What is an NSF check and what do you do when a customer's check bounces?

An NSF check is particularly damaging because it creates a false sense that the invoice was paid, then reverses that payment days later when the bounce is discovered. In the interim, your accounting may have closed the receivable, reducing the urgency of follow-up. By the time the bounce is confirmed, the customer may have received additional goods or services on the assumption that the previous balance was settled.

When a check bounces, the correct immediate response is: (1) contact the customer by phone, not email, that same day; (2) request an alternative payment method (ACH, wire, or credit card); (3) charge the NSF fee if your contract or invoice terms specify one (typically $25–$35, which mirrors your bank's fee plus administration). Do not redeposit the original check without explicit confirmation from the customer that funds are now available — a second bounce costs another fee.

Repeated NSF checks from the same customer are a creditworthiness red flag. After two bounced checks, it is reasonable to require payment by wire transfer or credit card going forward, and to stop accepting checks from that account entirely.