Check Cashing Businesses are primarily franchises that offer location opportunities if there isn't already a business in the area. There is competition for locations, and by franchising you will be ensured that no one else can open a location from the same company once you sign your contract.
History
Cashing checks in today's world is becoming more and more difficult. With check fraud cutting into the bottom line in many businesses, there is a real reluctance to accept checks at face value. Although there are still many places you can cash checks, banks want to deal with people that have bank accounts; retail businesses want two pieces of identification; and many stores/businesses have policies where they will no longer accept any personal checks.
Significance
Where there is a need, an opportunity for a business usually will develop. In this case, it's the difficulty for many people to cash checks or receive an advance on their paycheck, i.e. "pay day loan." For these patrons, the business of check cashing was opened.
Benefits
A check cashing business is one that is specially in the business of accepting and cashing checks. Most check cashing businesses will accept payroll, personal, cashiers, government and company checks. In return for taking the risk in cashing these checks, the business or franchise will charge hefty fees or percentage points for each transaction. These fees are well above what local banks charge due to the high risk factor that is involved with each transaction.
Time Frame
Banks will not accept post-dated checks, but a check cashing business will accept a post dated check. The business will pay out the money, less their fee, and then hold the check until the date the check was dated.
Considerations
With a Check Cashing Business there are some drawbacks:
*Some businesses offer the ability for them to hold onto your post-dated check, and you can come in before the set date and pay off the loan.
*Some businesses will offer the ability for them to hold onto your post-dated check and then will try to withdraw it from your account ahead of your set date. Patrons of check cashing businesses must get, in writing, that they will hold on to the check until the set date to protect the patrons from this happening. Otherwise you will might have not only the check cashing fee but also the insufficient-funds charge from your bank.
*Patrons who cash a check that turns out to be insufficient funds can be legally prosecuted for "theft by check" which carries large fines in every state.
*Many states are making it mandatory for there to be a "cooling off period" so that after a patron cashes his check with a check cashing business, he have a set period of time to reconsider the transaction and rescind it without any fees being owed. The full amount of the check, and fee, will be exchanged back between the patron and the business.
