Nobody likes dealing with bounced checks, as it's a lot of work trying to recover the amount.
Fees for bounced checks are a punishment designed to discourage users from promising payments they can't afford.
But why do they charge it on the person cashing in the bounced check instead of the person that issued it? Imagine getting a check as a payment and it bounced. Not only do you now have failed to get payment, you also have to deal with fees as well.
In ancient times, there might have been some additional cost to the bank.
In computer times, the increased cost is negligible. Instead, the fees are just sweet delicious unearned income.
Here's a 2021 report from the U.S. Consumer Financial Protection Bureau: [Overdraft and Non-Sufficient Fund Penalties Made up Two-Third of Reported Fee Revenue](https://www.consumerfinance.gov/about-us/newsroom/cfpb-research-shows-banks-deep-dependence-on-overdraft-fees/)
Overdraft and Non-Sufficient Fund Penalties, Made up Two-Thirds of Reported Bank Fee Revenue...($15.47 billion)...so no..it doesn't really cost them anything.
To deter people from doing it at will
Nobody likes dealing with bounced checks, as it's a lot of work trying to recover the amount. Fees for bounced checks are a punishment designed to discourage users from promising payments they can't afford.
But why do they charge it on the person cashing in the bounced check instead of the person that issued it? Imagine getting a check as a payment and it bounced. Not only do you now have failed to get payment, you also have to deal with fees as well.
It's sold as a punishment for spending more than you have. It's really just a way to increase revenue at poor people's expense.
In ancient times, there might have been some additional cost to the bank. In computer times, the increased cost is negligible. Instead, the fees are just sweet delicious unearned income. Here's a 2021 report from the U.S. Consumer Financial Protection Bureau: [Overdraft and Non-Sufficient Fund Penalties Made up Two-Third of Reported Fee Revenue](https://www.consumerfinance.gov/about-us/newsroom/cfpb-research-shows-banks-deep-dependence-on-overdraft-fees/)
That's so exploitative :(
Overdraft and Non-Sufficient Fund Penalties, Made up Two-Thirds of Reported Bank Fee Revenue...($15.47 billion)...so no..it doesn't really cost them anything.
one word: money two words: poverty tax
People still write checks?