Centralized Returns Processing

Outsourcing the handling of payment items returned unpaid through the banking system is a viable option for businesses faced with ever-increasing payment processing volume. Processing time is critical to the payment cycle and the affects on cash flow dramatic. Every outsourcing effort has to justify itself through a cost and benefit analysis—fortunately the true costs of processing returned NSF checks are easily calculated and compared with the cost to outsource the process. Without even considering labor and other costs associated with processing payments, the savings gained by eliminating the bank’s return check fee (typically $3 - $8 per NSF item) versus the Centralized Check Return Service fee, is significant.

Affirmative Technologies, Inc., in conjunction with our Nationally Chartered-FDIC Insured Alliance Bank Partner, and in cooperation with the Federal Reserve, have developed a process whereby NSF returned checks are funneled into one location for processing and further handling. With our Centralized NSF Check Return Service, it's easy to consolidate an organization's unpaid and returned checks at a single bank, even if they utilize multiple depository banks nationwide. In addition, the NSF check collection process is simplified and Merchants receive information on all returned items in one complete file or report, giving them more comprehensive information.

Centralizing returned checks require the use of a special endorsement designating Affirmative’s Strategic Bank Partner as the "bank of first deposit" on all checks deposited at any depository bank. Our Strategic Bank Partner makes this process easy by providing verbiage for a special endorsement stamp, or by working with a merchant’s data processing department or software vendor to help create the proper endorsement via their point-of-sale equipment (The endorsement stamp would read as follows: “For Deposit Only, ABC Company, Acct# - 123456789, For Return purposes, ABA #063113442.)

All returned checks that show our Strategic Bank Partner as the "bank of first deposit" are automatically forwarded by the Federal Reserve to our Bank by each paying bank. Plus, when we handle all returned checks, we’re able to pass on significant volume discounts.

The following are some additional benefits and options offered by this service:

• Centralizing NSF Check Returns reduces the typical Bank Return Fee from $5 to less than $2.00 per item or less depending on volume, in many cases representing a 50% reduction in overall cost. In addition, centralizing check returns places the focus squarely on collecting outstanding items, leading to higher collection ratios and increased cash flows.
• Collections efforts can be expedited even more if all eligible returned checks are electronically represented (debited) from the Checkwriter's account. Representment can be timed on Friday, often the Checkwriter’s payday, which provides a better chance of collection. If the check is returned a second and a third and final time, we can make additional representment attempts before sending the returned item directly to the Merchant for collection action, or we can provide secondary check collection services via a third party vendor.
• Returned checks can be rerouted to a location specified by the Merchant (without incurring an additional bank charge) without any further processing, or re-deposited manually

Centralized NSF Check Return Service Pricing

There are three levels of service available for Centralized NSF Check Returns:

Basic Return Service

• NSF item intake, imaging, processing
• Return NSF paper checks to Merchant
  
  1. Merchant location(s) deposit consumer checks, with a special endorsement stamp on the back, to Local Depository Banks.
  2. NSF check returns are re-directed by the Federal Reserve from each local depository bank to a Central NSF Check Receiving Bank acting as the gathering and processing point.
  3. Central NSF Check Receiving Bank images NSF items received from the Federal Reserve, retaining retrievable images of NSF checks for seven years.
  4. Central NSF Check Receiving Bank ships NSF paper check returns to Merchant’s Corporate Office or 3rd Party Processor for ACH processing. 

*Basic Return Service pricing is a one-time per item transaction charge, plus shipping charges for returning paper checks to merchant, and a $50.00 per month processing fee.

Manual Redeposit Service

• NSF item intake, imaging, processing
• Manual redeposit service
• Return uncollected NSF paper checks to Merchant
  1. Merchant locations deposit consumer checks, with a special endorsement stamp on the back, to Local Depository Banks.
  2. NSF check returns are re-directed by the Federal Reserve from each local depository bank to a Central NSF Check Receiving Bank acting as the gathering and processing point.
  3. Central NSF Check Receiving Bank images NSF items received from the Federal Reserve, retaining retrievable images of NSF checks seven years.
  4. Central NSF Check Receiving Bank manually re-deposits eligible NSF check returns.
  5. Central NSF Check Receiving Bank ships uncollected NSF paper check returns to Merchant’s Corporate Office or secondary collection entity.

** Manual Re-Deposit Service pricing includes the initial per item transaction charge, plus an identical per item transaction charge for the manual redeposit returns, plus shipping charges for returning paper checks, and a $50.00 per month processing fee.

Electronic Redeposit Service

• NSF item intake, imaging, processing
• Data entry – Third Party Vendor
• Electronic representment – In House or Third Party Vendor Option
• Manual redeposit of business checks
• Return uncollected NSF Check paper checks to Merchant.
  1. Merchant locations deposit consumer checks, with a special endorsement stamp on the back, to Local Depository Banks.
  2. NSF check returns are re-directed by the Federal Reserve from each local depository bank to a Central NSF Check Receiving Bank acting as the gathering and processing point.
  3. Central NSF Check Receiving Bank images NSF items received from the Federal Reserve, retaining retrievable images of NSF checks for seven years.
  4. Central NSF Check Receiving Bank electronically resubmits eligible consumer NSF check returns a 2nd and 3rd time until collected.
  5. Central NSF Check Receiving Bank manually re-deposits eligible business NSF check returns.

Data Entry Information Captured by Third Party Vendor:

1. Checkwriter’s Account Holder’s Name
2. Checkwriter’s Name & Address
3. ABA (Also known as Bank Transit Number) 9 Digits
4. Checking Account Number
5. Payment Amount
6. f) Check Number
7. g) Reference Number (number that will identify payment and Checkwriter)
8. h) Checkwriter’s Email address and or call back phone number (if required)

Central NSF Check Receiving Bank ships uncollected NSF paper check returns back to the Merchant’s Corporate Office or to secondary collection entity.

 *** Electronic Re-Deposit Service pricing includes the initial per item transaction charge, plus an additional ACH transaction charge (plus an identical amount for returns) based on transaction volume, plus shipping charges for returning paper checks, and a $50.00 per month processing fee.

 In addition, Electronic Re-Deposit Service Customers must establish an ACH Clearing Account with Affirmative’s designated ODFI. No charge for application used for in-house ACH processing, $49 per month ACH access fee applies.