A check written by a customer is an order for us to pay someone for them. Who then actually owns that physical document (the check)?

"owns"??? I would say possession is ownership at that point of time. The check writer has no right to the physical document while it is in the hands of the payee.

Once the check is paid, does the customer necessarily own that cancelled document?

Interesting question. Based on their function, it seems logical to say the paid check belongs to the addressee (the drawee bank). After all, it's an instruction to pay a sum of money from the drawer's account.

That's the way banks used to treat checks, way back in the dark ages before their use become so popular. The bank felt a need to have documentation for its payments, so it kept the checks.

Then someone came up with a way to create images of the checks on microfilm, and banks realized they couldn't handle the burdens of ownership -- storage, retrieval for proof of payment questions, etc. So they marketed their customers heavily to convince them to start taking back their checks with statements.

Of course we now realize how much cheaper it can be to "safekeep" (i.e. destroy original) checks and send either image statements or "truncated" statements. And we're marketing again in the opposite direction. And some states actually have passed laws (Massachusetts, I'm sorry to say) requiring check return or positive consent to non-return.

Is that where your question is going?

The question comes up, because we have started to image and keep original checks for a period and then destroy them. A few customers have complained about them image and stated that those checks belong to them because they paid for them so we should give them back.

Actually I side with John. The check acts as an order for you to pay on behalf of the customer. The order is owned and retained by the bank. The customer is entitled to a copy of the paid order for proof of payment, but I think that the bank would actually be considered the owner at that point. This is a common occurance when switching to imaging. You should have scripts developed for your people in order to placate these customers fears.

I believe technically the check belongs to the bank, however when we started document imaging years ago, we did give the option of enlarging the image (for older customers especially) and they did (for awhile) have the option of receiving their checks. Once they realized how much easier the images where to handle and that they were accepted as originals by merchants, they decided it was the best thing since the invention of lip stick. If you have the capability of pacifying a few skeptics, you will probably find that before long, they will prefer the images.

As an additional twist, one bank that I worked for started printing their image statements on three-hole punched paper and gave every customer a binder for storage - it was a big hit!

When CFBank switched to document imaging back in 1996, we addressed many of these issues:

*we gave each customer the ability to determine the number of images on each page -- there was a nominal charge for less than six, unless you had one of the "free" accounts. E.g. senior accounts were three to a page with no charge.

*we gave the option of front and back images -- same scenario with the charges

*we printed up binders and distributed them with much hoopla at the branches. The binders were in the bank's colors and stamped with our logo.

*each year we mailed out new dividers for your binder -- the marketing department loved using the space for messages!

*statements were sent out on hole-punched paper.

*there was no charge for up to three requests each month for copies of the imaged checks.

*we allowed customers to opt out, to get their checks back, but there was a significant charge for that service

Senior management had been quite concerned about the reaction -- we had a very conservative customer base at that time, but with all these measures, the program was very successful.

IMNSHO, FWIIW

[translation: In my not so humble opinion, for what it is worth]

We switched to imaging in 2001 and ran into the same situation. The majority of our customers loved it but there were a few that made a huge deal over not receiving their checks back. For PR purposes we continue to return checks to these customers. I don't think you'll ever convince a customer they are wrong, so you just have to play along or end the relationship.

I would charge customers that want their checks back. That would prompt them to re-think their position and it's unlikely that other banks will perform this service for free as so many banks have gone with bulk filing/image statements.

Our binders are $5 - we have a lot of inventory!