Easiest way for buyers to make payments are Personal checks

Personal checks are the easiest way for buyers to make payments. They can just dash off a check, put it in the mail, and bam, you’re paid. But it’s not always as easy for the seller. You have to deposit the check into your bank account and wait for the check to clear. Believe it or not, in these days of electronic transfers, wiring funds, and international money transfers, you might wait more than two weeks for a check to clear.

Paper checks

After you deposit a check, your bank sends it to a central clearinghouse, which then sends it to the signatory’s bank clearinghouse. Then the individual bank decides whether the check can be paid. You may think that a way around the system is to call the bank and see whether the account currently has sufficient money in it. The account may have sufficient funds when you call, but the depositor can withdraw money before the check gets through the system and then the check bounces. And don’t forget the 24-hour turnaround rule: Even if the bank has the money and you’re standing there with the check, the bank can deny payment within 24 hours, leaving you with a bad check.

Even though everything seems to be electronic these days, the paper routing of old-fashioned checks can take two weeks or longer. I’ve received only one bad check as an eBay payment. I deposited the check, waited ten business days, and then shipped the item. On the eleventh business day, the bank sent me the bounced check. The buyer clearly knew that the check had bounced but didn’t notify me. Luckily the buyer made good on the check.

If you find yourself with a check that’s bouncing higher than a superball and an uncooperative buyer, remember that it’s against the law to pass bad checks. To see a list of penalties, state by state, visit the National Check Fraud Center.

In many states, if a resident passes a bad check, you are legally able to collect three times the amount of the bad check! Bottom line? I warn all my winners who pay with a personal check that I may hold the item for more than two weeks before I ship. I make exceptions for buyers who have an excellent feedback rating or who I’ve successfully done business with before. Dealing with personal checks isn’t worth the potential grief they can cause. Try to get an e-check or an instant transfer through PayPal (see the following section), or have your winners pay with credit cards through a payment service. For more on payment services, see the “I Take Plastic: Credit Cards” section, later in this article.

Bank debits (e-checks and instant transfers)

Despite the attached fees and a short waiting period, accepting a PayPal e-check or an instant transfer is a nice, clean transaction because it’s immediate cash in your account. After indicating that they want to pay with an e-check, buyers must register their bank account with PayPal and give them the information required When a buyer pays with an electronic check, it will take as many as four days to clear. An instant transfer (on the other hand) credits your account immediately as long as the buyer has a credit card (or bank debit card) as a backup funding source should your instant transfer fail. PayPal allows you to accept e-checks for up to $10,000 and will charge you the standard fees.