That sort of thing is usually seen only on checks that the payee draws on the payor's account -- remotely created checks. Is your customer perhaps issuing checks drawn on other persons' accounts at other banks in a telephone sales mode?
If your customer has printed that (or had it printed) on his/her/its own checks, there are some real concerns unless there's some sort of agreement between the customer and the bank that you'll honor them. That's an agreement I would not suggest you approve, by the way. Using that legend in place of a signature is an invitation to forgery and all sorts of fraud, and presents a real financial control concern for the business itself.
If I were in your shoes, I'd make it clear to the customer quickly that you won't knowingly pay checks without an agreed-upon signature. If the customer won't back away from this misguided attempt at "efficiency," I'd suggest he look for another bank.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8