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Checks are not guaranteed to be cashed, as the payer's account may not have enough money at the time of cashing, and the payer may not know when the payee is going to cash the check. When that happen, payer and/or payee may have to pay bouncing fee or overdraft fee.

So I wonder when checks are preferred over cash, and when cash is preferred over checks, as two payment methods?

  • In terms of receiving payments?
  • In terms of giving payments?
  • Verifying a transaction is completed?
  • Record keeping?
  • Fraud?
  • Other sorts of legal standing?
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-1 Cash is not guaranteed to be cash either, since the payer may be knowingly or unknowingly giving forged bank notes to the payee or passing on money stolen in a bank robbery or received as a ransom payment etc. The payee has no way of knowing whether the cash tendered is valid or not, and is at risk of being charged with passing forged or stolen money when he uses the cash received. What's your point? – Dilip Sarwate Jul 16 '12 at 14:56
@DilipSarwate: Will I be charged for unknowingly using forged or stolen money? Why? – Tim Jul 16 '12 at 15:27
You will be investigated for, and possibly charged with, passing forged or stolen money. Your defense will have to be that you did not know, and could not possibly have known or had reason to suspect, that the money was forged or stolen, and the burden of proof will be on you. Recipients of large sums of cash in a face-to-face transaction should also consider the possibility of being robbed by the payer immediately after the cash is delivered, or by someone else on the way to a safe place. You do want to lead an interesting life, don't you? – Dilip Sarwate Jul 16 '12 at 16:13

1 Answer

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It is risky to mail cash. If the letter gets lost, the money is gone. You also have no proof they received it. There are ways to overcome these shortfalls using registered mail and return receipt mail, but these cost money and time.

Sending a bad check is a crime. That keeps almost everybody honest.

If you write a check only when you have the money in the account, and you keep track of your balance, you never have to worry about when the other person will cash the check. The money will always be there.

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Thanks! How serious is the crime, besides some penalty fee? – Tim Jul 16 '12 at 12:29
Jail time is not impossible. Google your jurisdictions criminal code for maximums. – mhoran_psprep Jul 16 '12 at 12:31

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