How Do Banks/Check Cashing Places Verify Checks? Answered

Short Answer — Banks and check cashing stores may verify checks by either authenticating the funds with the check’s issuer directly or using a third-party check verification service. While places that cash checks don’t always verify funds before cashing the check, there will be consequences like fees if the check bounces.

How Do Banks/Check Cashing Places Verify Checks?

Banks and check cashing locations do not always verify funds before cashing or depositing a check; however, they do authenticate checks after you attempt to cash or deposit them.

Most check cashers authenticate checks by either using a third-party verification system or by contacting the issuer/check maker.

If you are concerned that you may have a bad check, you should investigate the check yourself before trying to cash it since not all check cashing places will automatically decline it.

Check cashing with no verification might seem like the easy or obvious thing to do to get the funds, but cashing a bad check has consequences and is considered fraud if you do so knowingly.

Our related research explains how you can verify a check before you attempt to cash it.

We detail the check authentication policies of several check cashers below — banks, check cashing stores, and retail stores.

We gathered this information by contacting branch or store locations and corporate customer service representatives for companies of each type.

Check Verification Policies at Banks

Banks do not verify funds before depositing or cashing checks. However, most banks will authenticate checks and verify funds after you deposit a check by contacting the issuer directly.^[1][2][3]

For example, if you have an account at Chase Bank and deposit a check written on an account at Fifth Third Bank, Chase Bank may contact Fifth Third Bank after you deposit the check to verify the funds.

Though banks do not typically verify funds before the transaction, it is not advisable to knowingly cash a bad check at a bank. If you cash a check that bounces, the bank may charge you (and the check’s payor) a fee.

Check Verification Policies at Check Cashing Stores

Most check cashing stores authenticate checks by using a third-party system or by contacting the issuer or check maker directly.

We contacted the following check cashing stores for more details about their policies:

• ACE Cash Express: Checks are scanned and verified before being cashed.^[4] The check issuer may be called for verification if the scanner requests it.^[5]
• The Check Cashing Store: Locations may contact the issuing bank at their discretion to authenticate checks, store associates told us.
• Check Into Cash: Check Into Cash authenticates all checks using a third-party program. Also, it may contact the issuer and check maker, if necessary, at the discretion of the store location.^[6][7]
• CheckSmart: Individual stores have discretion over whether or not to verify checks. If a location chooses to do this it will do so by scanning the check into its computer or by contacting the bank or maker of the check, depending on check type, store associates told us.
• Money Mart: Individual locations may choose to contact the issuing bank at their discretion; verification varies by check type.^[8][9]
• PLS: PLS may contact the issuer of the check to authenticate it at the discretion of the individual location.^[10]

Note that while it is often up to the individual location whether to contact the issuing bank or verify the check, you should not try to cash a fraudulent or bad check at a check-cashing store.

These stores do verify the identity of the payee before cashing the check, and you will be held responsible by the company if you cash a bad check.

Check Verification Policies at Retail Stores

Retail stores that cash checks usually use third-party check authentication systems and verify the identity of the payee who is cashing the check.^[11][12]

When cashing a check at one of these stores, you will need to present your government-issued photo ID. The store may also request your Social Security number.

After verifying your identity, the store will run your check through a third-party authentication system like TeleCheck or Certegy, which will approve or decline the transaction automatically.

Declined checks will appear on your record with the third-party verification agency and may impact your ability to cash checks at that store and other stores in the future.