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elbanditoroso's avatar

What are the ethics and economics of cashing a check for 10 cents?

Asked by elbanditoroso (25826points) 1 month ago

I overpaid a bill – I owed $74.90 on an account I rarely use. I paid $75.00, so the next month I had a credit balance of ten cents.

I didn’t use that account for 30 days, and the bank mailed me a check for a dime. Nice of them.

Here’s the background of my question:

1) the bank spend 55 cents to mail me the check plus the cost of the envelope and the person who stuffed it.

2) If I deposit the check through cell-phone deposit, it will cost them bank some amount of money to process and verify the amount, then proof it and store the image and so on. Plus whatever processing the Federal Reserve does.

3) If I go into the bank to deposit the check, then I’m taking some minutes of the teller’s time, plus the same back-office processing.

From the standpoint of resources and effort, my bank and the merchant’s bank are spending some overhead in order to process my 10 cent check.

Ethically, should I be placing them in a position of expending their resources for a measly 10-cent credit to me?

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6 Answers

jca2's avatar

The check is probably spit out automatically by their computer. I got a $3.00 refund from Verizon for a phone I had years ago (so this was years later). I held onto the check so long I could no longer deposit it, and then I sent it back to Verizon with an explanation, requesting a refund, and I don’t believe I ever heard from them again. Oh well no loss, and way more effort than it was all worth.

zenvelo's avatar

The bank’s business practice does not impose any ethical burden on you as a customer. Whatever is most convenient for you is the most ethical.

Remember, balancing their books by auto generation of a check probably cuts down on days of very expensive auditing time.

LadyMarissa's avatar

The ethics is that it’s YOUR money & they felt that you deserved it. They wouldn’t have cut the check IF they were going to lose money by doing so. Save the check & deposit it when you’re depositing another check, so you lessen the impact on the expense to the bank.

The county I live in had screwed the pooch many years ago & somebody took it to court where the county was found guilty of cheating the taxpayer & were sentenced to refund the amount they had overcharged. They kept making this big deal about our refund was coming & we just needed tyo keep our eyes out for our mail. When I received my check to cover their error, it was for 2 cents. To this day, I don’t understand WHY they didn’t just issue a 2 cent refund on my next tax payment instead of issuing checks. I didn’t rush out to the bank on receipt but did wait until the next time I had a legit check & needed to do business at my bank to include the 2 cent check with my necessary business. My thinking was that the county had already absorbed the expense of issuing the check & it wouldn’t cost my bank much more to process 2 checks in place of one. Afterall, the powers that be had ruled that it was my money. IF you don’t process the check, it will cost them almost as much to keep the outstanding check on the books for an eternity!!! IF you look close, I bet there is some fine print on the face of the check stating that you have to cash before a specified date or the check is nul & void thereafter.

flutherother's avatar

It is errors like this that will bring about the end of civilisation. My advice is to flee the country or enter monastic orders.

Darth_Algar's avatar

This is hardly a question of ethics. The bank is doing what it’s in business to do. The only question is whether or not the ten cents is worth your time and trouble. But only you can decide that.

JLeslie's avatar

Get your 10¢. You’re just one of many checks. Some are 10¢ and some are $1,000 or more. It all evens out. Actually, with the ridiculous fees banks charge for some things they are way ahead.

Just to continue with your logic though, or I should say jack if logic in the bank’s part—the I company I work for banks with Bank of America, and if we pay a subcontractor with billpay, which means a check gets sent through the mail, there is zero fee to cut the check. If we transfer the money to their bank account it costs $1. It used to be $3. So, they print a check, use an envelope, pay postage, and it’s free for us. It makes no sense to me, and it’s frustrating, because we, s d our subs, would prefer the money simply go directly into a bank account. If they have Bank of America also the the transfer is free. If it’s a transfer out of the US it’s fortune! We use an online transfer service for that.

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