Bounced Check: The True Costs and What You Can Do

Bouncing a check can result in overdraft, NSF and merchant fees — and even criminal charges. Steps to take include contacting the bank and check recipient and paying up quickly.

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Key takeaways

  • A bounced check penalty from a bank can cost around $35 in the form of a nonsufficient funds fee.

  • Merchants can also charge a bounced check fee; they typically cost $20 to $40.

  • You could face other consequences for bouncing a check, including getting written up or having the bank close your account.

What is a bounced check?

A bounced check is one that is returned — or bounced — to its original bank because the money is not in the check writer’s account to process it. This can lead to a number of fees — and probably some headaches. One so-called rubber check could end up costing $65 or more for overdraft, non-sufficient fund and/or merchant fees. If there’s a risk you won’t have the funds to cover a transaction, you’re better off not writing a check for it; consider whether late fees might be the less expensive option if you can delay a payment.

» Did you write a check without the funds to cover it? Here’s how to recover from a bounced check

Bounced check fees: Overdraft and NSF

The first fee you could face as a result of bouncing a check technically may not be for a returned check; you might first be subject to an overdraft fee. When a person or business receives your check and deposits it at their bank, if you don’t have enough money in your account to pay it, your bank may still decide to approve the check if you’ve opted for overdraft protection.

But your account balance would go negative, and you would probably be charged an overdraft fee to compensate your bank for the inconvenience. The fee is usually around $35 per transaction.

Another option is to have a backup account, such as savings or a line of credit, from which funds could be transferred to your checking account if an overdraft occurs. Some banks and credit unions charge transfer fees for this option, but the fees are usually much less than overdraft charges.

If your financial institution doesn’t cover the check, it bounces and is returned to the depositor’s bank. You’ll likely be charged a penalty for the rejected check; this is a nonsufficient funds fee, also known as an NSF or returned item fee. This costs about the same as an overdraft fee — around $35.

If the check is returned to a business, it may also add on some charges.

» Do you worry about overdrafting your bank account? Read our primer on how to avoid overdraft fees

Merchant fees for a bounced check

Many states allow merchants to charge customers up to $40 for the work of handling a bad check; $30 is most common. Add that to the typical nonsufficient funds fee, and you’re looking at $65 for one transaction.

Utility companies and landlords may charge a similar bounced check fee if it’s in the contract you signed.

In addition to the fees directly related to bounced checks, there can be other problems. For example, a landlord might also have the ability to evict you if you don’t pay the rent plus charges.

Another penalty for bouncing a check: You can get written up

If you bounced your check with a merchant, you may be listed in a database maintained by TeleCheck, a check acceptance company. Many merchants use this agency’s database or a similar one before they take your check. It screens transaction histories to weed out people with a history of fraud or bounced checks. If you’re in the database, retailers may decline to accept checks from you in the future.

Your bank may close your account because of a bounced check

If you don't pay the amount of a bounced check within the time frame your bank specifies, it can close your account. Then, you could end up on the database of another reporting agency, ChexSystems. This agency collects information on people who’ve had bank accounts closed for overdrafts and other issues. Many banks use ChexSystems to screen people who apply for new bank accounts, so getting written up can affect your chances of opening a new bank account.

» What to know if you're blacklisted by ChexSystems

What to do if you bounce a check

There are few helpful actions you can take if you’ve bounced a check:

  • Reach out to your bank and the check recipient: If you bounce a check, contact your bank and the person or company that received your check as soon as you're aware of the mistake. Explain your situation as a way of showing your good intentions.

  • Pay up quickly: As long as you pay up as soon as possible, a bounced check isn't likely to appear on a credit report, so it probably won’t hurt your credit score. If the check goes unpaid, however, it becomes an outstanding debt, and that can be reported by a bank, merchant or debt collection agency to the major credit reporting bureaus: Experian, Equifax and TransUnion.

  • Avoid bouncing more checks: If you write checks and you’re aware that you don’t have enough money to cover them, you're breaking the law. You could be charged with a misdemeanor or even a felony, depending on the amount and quantity of the unpaid transactions. Simply put, don’t write a check if you don’t have enough money in your checking account. If you need to pay a bill, try reaching out to the vendor to discuss paying at a later date or in installments.

» Unable to make a payment? Find out what to do when you can’t pay your bills

Frequently asked questions

When your check bounces, it’s rejected from the recipient’s bank because there aren’t enough funds in your account at the time of processing. The bounced check will be returned to you, and you’ll likely be subject to an overdraft fee or a nonsufficient funds fee.

It is a crime to knowingly write a check that will bounce. You could be charged with a misdemeanor or a felony for writing bad checks. Avoid writing a check for an amount that is greater than what’s in your account.

A legitimate cashier’s check from a bank or credit union that is in business and federally insured should not bounce. A cashier’s check is drawn on the bank’s funds, not the check writer’s funds.

You can avoid a fraudulent cashier’s check by not taking this type of payment from people you don’t know.