Zebulon said

mrcvs said

What’s wrong with a personal check instead, between two trustworthy individuals?  I despise money orders because of fees involved, plus, if you decide to cash one at the post office, you need enough cash in the drawer to cover it, based on previous cash sales that day.  Pointless to show up at 9 am to cash a money order.

  

The fly in the ointment is “trustworthy.”   The joke is that lawyers have the imagination of a child in the dark but experience is a great teacher and any of them in practice for just a few years have seen with their own eyes the full range of weaknesses against which mortal men must struggle.  Some struggle harder than others. 

Personal checks for large sums of money have become a VERY BAD IDEA because of well-meaning but dangerous bank privacy laws and banking practices.

1. You cannot ask the drawee bank to tell you whether the check you’ve deposited several business days ago has cleared the drawer’s account. They cannot disclose it and won’t.

2. If you take the check directly to the drawee bank and ask them to cash it, they won’t unless you are also an account holder there. If you are and they cash it and the check is fraudulent, they will immediately charge back to your account, offset your balance and if that’s not enough, demand payment for the difference, for which you are liable because you endorsed it. 

3. The credit you get when you deposit somebody’s personal check into your own bank account is a PROVISIONAL credit.  Ordinarily, the Fed clears or returns these checks between banks rapidly. If there are sufficient funds in the drawer’s account, the drawee bank debits the check and that’s that. The depository bank (yours) doesn’t know or learn the check was successfully debited. It assumes that is so merely because time has passed and, if it originally had put a hold on some or all of those provisional funds in your account, releases the hold. BUT IS NOT THE WHOLE BALLGAME. 

4. If the check you took in payment for your pair of matched Purdeys was FORGED — written and signed by someone falsely representing himself as the owner or someone authorized to sign [“genuine or authorized signature” is a phrase] for the owner, that fact may not come to light for weeks. 

5. By the time the account owner examines his account statement and sees the big debit for he knows not what, gets a look at the canceled check image and screams bloody murder to his banker, the fraudster and your Purdeys are long gone. The drawee bank charges back the fraudulent item to YOUR bank, which repays the drawee bank and slurps that amount from your account — or calls you in for a chat if your account balance couldn’t cover the whole backcharge. 

6. The same thing can happen if the check is genuine but NSF. It just happens on a tighter schedule.  

7. But, you say, I KNOW MY BUYER. He is solid and trustworthy. 

• • Maybe he is but his Significant Other has just, unbeknownst to him, cleaned his account out and run away with her riding instructor? 

• • Maybe he’s not as “solid” as you think and IRS has just served a seizure notice on his account over some unpaid employee payroll taxes and penalties?

• • Maybe a group of his creditors has just filed a petition in involuntary bankruptcy and served the bank with some sort of injunctive relief? 

• • Or fifty other things he had no idea were going to happen to him.

To sum up: when you hand over a valuable, highly movable object to a buyer (or his evil clone) and take an ordinary bank check in payment, you have, for a sometimes unknowable time period, married the check’s  account owner — his problems are your problems – to the extent of the money represented by the check. 

My personal motto is:

IN GOD WE TRUST. EVERYBODY ELSE PAYS IN MACHINE TESTED CASH OR A POSTAL MONEY ORDER. Postal money orders can be forged but it is very difficult. Deposit them in your bank for immediate credit; don’t look to the P.O.for cash. 

  

Excellent response!

It’s unfortunate it’s come down to that and a check isn’t the equivalent of cash.

Zebulon, are you a retired lawyer?

We are entitled to an opinion, but you think there would be stiff fines for writing a bad check so they can be treated as cash for anything in any given amount.

I can see that we are talking about two completely different things,  obviously based on completely different habits of dealing. 

In one instance, the collector is accustomed to dealing with auction houses, fellow collectors, and dealers of acquaintance, likely of long standing.

Amazingly that is a very small world with a fairly fast set of jungle drums. And WACA membership offers a certain informal discipline. 

My modest and somewhat misbegotten collection was not assembled and upgraded/modified in that way, having bought and sold to and from people I did not know and, if through Gunbroker, never laid eyes on. 

Both points of view are justified but based on completely different considerations. 

For example, if I met Lou or Mike or other friends at a show, I would buy or sell without a care and even a promise to pay later would be fine. I’ve done that more than once. In fact.  

The possible exception to that would be my offering to buy a friend’s entire Model 70 collection, worth more than my house. Even Lou, as gracious and considerate a man as I’ve met, might get queasy at my backing a truck up and hauling it all away on the strength of my personal check, at least without allowing a few days to pass first. Maybe not but most would.

My point is, the danger of the risk is measured not only on the trustworthiness of the buyer but also on the magnitude of the potential loss. 

While I would trust a personal check in exchange for my favorite mule, I might out of understandable caution be reluctant to see my entire horse farm go down the road with only an untested negotiable instrument in hand. 

And the matched Purdeys hypothetical was not really hypothetical. 

