What Happens if an E-Check Bounces?

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What Happens if an E-Check Bounces?

If you're using eChecks for payments, it's essential to understand what happens when one bounces. An eCheck bounce occurs when there isn't enough money in the payer's bank account to cover the transaction. This will eventually hurt your business because banks that accept checks online will see you as a high-risk merchant, making it difficult for you to pay your vendors, suppliers, and employees.

What Happens When an eCheck Bounces?

  1. Notification: When an eCheck bounces, the bank should notify you and the payer. 
  2. Reason for Bounce: The notification will typically provide a reason for the bounce, such as insufficient funds, account closed, or a routing number error. This information helps you understand why the transaction failed.
  3. Resubmission: Depending on your payment processor, you may have the option to resubmit the eCheck. However, it's essential to address the issue that caused the bounce, such as verifying the payer's account details or ensuring sufficient funds.
  4. Fees: Bounced eChecks often come with fees. Your payment processor may charge you for each bounced transaction. Be sure to check your contract for fee details.
  5. Communication: It's a good practice to communicate with the payer about the bounced eCheck. They may not be aware of the issue, and resolving it promptly can help maintain a positive business relationship.
  6. Alternative Payment: If resubmission isn't an option or if the payer cannot resolve the issue, consider alternative payment methods, like credit cards or other electronic payment options.

In conclusion, when an eCheck bounces, it's essential to act swiftly, understand the reason for the bounce, and take appropriate steps to resolve the issue. Open communication with your payer can help prevent future payment problems and ensure a smooth payment process.

As a business owner receiving payments through electronic checks, you must become familiar with what E-check processing involves to understand how to streamline your payment processes. 

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