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Why do we still see (edit: in the US) some people (especially the elderly) still pay with checks in stores, even when the amount isn't too large for a debit card?

Here are the disadvantages I can think of, compared to (say) debit cards:

  • Checkbooks are heavier than debit cards

  • You can run out of checks

  • They take much longer to write

  • They hold up the entire line far longer than normal

  • It's much easier to make a mistake on them and waste more time fixing it

  • You leak your account number

  • You leak your signature

  • You leak your name, address, and whatever else is on your check

  • It's much easier to press a couple keys than write down one hundred thirty-five dollars and thirty-six cents.

Here are the advantages I can think of:

  • (Nothing)

I assume the only reason stores still accept them is that people still use them, but for the life of me I can't figure that part out. Why does anyone still write checks in stores for amounts that are clearly small enough that you could use a debit card? What is the benefit?

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    Points 2 and 3 are basically the same thing. I'd also suggest combining 6, 7 and 8 into You can leak personal info (Account #, Signature, address, etc.) ... Though keep in mind debit/credit also can leak all of this info aside from address. – aslum Jun 1 '18 at 16:56
  • Comments are not for extended discussion; this conversation has been moved to chat. – GS - Apologise to Monica♦ Jun 2 '18 at 22:30
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I write very few checks, but putting myself in the place of people that do, I can think of several advantages. Now, not all of these might seem like advantages to you or me, but they only need to be seen as advantages to the people using the checks.

  1. Checks are physical pieces of paper. Some people don't like or understand electronic payments. A written check is a document that you hand to the store. Your duplicate check or check register is a physical record of your payment, and your returned check is evidence that the payment was completed.

  2. Checks have lower expenses to the merchant than credit or debit cards. If I am shopping at a mom-and-pop store that a friend owns, writing a check will cost me the same as using a credit or debit card, but the store owner keeps more and the bank keeps less. (I have written checks before for this exact reason, and continue to write checks for non-profit giving for this reason.)

  3. Checks can be seen as safer than credit or debit cards. You might argue that this isn't true, but in my limited experience, it is: I have had many instances of fraudulent credit and debit card transactions, but have never experienced check fraud.

  4. You don't need to remember a PIN to use a check.

Again, you might have arguments with each of these, and in your mind, they are valid arguments. But I think that the thinking of check writers is along these lines.

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    +1 the third one is very intriguing. Have you normalized for the number of transactions with each method though? And accounted for the fact that (I assume like me) you instinctively only write checks to parties that you have more trust in (at least in their system security, if nothing else)? – user541686 Jun 1 '18 at 4:19
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    Point 2 sounds strange -- it may be true in the US for all I know, but why is it so? It must be a lot more expensive for the banks to process a check (paper to move around and store, manual data entry necessary for the amount and payee, etc) than a (fully electronic) card payment; why isn't that additional cost passed on to merchants? – hmakholm left over Monica Jun 1 '18 at 12:48
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    @Mehrdad One of the things that makes credit card fraud more common than check fraud is that it is electronic. When I use a credit card, there can be fraud even if the merchant is legitimate (criminals obtain info through skimming or hacking). But with a paper check, the only way my info is compromised is if the people handling my check are themselves criminals. (Yes, I know checks are sometimes processed electronically now...) – Ben Miller - Remember Monica Jun 1 '18 at 12:59
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    @Mehrdad Regardless of the normalization by number of transactions, zero instances of check fraud is still zero instances per transaction, whereas the credit fraud instances or rate is a non-zero number. – Nuclear Wang Jun 1 '18 at 18:41
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    @NuclearWang But zero out of 'very few' isn't a large enough sample size to establish an actual rate. Check fraud does occur. – Redja Jun 1 '18 at 19:01
4

Just as the younger generations doesn't automatically receive a box of checks when they open a checking account, the older generations didn't automatically get a debit card. Therefore each generation has a method of paying they are comfortable with.

Though I hardly ever use checks, I also never use the debit card. I do use it as a ATM card, but if I am at a store and I am going to use plastic I am going to put it on a credit card.

Both plastic and paper have risks. Both have time lags between presenting to the cashier and having the money withdrawn. I have seen checks scanned instantly, and I have seen debit cards take days to appear on the bank website.

I have seen slow customers and fast customers at the store, and it doesn't matter which method they use.

Both have methods to prevent overdrafts, but users of either can and do frequently overdraft their accounts.

As to benefits. Comfort is a big part of it. It makes it hard for the one side to understand the benefits that the other method has.

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    I don't buy the "older generations didn't automatically get a debit card". They also didn't in Europe, where I know no one, even above the age of 85, that would still use checks or is not comfortable paying with debit. Just like the proliferation of credit cards, the difference is cultural, no reason to chalk it up to age. – DonFusili Jun 1 '18 at 13:53
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    @DonFusili: Eurocheques were very popular in Germany until 2002, when the Eurocheque guarantee ended and shops stopped accepting them. So people, irrespective of age, were forced to switch to a different payment method. – chirlu Jun 2 '18 at 12:40
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Perhaps they have checkbooks and don't have debit/check cards. Or they don't know how the debit/check card works.

Alternately, perhaps the account is shared, so both spouses can write checks, but only one spouse has a debit/check card.

It's also worth remembering that some stores keep the credit card details. So if they are ever cracked, they leak sufficient information that people can process charges on the internet with even less protections than checks have. Each check requires a signature and if someone tries to use it in Thailand, then it's going to be pretty obvious that it's not the elderly person in Iowa that's using it. By contrast, if someone uses a credit card online to pay a fake business in Iowa, that looks legit until they transfer the money to Nigeria. And that transfer is not visible to the card processor.