I USED to carry large amounts of cash.  Enough it made me more than a bit nervous or paranoid.  Now I carry my check book and a small amount of cash.  I haven’t had issues that way either buying or the few times I’ve sold.  Many years ago now, I slowly cashed checks at my bank to obtain enough cash for a major purchase while not drawing attention by the mandatory submission of reports by my banks as to the cashing of checks for cash.  So…I pickup my rifle only to have the man say he would have preferred my check as he, too, was nervous over having so much cash on hand!  Many of my purchases are now prearranged and thus concluded between trusted individuals.  I do have to add this story for your consideration.  Many years back, I attended the show in the Swietzer Gym (probably misspelled) in Cody.  Dave Bichrest had two models 1873 and I wished to buy both.  He did not know me at the time but took my check gladly when he saw my military ID (I was active duty at the time).  I always greatly appreciated that and Dave and I got to know each other way better once I retired and started attending the shows in Cody.  Lessens here.  1) cash checks for cash at your home bank in amounts less than $8,000 or so and don’t do them very close together.  2) Preferably know your buyer or seller and don’t be too afraid of personal checks.  3) there are no guarantees in this world!  Tim

Y’all are making me nervous. I’m sending a magazine copy to the gracious lady who furnished the rifle and provenance for a recent article via Priority Mail today. It would probably get there just fine in a plain manila envelope but quite honestly the flat rate is a pretty good deal.

On the funds transfer issue I’ve gotten pretty comfortable with wire transfers over the last several years. Some banks and other folks I had to deal with seem to prefer it and quite honestly I sometimes didn’t have time to wait for funds to clear the normal paper check process. I generally use cash for gun purchases but since bills larger than $100 are seldom circulated that can amount to quite a thick wad sometimes, especially when a buyer brings in a fistful of 20’s from the ATM. 

Mike

I believe the refusal to print more super-sized Treasury notes is based on a fear of facilitating large, illicit transactions, specifically high level drug or military weapons purchases. 

I don’t mean “assault rifles”; i mean Hellfire and Stinger missile systems, repair parts for tired Iranian F-4 Phantom II fighters,  surplus Soviet detonators for Hamas, and so forth. American Dollars are still regarded as hard currency on the International black market, whatever you’ve heard to the contrary from Chicken Little and the Gold Bugs. 

The big bills are not useful for most legitimate commercial transactions — gun shows perhaps excepted —  but, conversely, if you need to get a half-billion USD out of the country without getting famous, fewer, flatter, and less obtrusive is always better.  

mrcvs said

Zebulon said

I believe the refusal to print more super-sized Treasury notes is based on a fear of facilitating large, illicit transactions, specifically high level drug or military weapons purchases. 

I don’t mean “assault rifles”; i mean Hellfire and Stinger missile systems, repair parts for tired Iranian F-4 Phantom II fighters,  surplus Soviet detonators for Hamas, and so forth. American Dollars are still regarded as hard currency on the International black market, whatever you’ve heard to the contrary from Chicken Little and the Gold Bugs. 

The big bills are not useful for most legitimate commercial transactions — gun shows perhaps excepted —  but, conversely, if you need to get a half-billion USD out of the country without getting famous, fewer, flatter, and less obtrusive is always better.    

I’ve heard the resistance to larger bills is what you say—specifically drug related, but briefcases full of $100 bills don’t stop the powers that be so how about making it easier for the rest of us.

Plus, I found a $10 bill once.  And that was a thrill!  Imagine how exciting that would have been if it was a $10,000 bill.

  

No Country for Old Men — I like to think I’d have checked for locator bugs before taking the briefcase home.  The MP-5 would have been hard to turn down, though. 

A true Canadian sign-off, eh ?  

I have probably been in my life closely acquainted with more truly awful, immoral, bottom-feeding, predatory, and occasionally murderous human beings than most of you.

However, I have also  known many more good, decent, compassionate, empathic humans who have done bad, ruinously hurtful things — against all their raising. 

Likewise, there have been people i despised who, against every expectation,  rose up and acted selflessly and to their own detriment, for the sake of someone who owed them nothing. 

After 50 years at the Bar,  I’ve concluded most people are basically honest and conscientious. Some aren’t and it is very difficult to know who they are, unless you have known them well for a very long time.  And they can change. 

Unfortunately,  most honest people have a breaking point that is highly individualized, one that can cause them to act against their own moral code. Envy, lust, greed, depression, anxiety, anger, pride,  jealosy, and fear — to name the common toxins – can and do bring good men to shame themselves.  

There is no mortal man who can discern with certainty what is in the mind and heart of another. We all make our judgements and take the consequences thereof, in commerce as well as in marriage and life in general. 

My advice to myself and others in commercial transactions is, when extending credit don’t risk more than you can afford to lose. Taking a personal check is a form of short term, unsecured credit.  Given that your customers are, like most, honest, you could probably take a ten thousand dollar check from a hundred buyers and — even if three of them cheated you — not suffer a catastrophe. But the single customer who wants to give you a one Million dollar check — well, the pucker factor [an aviation term] should be much higher, at least for some of us and me. 

When that kind of money goes, it’s a long time gone. 

An old saw comes to mind-“be careful what you wish for!”.  The current USPS is neither fish nor fowl.  It is semi privatized if you may, with a charter to make a profit without benefit of Congressional allocated funds, yet the government still meddles in the picture.  The old Post Office, with its allocated funds and direct Congressional involvement didn’t strive to make a profit, rather it strove to provide a needed service.  It did that rather well even if no profit was made.  The USPS has mostly lost the profitable sector to UPS and FedEx, yet is required to serve bulk mailings which are losers.  My opinion only and your mileage may differ.  Tim