Why Should You Stop Payment on a Check?

Checks are being used less by ordinary people, but the check business is alive and thriving in businesses.

If you don’t use checks a lot, and our younger generations don’t often seem to, you may not know what it means to stop payment on a check.  Well, the phrase pretty much tells you what that means, but I’ll clarify a bit further.  First of all you need to know your check has never been cashed.  Businesses still reconcile their accounts each month as a regular part of doing business. From one month to the next you may find that you have some checks that are still not showing up in the bank account. But those almost always have cleared by the following month.  If you aren’t reconciling your checking account each month, you may never realize that a check hasn’t cleared.  If the check is very large, say $500 you might notice that you have a lot more money in your account than you should, but if it’s a smaller amount, like $35, you might forget you ever wrote that check.

Cheque sample for a fictional bank in Canada. ...

Cheque sample for a fictional bank in Canada. May also apply for the United States. Created by Sergio Ortega based on real cheque standards. Note: U.S. checks are the same except for the MICR format, which is slightly different, and the issue date which is not OCR-ready as it is in Canada. Some U.S. checks also still have a “fractional routing number” near the date; this was used in hand-sorting checks prior to MICR. (Photo credit: Wikipedia)

But back to what I was saying. Every once in awhile, a check will keep showing up as you reconcile each month as not having cleared through the checking account.  By that time you can assume the check was never received by the person or business to whom it was sent.  However, it would be foolish to make that assumption without first doing some investigating.  First, make contact with the person or company to whom the check was written and find out if they have simply not made it to the bank yet.  Most everyone has a smart phone and the option to deposit their check just by snapping a photo of the front and back sides, but not everyone.  Once you’ve established that the person does not have the check you can assume it is lost.

You’ll want to re-issue a check to the person or company in question. But that’s not where your responsibility ends.  Who knows what happened to that check?  Perhaps someone stole it and plans to try and forge the signature and cash it.  You wouldn’t want to take that chance, especially if the check is written for a significant amount.

The next step is to contact your financial institution, either by phone, in person or online.  There are usually options when you log into your account to stop payment on a check.

It usually costs to stop payment on a check, typically around $10 $30-$40.  However, once the stop payment is applied to that check, you know it will never be cashed by anyone.

Now if the person called you and said they washed the check and it’s a pile of tiny spitballs, and you trust this person, you wouldn’t have to go the route of stopping payment on a check.

Just use your own judgement.

Now on the other end of the spectrum, one time my husband didn’t get the check to the bank for a few days. If I remember correctly, it was about three days.  It was a couple of years ago, and we didn’t have banking by phone options with the credit union yet. It was typical for us to deposit checks once a week. That’s how it is done at the place where I work as well.

This check was from one of Mr. A’s customers. He decided since Mr. A hadn’t cashed the check immediately, that it must be lost and he just went ahead and put a stop payment on the check.  So we went and put the check into the bank, assuming the check was good.  A few days later we received a notice in the mail that the check had had a stop payment placed on it.  Mr. A had to call the customer and find out what was going on.

So be sure to call the other person or company and make sure that they don’t have the check.  It’s likely that they would not hold onto a check for several weeks, but you never know.

Have you ever stopped payment on a check?

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6 comments to Why Should You Stop Payment on a Check?

  • jestjack

    $10 for a stop payment?…Not in this neck of the woods…$40 is the norm. Aaaand I had an issue with DD’s college tution. I mailed it and they claimed they didn’t get it…wanted the tuition like NOW…drove the 2 hours down to school and put it in their hand…drove the two hours back…not so much as an I’m sorry. Was assured that if/when the check surfaced it would be returned. Well it surfaced…3 months later…and despite assurances it was deposited…which sent my checking account nuts and filled my mailbox with “greetings”…I don’t think incompetent covers a description of this school’s business office. Aaaaand now they would like my banking info to “automatically” take tuition….I don’t think so….

    [Reply]

    Mrs. Accountability Reply:

    I stand corrected, Jestjack! I checked again at Wells Fargo and it’s $31 to stop payment on a check. I guess I was remembering some amount from back in the olden days. ;-) That was quite an awful situation you went through with your DD’s college tuition! I’m glad you got it straightened out, and I don’t blame you for not letting them automatically take the tuition payment.
    Mrs. Accountability recently posted..Examine Your Utility Bills Every So OftenMy Profile

    [Reply]

  • I still use checks to pay bills and monitor when they’re cashed. I’ve luckily only had to stop payment once and that was because a previous landlord lost my rent check. I had to pay $40 for a stop payment and she was nice enough to deduct it from my rent. She never found it.
    Rebecca recently posted..November Goal Update & Debt ProgressMy Profile

    [Reply]

    Mrs. Accountability Reply:

    Rebecca, that was nice of your landlord to deduct the amount for the stop payment! Thanks for stopping by and commenting!
    Mrs. Accountability recently posted..Examine Your Utility Bills Every So OftenMy Profile

    [Reply]

  • I was just about to comment on the $10 too. The last three banks we’ve had charge $35 to stop payment. I haven’t had to do this, as I use checks rarely these days. I did receive a check from an old homeowner’s insurance company, and deposited the same day I received it, only for it to bounce back as payment had been stopped on that check and no one notified me. I still got stuck with the fee’s resulting in a bounced check too.

    [Reply]

    Mrs. Accountability Reply:

    Angella – I corrected the post. I don’t know what I was thinking, maybe I was thinking about something else. What a pain to cash a check the day you receive it, only to have funds denied!
    Mrs. Accountability recently posted..In Control of the Money? Could You be Accused of Abuse?My Profile

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