Check Guarantee is Insurance protecting merchants from accepting bad checks

Check Guarantee Services are designed to manage risk by providing merchants the ability to request approval for a check that if accepted will be guaranteed to be paid. 

By guaranteeing checks merchants insure against the risk of bad check losses and risk of consumer fraud.  Of course not all checks will be approved at the point of sale (POS) but for those that are, merchants are guaranteed payment.

Check guarantee at the point of sale allows merchants to make sales and let customers walk with products and services without fear of loss.   Simply enter the customer's check and contact information into a POS terminal or cash register where this information is run against a database of millions of consumer records, in about the same amount of time as a credit card transaction.  If the check is authorized and later does not clear the bank, the merchant account is quickly reimbursed the full amount of the check that was processed.

Check Guarantee Pricing Evaluation

There is a discount percentage rate charge for each check you guarantee (rates are based upon the known risk of the merchant industry) plus other transaction and minimum billing fees.  Merchants should evaluate pricing by looking at:

  1. their need to accept check payments vs. steering customers to other forms of payment like debit cards
  2. the amount of unrecoverable check losses vs the amount of check sales volume to determine if they could self insure for less than the cost of a check guarantee program. 

Merchants should also consider that like all insurance programs, too many reimbursed losses will increase their check gurantee premiums or have service potentially dropped by the carrier.