Can a Grocery Store Tell If You Have Money in Your Checking Account When You Write a Check?

Grocery stores often use digital systems that tell them whether to accept your check. Generally, the decision isn't strictly based on how much is in your checking account. Instead, the systems often do verify that the account exists and that is has funds in it, but it will not tell the merchant how much is there.

Can a Grocery Store Tell If You Have Money in Your Checking Account When You Write a Check
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The Verification Process

A number of companies offer electronic check verification systems to merchants of all types and sizes. Stores, including grocery stores, often take advantage of these services to help to reduce losses caused by accepting bad checks. Some of the services even guarantee to pay the store the amount of the check if the service says the check is okay to accept.

When a merchant gets a check, the cashier runs it through a scanner or manually enters certain data from the check, such as the account number, routing number, the check writer's driver's license number and state of residence. The verification system typically uses one of two approaches. One method searches its database to see if the person is in the system for any reason, usually for having written a bad check to another merchant that was never made good. The other method verifies the account itself.

Different merchants use different systems, and some don't do any verification at all besides checking identification.

Database Search

If a customer is found in the database, the system tells the merchant to reject the check. If he is not found, the merchant is informed that the check can be accepted. This process takes only a few seconds. The customer's bank account is not accessed, so there is no way for the merchant to know whether or not you have money in the account, only if you have had problems with checks elsewhere.

Account Verification

In the second type of system, your bank account is checked and verified. The system looks to see if the account is open and valid, and whether or not it has a positive balance. It does not report the balance to the merchant, only the account status. A grocery store that uses such a system can tell if there is money in your checking account or not as of a particular point in time, such as the morning of the day you write the check.

Approved But Insufficient Funds

Even though the merchant can't find out if you have enough money in your bank account to cover a check, your check might be electronically deposited and presented to your bank for payment the same day it was written. If the money isn't there, the check will be returned to you for payment, and you'll incur a charge from your bank and very likely have to pay a fee to the merchant, as well.

Verification System Errors

Verification systems can make mistakes, refusing a check that should be honored. If this happens to you, the best course of action is to pay for your merchandise another way, such as with cash or a credit card, and then take up the issue with the company providing the verification services. The merchant can provide you with contact information.

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