At the register

It is a challenge to run a successful business. I'm guessing that you got into the pizza business because you like making people happy and seeing them enjoy the food you prepare and serve. And I'm absolutely sure you didn't get into the pizza business because you wanted to deal with chasing people that write bad checks. But the more you know about personal checks and processing the NSF variety, the more money you will make.

Here's why:
According to the American Banking Association 89 percent of the U.S. population has a checking account, and 60 percent of non-cash payments are made by check. Since there is no service charge by the bank to write a check, many credit wary people find check writing a viable payment alternative to cash. As we all know, checks can bounce. The national average of checks that bounce is about 1 percent. But that one out of a hundred has soured some pizza operators on the whole idea of accepting personal checks. This can be an unfortunate business decision because one of the favorite things to write a check for is pizza. But I'm sure most pizza operators would agree that when you take away the option to pay by check you lose customers. Estimates on the loss range from 10-20 percent. That is especially true on Thursday night.

So if taking checks is going to increase sales, what options are there for the pizza operator who wants the business without the hassle or unreasonable risk?

Doing it yourself?
Trying to collect on returned checks yourself is how everyone used to do it. Some still use this method, but it can poison the customer relationship

So, many business owners leave the letter writing and phone calls to a collection agency. The problem with letting a collection agency do this work is that they take a share of the face value and leave little for the pizza operator.

Using a service?
First of all, be careful about any service that requires you to pay a registration fee or sign a contract that binds you for any period of time. If the service is any good they can make money without charging you. They will get paid by the NSF check writer in the recovery process. Also, do you really want to send your checks to someone else? What happens when your customer calls and you don't have the check.

I'll tell you what happens.

You have a customer service issue and no answers.. The best option for getting paid on NSF checks is electronic check re-presentment (RCK). Sounds technical – but it's really simple and there are basically two ways to do it.

One way is to send your checks to a service. Your bank will most likely forward your checks (some banks will not and you have to get the check first and then pass them along) to the service you choose. They enter and process your NSF checks for you and pay 100 percent of what they are able to collect. According to the organization that monitors all payments of electronic re-presentments the payment rate is 65 percent for NSF checks. Typically your service provider keeps the fee allowed by the state. On average across the country that fee is $25.00 per check. Companies that supply this type of service to the industry include: CheckBack, CheckCare, Protect-a-Check and FedChex.

Another option for electronic re-present is to use a website and re-present NSF checks online. One company who offers this option is JustChex. These options for recovering money from NSF checks have experienced a rapid growth among chain and independent pizza operators. The added money and being able to regain control over the processing of these checks are sited as major benefits.

"This service lets me get to the bank account of anybody that writes me an NSF check so I can get paid," says Dan Brumleve of Island Pizza, Inc., a Domino's Franchise.

"We get over a hundred returned checks a month. I enter them online and get paid. It is that simple. My collection of fees above the face value on our checks is over $1,000.00 a month." Julie Alvarado, Papa O's Pizza.

  1. Only NSF items are eligible.
  2. Only items less than 180 days are eligible.
  3. Only items less than $2,500 are eligible.
  4. If the physical check has been presented twice, RCK may be transmitted only once.
  5. If the physical check has been presented once, RCK may be transmitted twice.
  6. If a merchant is going to collect via RCK, they must provide notice to the check writer in advance. (For example, a sign in a retail environment or on a statement in a billing environment.)
  7. Only checks drawn on consumer accounts may be collected  through RCK.
  8. A separate authorization must be obtained if a fee is collected.

For information on the companies mentioned in this article visit,,, and

Richard McShirley is the Director of Business Development for JU$TCHEX. His experience in the collection of returned checks includes the classic collection agency, electronic check recovery agency, and online check recovery models. Richard is a founder of JU$TCHEX, a company that provides clients with direct online access to process their returned checks for payment in a method that complies with applicable laws and operating rules.

Richard McShirley
Director of Business Development
500 Esplanade Drive, Suite 700
Financial Plaza
Oxnard, CA 93036