Consolidated Check Returns

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Pat A. McDavitt
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Article Title: Consolidated Check Returns
Author: Pat A. McDavitt.
Word Count: 992

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Consolidated Returns:
A consolidated returns program can reduce your returned check bank fee to as little as $2 per check or less, and improve your overall rate of collection by accelerating the returns process.
Your bank may currently be charging you $5 or more for each returned item. The Consolidated Returns process can reduce this fee by 50-80%. All that is involved is using a special endorsement stamp for all of your checks that is provided at no charge. This stamp tells the banking system to send all of your returned items straight to a Consolidated Returns account, bypassing your bank and their fees. Then, your account is debited the total of all bounced checks and a greatly reduced fee once a week from an account you designate. This saves time and effort on accounting as well because all bounced checks are reduced to one line item per week.
Advantages of using NSF Consolidated Returns:
Reduces returned item bank fee by as much as 80%
Improves your overall recovery rate by accelerating the returns process
Simplifies accounting
Lets you know quicker when someone bounces a check to you so that you can prevent further losses by not accepting more checks from that individual
Ideal companion service to an Electronic Check Recovery service
Works well if you have 1 location or 1000 locations
Work Flow NSF Check Recovery and Centralized Returns


NSF Check Recovery & Processing:

1)Merchant (payment intake) locations deposit consumer checks to Local Depository Banks.

2)Local Depository Banks process checks, receiving NSF check returns from the Federal Reserve several days later.

3)Local Depository Banks forward NSF check returns to a central ACH processing point, i.e.: 3rd party processor, or merchants corporate offices for processing (NSF Check Processor).

4)NSF Check Processor processes NSF check returned items through Affirmatives ACH Applications to Merchants ACH Clearing Account at their ODFI (original depositary financial institution) ACH Processing Bank.

5)The merchants ODFI processes the NSF check returned items through the Federal Reserve overnight, debiting the NSF Checkwriters account, and crediting the Merchants ACH Clearing Account.



Basic Service - Centralized NSF Check Returns

NSF item intake, imaging, processing
Return NSF paper checks to Merchant

1)Merchant location(s) deposit consumer checks, with a special endorsement stamp on the back, to Local Depository Banks.

2)NSF check returns are re-directed by the Federal Reserve from each local depository bank to a Central NSF Check Receiving Bank acting as the gathering and processing point.

3)Central NSF Check Receiving Bank images NSF items received from the Federal Reserve, retaining retrievable images of NSF checks for seven years.

4)Central NSF Check Receiving Bank ships NSF paper check returns to Merchants Corporate Office or 3rd Party Processor for ACH processing.



Manual Redeposit Service - Centralized NSF Check Returns

NSF item intake, imaging, processing
Manual redeposit service
Return uncollected NSF paper checks to Merchant

1)Merchant locations deposit consumer checks, with a special endorsement stamp on the back, to Local Depository Banks.

2)NSF check returns are re-directed by the Federal Reserve from each local depository bank to a Central NSF Check Receiving Bank acting as the gathering and processing point.

3)Central NSF Check Receiving Bank images NSF items received from the Federal Reserve, retaining retrievable images of NSF checks for seven years.

4)Central NSF Check Receiving Bank manually re-deposits eligible NSF check returns.

5)Central NSF Check Receiving Bank ships uncollected NSF paper check returns to Merchants Corporate Office or secondary collection entity.



Electronic Redeposit Service - Centralized NSF Check Returns

NSF item intake, imaging, processing
Data entry optional Third Party Vendor
Electronic representment Third Party Vendor
Manual redeposit of business checks
Return uncollected NSF Check paper checks to Merchant.

1)Merchant locations deposit consumer checks, with a special endorsement stamp on the back, to Local Depository Banks.

2)NSF check returns are re-directed by the Federal Reserve from each local depository bank to a Central NSF Check Receiving Bank acting as the gathering and processing point.

3)Central NSF Check Receiving Bank images NSF items received from the Federal Reserve, retaining retrievable images of NSF checks for seven years.

4)Central NSF Check Receiving Bank electronically resubmits eligible consumer NSF check returns a 2nd and 3rd time until collected.

5)Central NSF Check Receiving Bank manually re-deposits eligible business NSF check returns.

6)Data Entry Information captured by third party vendor:

1.Checkwriters Account Holders Name
2.Checkwriters Name & Address
3.ABA (Also known as Bank Transit Number) 9 Digits
4.Checking Account Number
5.Payment Amount
6.Check Number
7.Reference Number (number that will identify payment and Checkwriter)
8.Checkwriters Email address and or call back phone number (if required)

7)Central NSF Check Receiving Bank ships uncollected NSF paper check returns back to the Merchants Corporate Office or to secondary collection entity.

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