Wondering if anyone would care to share their post-dated check policy.

Here is my problem:

We have a customer that pays their employees with paper check, and does so, continually, a day earlier than when the checks are dated. These employees (non-customers) then come to one of our branches to try and negotiate the checks. We, in the past, have not negotiated these checks.

We have spoken to the customer SEVERAL TIMES about this issue. a) do not pay your employees early b) if you do pay your employees early, make it CLEAR they cannot negotiate the check until the following day. Sounds fine and dandy, in a perfect world.

Yet, every other week, we have their employees coming in a day early to cash them. There has NEVER been an issue with the funds on these checks. HOWEVER, most of their employees rely on rides or public transportation. We do not have many branches; certainly not a branch anywhere near where this business is located, so in some cases, you might have someone that has been on a bus (or multiple buses) for over an hour, only to come to the bank to be told "come back tomorrow". As you can imagine, this is not a comfortable situation for our staff.

[censored] show at our branch.

OP here: sorry about the censor, LOL.

What I went on to say is: This is a BIG customer of ours, and the officer treats them with kid gloves. Yet, twice a month, it's a S Show at our branch.

You have two choices - cash them when presented or not. I am not sure what else you are looking for. You have no actual responsibility to check for a postdated check.

§ 4-401. WHEN BANK MAY CHARGE CUSTOMER's ACCOUNT.

(c) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in Section 4-403(b) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in Section 4-303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under Section 4-402.

We have it in our account agreement that our customers agree not to post date checks and if they do the bank may pay them upon presentation.

Same as RC for the banks I've been at

simply direct each of those clients to the account officer when they arrive to cash their post dated check on the next pay cycle, load his/her office up with these people as they come to cash them, and let the account officer explain why/why not the bank will/won't honor the check that day.

i guarantee it will be resolved that day for all eternity.

Video of that would be great, too!

Or just cash the checks and don't worry about it. If it's a BIG customer that the bank wants to accommodate, and the customer clearly doesn't intend to change their approach, just cash the checks. Your account agreement almost certainly permits you to do so (otherwise you need a new account agreement), and the UCC provision that Randy cited above permits it even if your account agreement doesn't. Tell the account officer to let the customer know that the bank won't fight this battle any more and is just going to cash the checks when presented. Everyone will be happier and can go on to bigger problems.

I'm with rainman, (as long as your account agreement allows). My sense is that the customer is not going to change behavior (for whatever reason) so maybe it is time to let it go. I always think of the risk/reward for this type of situation and it seems to me the operational/transactional list is low but the customer using his power as a major customer to cause trouble if he is forced to change habits is high.

What you didn't mention is the likelihood that those employees who are invited to "come back tomorrow" -- at least of them -- are likely to grouse about being turned away, and that can't sit well with the valued customer if he has any regard for his employees.

I would love to hear that you convinced the account officer to pay a visit to your teller line on the day those employees are likely to come in to cash their checks. Maybe the account officer will get some appreciation of the problems tellers have to deal with. Yes, I know that's wishful thinking.

Does the employer know about direct deposit, or are these employees generally unbanked individuals?

sadly, there is a likely a finance person somewhere at this company thinking "i'm riding the float on these checks for an entire day"...

In these cases the employees are commonly either unbanked or they are living paycheck to paycheck and can't wait the day or two their bank will take to make the funds available to them.