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My wife endorsed a small check "For Deposit Only". Then, she crossed the endorsement out, and initialed it. The grocery store refused the check, saying once it's endorsed for deposit only, the bank won't accept it even though For Deposit Only is canceled. Is this right?

  • I have no official knowledge with which to answer this question, so take my answer at face value. – Stainsor May 11 '11 at 13:22
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If crossing out an endorsement of "For Deposit Only" were valid, then there would be no point in writing "For Deposit Only" on a check. The direction only works because there is no way to 'undo' the change.

You are essentially saying, I don't care what happens, this check can ONLY be deposited and not cashed. This is to protect you in case the check gets lost or stolen. If initials validated changing this directive, the protection the endorsement gives would no longer work.

The store made the correct choice.

  • I wrote FDO on a check I intended to deposit, but later changed my mind and took it to my bank to cash. The teller had me cross it out an initial it and let me cash it. Of course the difference is i was at a bank. – Andy May 19 '16 at 22:59
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Personally, I would want the grocery store to respond that way.

The practice of writing "For Deposit Only" is a means to prevent someone from cashing your check subsequent to you signing the check. The implication being that it would be an unauthorized individual. Initials are much easier to fake/forge than a signature. So crossing out the phrase "For Deposit Only" and initialing is a means of subverting the intent of the intended payee. In other words, someone could pick up your check off the street and use this method to cash it.

With that said, one would think the grocery store would be more willing to cash it if your wife presented ID. Nevertheless I would say once the phrase is written it might as well be written in stone.

Does anyone know some sort of statute regarding this?

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The fact - check signing is often overlooked at banks. My local bank asks me for ID when I cash a check. They cash my check for my wife with no ID. (Maybe I look untrustworthy?) Stories of people signing their check "mickey mouse" and having it go through are common.

But - this isn't really about banks or rules. The grocer accepts 3rd party checks at their discretion. They don't have to accept checks at all. So it's up to the store how they'd handle a situation as you described. They did nothing wrong, except perhaps annoy a good customer.

To avoid confusion in the future, write checks payable directly to the store and all will be well.

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See the related discussion on the question How to correct a mistake made when writing a check?

Its advisable that you will have to write a new check.

  • Except that this isn't a mistake in writing the check -- this is a change of mind on the endorsement. – bstpierre May 11 '11 at 20:51
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According to the National Check Fraud Center:

Section 3-206: If the back of the check says it is For deposit only, then has the signature of the payee, that is a restrictive indorsement and it should be observed, but the person who affixed that indorsement can waive it. If Webster takes a check payable to him and indorses it "For deposit only, Webster", when he comes to the bank he can change his mind and get cash instead. On the other hand, if Webster indorses the check "For deposit only, Webster" and gives it to Ryan to take to the bank, Ryan does not have the authority to waive the indorsement.

Source of quote

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