Evaluating the pros and cons to accepting personal checks
Some school sponsors debate whether or not to accept personal checks for student fundraisers. Some feel that having to deal with bad checks is simply not worth it.
If the sponsor decides to not allow checks, they’ll sometimes request that we put ‘No checks accepted’ in their parent letter. By putting it in writing, they assume that everyone will read it, yet personal checks inevitably end up inside a student’s money collection envelope anyway. Sponsors then have to track down buyers and attempt to collect an alternative form of payment. But if you decide to accept personal checks, having to deal with a few bounced checks may be worth it because you're giving people another payment option. What should you do?
Should we Accept Fundraising Checks?
Making the decision to accept personal checks should depend on the percentage of returned checks you’ve received from previous sales. Ultimately, it'll be determined by what you think you can tolerate. If you only have to deal with a couple of returned checks out of a few hundred payments then you should probably accept personal checks. Still, determining what percentage you can tolerate is an individual choice.
Enforce a Check Payment Policy
If you decide to accept checks, you should have a policy in place to deal with any issues. We provide an insufficient funds notice for school wide sponsors inside our School Fundraising Guidebook. They are able to make copies of this letter and use it as needed. Some sponsors will even warn everyone up front that returned checks will incur a fee. We don’t recommend this policy for every school, but it can definitely be a deterrent.
Since most sponsors require payment upfront with the order, this allows additional time for checks to clear. Checks are deposited prior to the group receiving their order. Sponsors can then choose to hold individual orders until proper payment is received.
Impact of Cash-Only Payments on Fundraisers
Another important consideration is how not accepting checks would impact your sales results. Will less people buy if you only accept cash or money orders? More than likely the answer is yes. We have found that the more you restrict payment options, the fewer customers you will have. Some people choose not to carry cash and obtaining a money order requires extra effort. Unlike cash, personal checks offer the advantage of a paper trail, and most of us like that security.
Should you allow personal checks for student fundraisers? If you can, it'll probably benefit your group financially.