Never take a check if the customer acts suspiciously. For example, he may try to rush you or your employees while you are checking his identification. Or he may appear nervous and be over-attentive to the people about him. Never take a check that has an old date. Never take a check that is dated in advance. WHAT CAN YOU RECOVER? Whether you can recover a bad check depends on the person who gave it to you and his circumstances. He may be one of your best customers who inadvertantly gave you a check when the funds in his bank account were insufficient. On the other end of the scale, he may be a forger. INSUFFICIENT FUNDS. Most checks returned because of insufficient funds clear the second time you deposit them. Notify the customer that he has overdrawn his account and that you are redepositing his check. But if the check is returned a second time, in some localities, it is the retailer's collection item. He must notify the maker and ask for immediate payment. You should check the practices of your bank. In the Washington, D.C. area, for example, after a second return for insufficient funds, the bank will not let you re-deposit the check. It is your collection item. Some stores prosecute if the customer does not redeem such a check within a week of the second return. Stores with a reputation for being easy-going about insufficient funds checks usually receive plenty of them. The procedure on prosecution depends on the State. In one jurisdiction, for example, a merchant must send the check writer a certified or registered letter and give him 5 days from date of receipt of that notice to comply before the merchant can prosecute. In another jurisdiction, the maker has 5 days after the date of notice to make the check good. In a third, a resident has 10 days to make good his check. NO ACCOUNT. Usually you've lost when the bank returns a check marked "no account." Such a check is evidence of a swindle or a fraud unless there has been an extraordinary error. In rare instances, a customer may issue a check on the wrong bank or on a discontinued account. You should quickly determine what the circumstances are. If the person is known in the community, proceed with your collection efforts. If you find yourself "stuck" with the check, call your police department. CLOSED ACCOUNT. A check marked "closed account" is a warning of extreme carelessness or fraud. Accounts are closed by both individuals and by banks. The latter may close an account because of too many overdrafts. An individual may open a new account by removing funds from his old account. In such case, he may forget that he has issued a check that is still outstanding against the old account. If you don't get your money back within a reasonable time, you should consider prosecuting the check writer. FORGERY. Forged checks are worthless. Any alteration, illegal signature(s) of the maker of the check, a forgery of the endorsement, an erasure or an obliteration on a genuine check is a crime. Watch out for smudged checks, misspelled words, poor spacing of letters or numbers indicating that changes may have been made. Payroll checks with the company's name and address typed in could be fraudulent. Most payroll checks are printed. When you suspect forgery, call the police. Thus, you help protect yourself and others against further forgery. You should refer a forged U.S. Government check to the field office of U.S. Secret Service. A forged check transported in interstate commerce is a Federal offense. You should check with your lawyer about local practices on collecting through the courts on a bad check which a customer used to pay on his account. In the Washington, D.C. area, for example, merchants cannot collect through the courts on such a bad check. The reason is: The merchant still has the account and no injury was suffered through the issuance of the check. The account may be collectible through the usual civil procedures used for collection purposes. A bad check issued to pay for merchandise taken is not a theft but a misdemeanor. It is an exchange-the checks for goods. A misdemeanor carries a lighter penalty than a theft since a check may be collectible through civil procedures. Criminal action may be taken through signing a formal charge with the police. GET EVIDENCE. You cannot prosecute bad check passers without good evidence. The person who cashed the bad check should be positively identified and connected with the receiving of money for it. TEACH EMPLOYEES BY POINTING OUT ERRORS One way to keep employees aware of what to look for is by showing them the bad checks which the bank returns. Hopefully, you don't have as many as one large city store that received 28 worthless checks in less than a week. When they were analyzed, the following common mistakes were highlighted for employees: On three, the written and the numerical amounts differed. Two were not endorsed at all. One was endorsed improperly. Two were made out to a different store. One had no signature where the maker should sign. Two were dated incorrectly. Ten were counter checks and were unacceptable. To avoid such mistakes, impress on your employees the necessity to read, compare, and think. FILING CLASSIFICATION: ADMINISTRATIVE PRACTICES-Copies of this Aid are available free from field SMALL BUSINESS ADMINISTRATION WASHINGTON, D.C. 20416 OFFICIAL BUSINESS Postage and Fees Paid Small Business Administration SUMMARY Small mall stores are prime targets for burglars and holdup men. Seeking dark and easy-to-enter stores, burglars usually operate at night. Attracted by careless displays of cash, holdup men often strike at opening or closing time or when customer traffic is light. Because