Dealing With IOUs

Nowadays, everyone pays with a credit card.  At garage sales, the typical method of payment is cash, a time-honored tradition in the recycling of junk.  However, there are still some stubborn souls out there who want to pay with a check.  How can you handle this as a garage sale host?

A fraud IOU submitted by a costumer.

Most retail stores have stopped accepting checks for a very simple reason: fraud.  It's incredibly easy to walk in to a store, buy a ton of things, pay with a check, and then cancel it before it goes through, while the merchandise is already taken.  There is no way to verify a check until it is deposited at the bank, so unless the recipient goes straight to their local branch, the crook has a day or two to run off with the goods.

If a customer offers you a check, politely ask for another method of payment.  If they are trying to pay you with a check in the first place, it's likely they will say they have no other method of payment -- perhaps they left their cash at home, or they "always pay with checks."  At this point, you have to decide what you're going to do.  Are you going to make it your policy to accept checks?  Are you going to decline their purchases and turn them away?  No matter what you choose to do, be firm in your decision.  Don't hedge and lead the customer on; either accept the check or don't.

So you've chosen to accept the check, unable to turn away a paying customer for a few dollars.  In that case, there are some ways to help protect yourself from fraud.  Start by verifying the customer's address on the check, and make sure they sign it in your presence.  Ask them to please put their driver's license number and date of birth next to the address -- something retail stores do as a precaution.  Some customers may balk at this, and say they would prefer not to.  In that case, reassure them that you can't exactly steal their identity with just their driver's license, and if they continue to refuse, politely decline the check.  By this point, most people will give in and write it down; and if they don't, you have no suspicious checks to worry about.

When it comes to checks, some amounts are highly suspicious.  Anything under $10 is probably not fraudulent, as it's simply not worth the work of cancelling the check to save a few measly bucks.  On the other hand, be on your guard if a customer wants to pay for an item over $20 with a check; offer to hold it for later when they can come back with cash, or find other means to verify their check.  And certainly don't accept checks over $50, unless you know and trust the person you're selling to.

What about other forms of IOUs?  Perhaps your neighbor comes over and spots an item she really wants, but doesn't have her wallet on her.  You can ask her to write an IOU note on a scrap piece of paper and accept that as a future form of payment.  Hopefully you trust your neighbors enough to believe they will make good on their word.  And if not?  Well, you know where they live!  (Just kidding.)

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