Retailers can charge more for bad checks

By Kathleen Vereen Dayton, The Sun News

Writing a bad check in South Carolina now can cost offenders more than ever, thanks to a new law that lets businesses charge up to $30 for each check that is returned for insufficient funds.

The new law, signed June 3 by Gov. Jim Hodges, evens out the penalty, which used to be $25 for bounced checks less than $100 and $30 for bounced checks more than $100.

“If you’re going to collect on a bad check, it’s going to cost you the same to go through the process if the check is for $95 or for $105, so the fee you’re able to collect should be the same,” said Frank Knapp, executive director of the S.C. Small Business Chamber of Commerce. “This simply gives a business the right to charge that much. They don’t have to. It is there for people who routinely get bad checks and gives them an opportunity to not lose quite as
much money in the long run.”

Jim Hatchell, president of the S.C. Merchants Association, said bad checks are a $200 million problem for the state’s retail industry.

“All this is a way for people that write bad checks to pay for some of the loss the industry has,” Hatchell said.

Grand Strand retailers say the beefed-up fees might help them recoup more of their lost money, but will not deter the worst offenders: those who habitually and intentionally write bad checks. They also say the fees rarely catch up with those who use stolen or fraudulent checks.

“Unfortunately, it penalizes the person who just makes a mistake. … For the person who’s out there purposefully doing this, they could care less,” said Vince Lowe, regional vice president of Belk department stores. “… Check fraud is the issue, and that’s where we get nailed the most.”

Alan Enlow, co-owner of Pet Paradise in Surfside Beach, said bad checks cost his business close to $5,000 each year, even though the majority of bounced checks turn out to be honest mistakes.

“We don’t charge a service fee the first time it bounces,” Enlow said. “We naturally assume it was a mistake and give them the benefit of the doubt and re-deposit. Ninety-nine percent of the time the checks go through the system and come back good the second time.”

Enlow said stiffer laws should be enforced to try to find bad-check offenders who skip town or use bogus addresses.

“I don’t know that enforcement agencies pursue aggressively the person who wrote the bad check,” Enlow said. `

Pursuing an offender also costs businesses, which must send a certified letter to the check writer and then file a warrant in magistrate’s court.

Judge Gerald Whitley, chief magistrate of Horry County, estimates the county issues about 5,000 warrants each year for bad check violations.

“Those folks in Loris and Aynor are a little bit easier to find than at the beach, where there is a more transient population,” Whitley said. “They come here and open up a bank account with two or three or four hundred dollars, then they can’t find a job and start writing bad checks. By the time the checks come back from the bank and the merchant starts doing what they can, those folks are gone.”

Mike Mankin, manager of Piggly Wiggly in Surfside Beach, said habitual offenders know the system.

“We had a lady a few weeks ago, she wrote 15 checks before the first check came back,” Mankin said. “They know they have two weeks to get in and out.”

Mankin said grocery stores see some of the biggest losses.

“The problem is tremendous, ” Mankin said. “It would blow your mind. Most businesses don’t cash checks, but as a service, people kind of use us as a bank. You come to a grocery store and you expect to be able to write a check. It’s just a tremendous risk every time we do it.”

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