Stale Dated Checks
What is a “stale” dated check? How does it go “stale”? Do all checks go “stale”?
These are some of the questions for which the manager of a check cashing operation should have an answer. And, his or her employees should know the procedures of the business for minimizing the risk of loss.
Simply put… a stale dated check is one that is more than six months old. The bank on which it is drawn has a right to pay it but also has the right to send it back unpaid. The decision is theirs.
From a practical standpoint, most banks are not checking the date of items presented as the items go through an automated process. Exception items such as large dollar amounts and check numbers out of range of recently paid items sometimes get special review.
The best practice to minimize risk of loss is to not accept checks for encashment that were issued long ago. For example, it may not make sense for a person to present a paycheck that is two weeks old or more.
Cashier’s checks and Official checks are different than regular checks. They are an official obligation of a bank and do not go stale.
Another exception is Treasury checks. They do not go stale but instead are “voided” at twelve months and will not be paid.