you may be the next victim of a robbery or a burglary in your area, you should be aware of the precautionary measures that are available to lessen the impact of these two crimes. This Aid discusses some of them for both types of crime. BURGLARY: The author, S. J. (Bob) Curtis of Dayton, Ohio, is a management consultant. BURGLARY is any unlawful entry to commit a felony or a theft, even though no force was used to gain entrance. Retailers whose stores have been broken into know that burglaries are costly. What these business owners may not be aware of is that the number of burglaries has doubled in the past several years and, therefore, they may be two-, three-, or four-time losers if the trend is not reversed. Moreover, few burglars are caught. Almost 80 percent of all burglaries go unsolved. Police prevention and detection are difficult because of lack of witnesses or evidence to identify the criminal. Prevention must start with the small merchant himself. He can use a combination of measures to protect his store from burglars. Among the things he can use are: (1) suitable locks, (2) an appropriate alarm system, (3) adequate indoor and outside lighting, and (4) a secure store safe. In addition, the owners of high-risk stores-ones in areas with a reputation for rampant crime-should also consider using: (1) heavy window screens, (2) burglar-resistant glass windows, (3) private police patrols, and (4) watchdogs. LOCKS Be sure to use the right kind of lock on your doors. In addition to being an obstacle to unwanted entry, a strong lock requires a burglar to force his way into the store. Under standard burglary insurance policies, a forced entry is necessary to collect on burglary insurance. Most experts on locks agree that the PIN-TUMBLER CYLINDER LOCK provides the best security. It may have from 3 to 7 pins. Locksmiths caution, however, that a burglar can easily pick a lock with less than 5 pins. (There are a few non-pin tumbler locks that give high security, but you should check with a locksmith before you use one.) Dead bolt locks should be used. They cannot be opened by sliding a piece of flexible material between the door edge and door jamb. (Dead bolt is a lock bolt that is moved positively by turning the knob or key without action of a spring.) When you use a double cylinder dead lock, the door cannot be opened without a key on either side. This fact means that on a glass door there is no handle for a burglar to reach by merely breaking the glass. Such a lock also provides protection against “break-outs" -a thief concealing himself before closing time and breaking out with stolen goods. Safeguarding entrance ways, especially the rear door, cannot be over emphasized. Bar the rear door, in addition to locking it, because many burglars favor back doors. INSTALLING LOCKS. The best lock is ineffective if it is not properly installed. For example, if a lock with a 5" long latch bolt is installed in a door that is separated from the door-jamb by 1⁄2", the effective length of the bolt is cut to only 1⁄4". Have a locksmith check the locks on your exterior doors to be sure that your locks give you the right protection. KEY-CONTROL To keep keys from falling into the hands of burglars, issue as few keys as possible. Keep a record on the keys you issue. Exercise the same care with keys as you would a thousand dollar bill by doing the following: 1. Avoid the danger of key duplication. Caution employees not to leave store keys with parking lot attendants, or in a topcoat hanging in a restaurant, or lying about the office or stockroom. 2. Keep your records on key distribution up-to-date so that you know what keys have been issued and to whom. 3. Whenever a key is lost or an employee leaves the firm, without turning in his key, re-key your store. 4. Take special care to protect the "master key" used to remove cylinders from locks. 5. Have one key and lock for outside doors and a different key and lock for your office. Don't master-key because it weakens your security. 6. Have a code for each key so that it does not have to be visibly tagged and only an authorized person can know the specific lock that key fits. Don't use a key chain with a tag carrying the store's address. 7. Take a periodic inventory of keys. Have employees show you each key so you will know it has not been lost, mislaid, or loaned. BURGLAR ALARMS The silent central-station burglary alarm system gives your store the best protection. The reason: It does not notify the burglar as does a local alarm-such as a siren or bell-outside the store. A silent alarm alerts only the specialists who know how to handle burglaries. In large cities, central alarm systems are available on a rental basis from private firms in this business; in small cities, they are often tied directly into police headquarters. Part of the cost for installing a silent alarm system will sometimes be defrayed by a reduction in your burglary insurance premium. Although a building-type local alarm is cheaper and easier to install, it too often only warns the thief and is not considered by specialists to be as effective as a central stations alarm. Of course, if no central alarm service system is available, or such an alarm is not economically feasible, then by all means install a building alarm. Whether your alarm is central or local, you have a wide choice of alarm sensing devices. Among them are radar motion detectors, invisible photo beams, detectors that work on ultrasonic sound, and vibration detectors. Also there is supplemental equipment, such as an automatic phone dialer. This phones the police and the store owner, and gives them verbal warning when an alarm is breached. |