Check payments by fax

It can be extremely difficult to extract a check payment from a customer, especially if the seller wants an immediate delivery that will cost the customer an overnight delivery charge.

An alternative is to have the customer fax or e-mail a scanned image of a completed and signed check to the seller, and then follow these steps:

  • Obtain check printing software, which is available from many companies (search for “check by fax software” on an Internet search engine).
  • Enter the information from the check into the software.
  • Print the check using check security paper, which can be obtained from a local office supply store. Use standard printer ink, not the special magnetic ink character recognition (MICR) ink used by banks. The check printing software will include the following text in place of the signature line:

SIGNATURE NOT REQUIRED
Payee to hold you harmless for payment of this document
Absence of endorsement is guaranteed by payee’s bank.

  • Deposit the check at the company’s bank. This may require manual processing by a bank teller, since the bank’s check scanners will not detect any MICR encoding on the check.
  • Retain a copy of the faxed or e-mailed check, as proof that the customer authorized payment.

An alternative is to obtain the required information for a check payment over the phone, but doing so provides no evidence that the customer agreed to make the payment. Also, it is easier to make a mistake when writing down information obtained over the phone. Consequently, this approach is not recommended.

Yet another option is to send the customer a form to fill out that includes all of the information normally found on a check, as well as an authorizing signature line. This should be accompanied by a voided check, so the seller can reference a check number.

The end result of this process is the complete elimination of the mail float from the collections process. This approach is time-consuming, but is at no cost to the customer, who may find it an appealing alternative compared to paying for an overnight delivery.

If you elect to use this approach to collect funds, be sure to fully document the steps taken, as well as the authorization given by the customer, in order to have proof available if the customer ever contests the payment.