Image Source
Author Bio: Annie Harrington is a small business owner and freelance writer. She is also keenly interested in all aspects of design, including how to personalize checks.
How long has it been since you pulled out your checkbook to pay for anything at the supermarket? Probably quite a long time, based on the Federal Reserve’s statistics, showing that from 2006 to 2009 checks dropped from accounting for 30.5% to 24.5% of all payments made that were not cash. The amount of people actually using checks in the retail environment was actually probably much lower at the time too, with one survey showing that only 4% of holiday shoppers in 2009 would be using personalized checks to pay for gifts—one can only imagine how usage has dropped in the last couple of years. Yet, many merchants are still accepting checks anyway, with some businesses reporting that checks make up a majority of the forms of payment that they receive! So why are checks still being accepted?
The Downsides
There are reasons that check usage is declining. For example, when somebody that’s standing in the front of a long checkout line pulls out a checkbook, you can almost always expect a collective groan to come from the rest of the line behind them. Not only that, but accepting checks has become a more precarious practice, as plastic transactions can be confirmed at the time of purchase, while merchants run the risk of taking a check that will bounce. For the reasons listed above, quite a few merchants simply refuse to accept checks. Starbucks is one business that has added checks to their list of payment forms that are not accepted, and it’s not uncommon for restaurants, out of fear of bounced checks, not to accept checks anymore either. Ultimately, however, businesses that refuse checks are in the minority.
Not Dead
Small businesses account for a large amount of businesses that not only accept, but prefer checks as a form of payment—of course, these are generally B2B establishments, but it goes to show that the check is not yet dead. Small businesses and large retailers alike are still accepting checks for a number of reasons. For example, merchants still have to pay a percentage for every transaction that utilizes plastic, while they get to keep all of the profit that comes from a paper check. If the fees associated with debit and credit card transactions drops significantly, that may be the death of the check—but that doesn’t look to be happening any time too soon.
Demographic
As retailers decide whether or not they want to keep accepting checks, they will be basing their decisions on a number or things, including customer demographic and flow of customer traffic. In situations where there will be longer lines and an expedited process is essential to the flow of business, don’t be surprised to see checks being phased out—however, when retailers have a customer demographic that is high in the elderly population, they will be less likely to begin rejecting checks, out of fear of losing their less-tech savvy customers.
So when it comes to deciding whether you’re going to pay with cash, check, or card, rest assured that your personalized paper option is here to stay.
Checks are good for B2B transactions, for renting houses or apartments and birthday presents. Besides that you won’t find me writing a check for anything if I can use plastic!
You’re right. The only times I’ve written checks have been for paying rent and when I owed people money and didn’t have that amount of cash on hand. I usually give people gift cards for their birthdays, but checks are also good!
I pay my monthly condo fee via paper check, and I usually forget to do it so often that my neighbor (who manages our three-unit condo association’s finances) has to leave me a post-it reminder. It would be so much easier to do it via direct transfer, but she does everything by hand still!
That’s so sweet that she does that! One of my landlords when I was living in a house off-campus would call us on the 1st of the month to remind us.
I take post-dated cheques from our tenants. It’s easy and simple to keep track of.
i write cheques only for my kids activities that i need a receipt for at income tax time. a funny story the other day actually. i filled up my car with gas and went in to pay. after i opened my wallet i realized i had removed all my cards and put them in my jacket pocket. problem was it was my jacket that was hanging on the hook at home, 40 mins away. i had cheques in my wallet and asked if i could pay with that. they refused and i had to call my dad (im a grown woman with 3 kids!) because i couldn’t get ahold of my husband and he had to give them his credit card number over the phone.
cheques are dying. no way around it.