We have received notice of a check being returned unpaid. Bookkeeping requested the customer service person to place a hold on the check while it was attempted to be represented. My understanding was that you place a hold from the date of deposit but this hold was placed from the date the notice was received - three days after the original deposit. What is the correct date to use for a hold with this circumstance? Thanks so much for any insight!

You calculate permissible holds by counting the business days from the banking day of deposit.

Thanks Ken - that's how my logic worked but I could see the CS's point of view too ... she stated she used the date of "re-deposit".

So if you are representing on your customer's behalf (and I hope you have a signed agreement giving you the authority to do so) the correct way to handle this is to charge the check back when you receive it, and then redeposit it, making the "banking day of the deposit" the date that you resubmit the item.

As far as any hold placed when you receive notification from the drawee bank, that would be based on the date the check was first deposited so a safer course of action is to debit the account as soon as you receive notice and offset your internal G/L when the check comes back rather than risking your hold dropping off while waiting for the return item.