00.