Strange Endorsement

In reviewing some procedures I discovered a unique/strange endorsement. Instead of voiding/issuing a stop payment on a check that was written out of our DDA that goes uncashed, they are endorsing the check as, "not used for purpose intended". This does not seem permissible to me.

Any thoughts on this endorsement?

Thanks!

If the bank issued a check that was not used - what difference does it make? Why does it require an endorsement at all.

I agree that the endorsement was unnecessary.

Thanks!

We use the stamp "not used for purpose intended" when a customer purchases a cashier's check to purchase something and then brings it back because it wasn't used.

It explains why the original check is back in the bank's hands, without an indorsement.

I'll add the fact that this practice has existed for decades. In some cases, the issuing bank has the purchaser add the indorsement, and signing it. Other banks use a rubber stamp. Some will use the check (with this "strange indorsement") as a debit to credit the amount back to the purchaser's account.

That endorsement has been used for ages for items such as cashier's checks and money orders. Voiding your own check just means it is never paid; a cashier's check or money order are funds already taken from you via debit or handing over cash. if you void it you are still out the money. The easiest way to get your money back if you no longer need the instrument is to endorse it "not used for purpose intended" and deposit the check back to your own account.