Does your utility charge the maximum fee allowed in your state for returned checks? If not, you are missing out on revenue you could (and should) be collecting.

Returned check fees by state

The maximum allowable returned check fee varies from state to state, ranging from $20 to $50. Here is a document outlining returned check fees by state, including references to the statute regulating the fee in each state.

Fee Survey results

Last year, I conducted a Utility Fee Survey that encompassed a number of different fees, including returned check fees.

Eighty-eight utilities responded to the survey and, of those, eighty-six charged a returned check fee. In one of the more surprising results of the survey, of the 86 utilities that charged a returned check fee, 24 charged less than the maximum fee allowed in their state. That amounts to 28% of the responding utilities!

Why not charge the maximum allowed?

Why would your utility charge less than the maximum allowable returned check fee? It takes time and effort on the part of your staff to collect bad checks, so why not recover these costs from the customers who incur them?

If it costs more to collect returned checks than you charge in fees, the rest of your customer base ends up paying those additional costs through your rates.

Is your fee posted conspicuously?

Several states have requirements that a notice advising customers of your returned check fee be posted conspicuously at the point of sale. For walk-in customers, this means posting a sign in your lobby. I also recommend including a statement on your utility bill that defines your returned check fee.

How do your fees compare?

If you’ve ever wondered if you are charging appropriate fees, give me a call to find out how a personalized fee consultation would help you.

As part of the fee consultation, I will review your utility’s current fee schedule and conduct an in-depth phone assessment to learn more about your fees. You will receive a presentation quality document illustrating how your fees compare with other utilities. Also included will be my recommendations for revising any existing fees and suggestions of new fees you should consider charging.