Innovative Payment Solutions LLC

Sad Truth #1:

Check guarantee is rarely the best choice for most merchants. These slick sales presentations divert your attention away from the actual amount of your returned checks and recovered checks and focus you on the total of all the checks your store accepts. They claim their company will guarantee all your checks. Nothing could be simpler - right? Wrong, nationwide guarantee averages only account for about 85% of the bad checks.

The Check Guarantee Company knows the frequency of returned checks, based on many factors, such as the type of business, location of business, historical check returns, etc. but they emphasize the total dollar amount of checks they are guaranteeing; not the amount that actually bounces. This is a huge difference. They set themselves up to take Credit for the 98% of checks that will never bounce anyway.

The Check Guarantee Company avoids reporting your check losses based on the amount of checks that bounced. Instead, they want the client to evaluate their losses compared to the total dollar amount of all the checks accepted. They boast "our customers lose less than 2%." This is very very misleading. You could probably throw away all your bounced checks and lose less than 2% of the total dollar amount of checks you accept.

Sad Truth #2:

Not all of your checks will be guaranteed. As stated earlier, national averages suggest about 15% of your bad checks will not meet the almost sure to fail needed criteria test (missing phone numbers, ID, street address, DL #, approval code, etc.). Therefore, your check is not guaranteed, and will be either returned to you unrecovered, or assigned to a special collection unit that will attempt recovery of the check, however, they do not guarantee the check. Despite good training, many employees don't routinely obtain all the needed information to guarantee every check, especially during busy times at the cash register. Yet the guarantee expense is always churning away at every check you take in.

Sad Truth #3:

If you were to carefully examine the churning away effect of the guarantee expense on every check on a monthly basis, you will find an astounding fact. The monthly guarantee expense is almost always higher than the total monthly cost of all your bad checks even if you couldn't recover any of them. Because check guarantee works much like an insurance policy, here is what happens. If your company has a spike in the frequency of bad checks, even if it is cyclical or temporary, and the guarantee company hadn't planned for, the guarantee company will raise your rate.

Sad Truth #4:

Do you want a huge insensitive Corporation pressuring your customers to pay? With almost all Check Guarantee Companies you will lose the ability to control the way your customers are treated. Once your customer's check has been "guaranteed" the Check Guarantee Company owns the check and may handle your customer based on their customer service standards not yours. Frequently a good customer with lost or stolen checks has extreme difficulty getting the cooperation of the Check Guarantee Company in Clearing their good name. Wishing to avoid future hassles, the customer often refuses to shop again at stores that use this check guarantee service.

Saddest Truth #5:

Bottom line is this, you are actually being guaranteed for your bad checks with your own money through the churning away effect of your guarantee rate that they assigned you. They are not guaranteeing a single check with their money, it's all yours. The truth is you should evaluate your check recovery based on the dollar amount of returned checks - not the amount of all the checks you accept.

Those are the facts and as you can plainly see, check guarantee isn't usually the best option for most companies. Now for one last Sad Truth.

Sad Truth #6:

For those companies currently using check guarantee and now may be pondering the validity of that decision; Have you read the fine print on your contract? You almost assuredly signed a long term contract 3-10 years with steep, steep penalties for early termination (usually $1,000s to terminate). IPS wishes we had good news for you and that your termination would be easy and cost effective, but there may still be a silver lining for several of you. The $1,000s to terminate for many of you, depending on how much time is remaining on your contract, may be far less expensive than paying the churning guarantee rate for that same duration.

Partner with IPS and see why merchants all over the Northeast are raving about IPS's phenomenal Bad Check Recovery Program. We'll teach you how to improve your Check Recovery Ratio by about 35% with one simple technique, a technique that costs you nothing.

CALL IPS Toll FREE TODAY 1-866-477-2432