Like it or not, more and more businesses are adopting the practice of electronic check conversion. You’ve probably already seen it. You write a check and hand it to the cashier, who runs it through a machine, then hands the voided check and receipt back to you. What just happened? Did you get hit by a train?
No worries. You just experienced electronic check conversion (ECC) and now it’s time to get your financial literacy up to speed and understand it.
Stores love the process for a few reasons. First of all, they get their money faster than with a paper check transaction. Information from the check is immediately collected (account number, routing number, financial institution, check number) and used to debit funds from your account. Normally this happens more quickly than with the traditional paper check process, so be sure you have the money in the account! The second reason stores love electronic checks is they don’t have to keep track of the paper check – they give it back to you right away. It doesn’t take up space in their cash register and they don’t have to worry about losing it before it is deposited in their bank.
Any business that uses the ECC process must post notice prominently at the checkout counter. If you don’t agree to it, they’ll probably make you use another form of payment like credit/debit card or cash. Keep an eye on your account summary each month. If you find an ECC error, law requires your financial institution to investigate.
At Young Wealth, we don’t believe ECC is inherently good or bad, but it is part of the digital migration that will likely see the end of paper checks entirely before too many more years pass. The key is to be aware of how your payments are processed so you can monitor your account for errors.
The Young Wealth Team