Fed. Says Return Check Fees Are Up
We are all aware by now that the trend over the last two years has been for banks to continue to increase the fees charged to both consumers and retail depositors for bank return charges, called DIR's (Deposit Item Return-Fees).
With a new November 1995 report, the banking industry had hoped for a fresh round of ammunition in its war of words over the pricing of check services. A new report out of the Federal Reserve Board shows that the fees charged by banks for checking services has remained relatively unchanged since 1993, with one notable exception.
According to the Fed's
Annual Report to Congress on Retail Fees and Services of Depository Institutions, the only significant change in pricing to occur since 1993 is an increase in the number of institutions that assess fees for checks that are deposited and subsequently returned by the paying bank. In other words, the Fed has now acknowledged what the retail world has been paying for nearly two years, growing return charges.
To our knowledge, CrossCheck Inc., in Rohnert Park California, remains the only Check Guarantee company to reimburse retailers for these return check fees.
The fact of the matter is that retailers with a $25.00 average check and a $20.00 return check charge, are actually only being reimbursed 56% of their losses by Check Guarantee firms, if they are not reimbursed for the return check fees.
Finally, many retailers may not actually realize how much they are paying, because their bank may include the return item fees in the month end bank analysis charges, and bury this cost in offsets and compensating balances. If you are to win this point of discussion you must make the retailer aware that these charges are "real" costs that drive down their earnings potential on available funds, or could create offsets for other services, for which they may be paying.
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