Sure, one can avoid that by avoiding the problematic stores. But most elderly (and even many younger people) aren't going to track store credit card policies that closely.

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    I'm stuck on your third paragraph. I thought it was pretty well-known that you're better protected against unauthorized credit cards charges than unauthorized check withdrawals? Are you really challenging that common wisdom or am I misinterpreting this? – user541686 Jun 1 '18 at 4:25
  • I fail to understand why credit card is “unknown” to some people. They have been around since late 1950’s. Should be more than enough time to familiarize yourself with the concept ;-) – ssn Jun 1 '18 at 5:23
  • @ssn: Note that credit cards are slightly easier to explain because not everybody who can get a bank account can get decent credit cards. But if you can already write checks from your account I'm not sue why you wouldn't have a debit card available for it as well. – user541686 Jun 1 '18 at 5:57
  • @Mehrdad: That depends on what you mean by "better protected". Someone might easily acquire my credit card info and could use it on-line. They'd have a harder time stealing my checkbook. – jamesqf Jun 1 '18 at 20:50
  • Indeed. The online world is S-C-A-R-Y for people not well practiced in defending themselves (such as us geeks). By that I mean actually rife with threats, not just idly frightening. – Harper - Reinstate Monica Jun 2 '18 at 0:58
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Why does anyone still write checks in stores for amounts that are clearly small enough that you could use a debit card? What is the benefit?

Again answers depends on geography; Generally ...

  • Habit, difficult to change
  • Comfort. Older people find it more difficult to adapt. They enter the amount etc ... where as on debit card, someone does. They are afraid something may go wrong and more money is lost. They don't understand the dispute mechanism.
  • One can put a hold on check. It give a sense of better control
  • One need not have money in the Bank at the time of writing check. Generally the merchant would take a day or two to deposit and few days to clear.

So mostly it comes to psychological reasons.

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  • @Brythan. Thanks. Darn the spell checker :) These days my spelling is so bad that even spell checker can't fix it. Need AI. – Dheer Jun 1 '18 at 4:00
  • Is the last bullet point true? I can see it being true for mom-and-pop stores, but with bigger retailers didn't they have these machines that scan the checks instantly? Also, I thought it was illegal to write a check that you know would bounce if immediately deposited? (And even if it's not, wouldn't it risk a fee? Do people see it as an advantage despite all that risk?) – user541686 Jun 1 '18 at 4:33
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    @Mehrdad Yes, because in many countries personal checks pretty much no longer exists. E.g in Denmark it is no longer possible for private persons to get a checkbook - and almost no stores/shops will accept them. Even cash is rarely used, especially in the younger generation. None of my peers will ever carry cash (except if it was a gift from their grandparents ;-) ) – ssn Jun 1 '18 at 7:18
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    @ssn: Not only private persons. The banks stopped accepting each other's checks from January 2017, which means there are no domestic checks in Denmark at all anymore. – hmakholm left over Monica Jun 1 '18 at 12:55
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    @ssn Whilst you may be right, I find it ironic that you should post it on the very day that Visa Europe had a massive outage and lots of retailers were cash only. – richardb Jun 2 '18 at 12:30
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One reason that no one has mentioned yet is that if I write a check, I know (from the counterfoil, and the register) just who I wrote that check to, when, and for how much. I also know how much money I have in the account, so I don't accidentally spend more than is there, which I might if I used a debit card. On-line payments from the checking account also go in the register, so (barring math errors) I always have a handy record of the account balance, and who got paid.

That said, I very seldom use actual checks, and never in stores. I either pay cash, or use a credit card - and when I use a card, I may not even bother to note the actual sale amount.

Just for interest, the last actual check I wrote was in August 2017, to a neighbor. That was the only one that year.

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  • +1 I never considered this aspect, thanks for pointing it out. The fact that a check authorizes the amount explicitly whereas a card transaction doesn't provide the client any means to specify the specific amount is something that had never crossed my mind. It seems like a real advantage, at least when you're not dealing with crooks and just trying to prevent clerical errors. – user541686 Jun 2 '18 at 1:39
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    How does using checks help you to "know how much money I have in the account"? Unless you're constantly re-balancing and absolutely no other withdrawals form the account other than the check book? – brhans Jun 4 '18 at 13:09
  • @brhans: Because the checkbook comes with a handy booklet ("check register") in which I write down all the deposits to & withdrawals from the account. So (in my case, at least) I only make withdrawals while at my computer (so I can write them down immediately), or by writing actual checks. – jamesqf Jun 4 '18 at 17:38
  • " I also know how much money I have in the account, so I don't accidentally spend more than is there, which I might if I used a debit card." -- I'm used to cards that take the money out of the exact same account that checks would, and that give an error message if there isn't enough in the account. Are US debit cards not like that? – RemcoGerlich Jan 18 '19 at 9:29
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A lot of independent trade people (electricians, plumbers, handymen) aren't set up to take plastic. In a lot of cases I suspect it is because they either aren't tech savvy or want to encourage cash for whatever reason.

When I am paying them, especially for my rental-property business, I will give them a check because it is easier than cash and gives me a paper trail that I paid them.

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    This answers the question of why independent trade people don't take plastic, but I was asking about stores. – user541686 Jun 2 '18 at 1:36

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