No, Walmart does not cash third party checks at any of its stores in 2022. The increased risks of fraud and inability to verify the legitimacy of third party checks means Walmart policy prohibits cashing them to protect the company from liability.
I know the inability to get a third party check cashed at Walmart can be an inconvenience. As an ecommerce business owner myself, I understand the need to sometimes cash checks from new clients or customers you may not have a relationship with yet.
Not being able to use Walmart to convert those checks into usable funds right away can disrupt your cash flow. That‘s why in this guide I‘ll share expert insights on third party check cashing, including:
- Understanding risks retailers face with third party checks
- Where you can get third party checks cashed in 2022
- Step-by-step process for cashing third party checks
- Fees to expect for third party check cashing services
- Tips for minimizing fees and speeding up verification
My goal is to save you time and money by sharing the knowledge I‘ve gained from over 10 years in ecommerce and Amazon FBA. Cash flow optimization is key for any growing business, so let‘s explore your best options for turning third party checks into usable funds quickly and affordably.
Why Retailers Like Walmart Don‘t Accept Third Party Checks
To understand why major retailers like Walmart refuse third party check cashing, it helps to first define what makes a check "third party."
- A third party check is signed over by the original recipient to another person or company.
- The new recipient deposits or cashes the check, even though their name wasn‘t originally on it.
For example, if Company A issues a check paying Company B for services, and Company B signs that check over to Company C, it would be considered a third party check for Company C.
This chain of custody where the check is passed from one party to the next increases risks, including:
- Fraud – Checks can more easily be forged or scammed when they change hands multiple times.
- Verification challenges – Retailers have no way to verify if the original payee legitimately endorsed the check to the third party depositor.
- No customer relationship – With third party checks, the retailer has no prior history or relationship with the check depositor.
- Inability to recover funds – If the check bounces, the retailer has little recourse for recovering lost funds from an unknown check depositor.
Data from the Federal Reserve shows that $15 billion in third party check fraud occurs annually. Retailers bear the brunt of these losses.
Without customer relationships or ways to properly verify third party checks, major chains like Walmart have deemed the risks and liabilities too high to accept them.
Where You Can Get Third Party Business Checks Cashed
While big box retailers won‘t cash third party checks, you still have several options:
Banks and Credit Unions
Most banks and credit unions will cash third party checks, but usually only for account holders. Establishing even a basic business checking account can provide access to third party check cashing. Expect to show ID and pay a fee of around 1-5% of the check‘s value.
I recommend starting with the bank the check is drawn on, as they will have the easiest time verifying available funds.
Dedicated Check Cashing Stores
Check cashing stores like ACE Cash Express specialize in cashing checks for non-account holders. They‘ll cash personal, business, and third party checks, but charge the highest fees, often 10% or more of a check‘s face value.
I view check cashing stores as more of an emergency option due to their fees. But in a pinch they will cash a third party check with proper ID.
Money Transfer Outlets
Services like Western Union and MoneyGram can be another choice for cashing third party checks. Fees are usually comparable to check cashing stores, around 8-12% of the check value. But their thousands of retail locations offer convenience and instant cash pickup.
Supermarkets and Pharmacies
Many supermarkets and pharmacy chains will cash checks for account holders as an ancillary service. For example, Kroger has been known to cash third party checks for less than $200 for a $3 fee. But policies can vary greatly by location.
Cashing Limits and Restrictions
Here are some additional factors to be aware of when picking a third party check cashing provider:
- Daily cash out limits, often $500-$1000 max
- Higher fees for non-account holders
- Delays of 5-10 days for funds availability without an account
- ID and fingerprint verification requirements
Building relationships with multiple providers gives flexibility in case one location has reached its cash out limit or encounters verification delays.
Step-by-Step Process for Cashing Third Party Business Checks
Cashing a third party check requires some extra preparation and documentation compared to depositing a check made out to your business directly. Here is an overview of what to expect:
1. Get the check properly endorsed.
The original payee must sign the check over to your business by writing "Pay to the order of Your Business Name" and signing their name. Make sure the endorsement is legible.
2. Gather identification.
You‘ll need valid government-issued IDs for both the original payee and the check recipient (your business). Copies of business licenses or utility bills may also be required for verification.
3. Present in person together.
To cash the check, the original payee and you as the recipient should be present together at the bank or check cashing location. This allows identities and endorsements to be verified.
4. Pay any check cashing fees.
A flat fee usually ranging from $3-$20, or a percentage fee of 1-5% of the check value, is standard. Non-account holders tend to pay higher fees.
5. Get documentation.
Keep records like receipts for the fees paid, funds received, and the check cashed for accounting purposes. You may need this documentation if any issues arise.
6. Deposit the cash safely.
I recommend going directly to your business bank after cashing a third party check to securely deposit the cash received. Never hold large cash amounts unnecessarily.
Following this process closely allows you to cash third party checks securely. But fees and time spent can add up. Below I share tips for minimizing the hassle.
Minimizing Fees and Speeding Up Verification
As an ecommerce business owner, I know that every dollar counts when managing cash flow. Here are 5 tips to reduce fees and speed up the third party check cashing process based on my experience:
1. Establish accounts with your top 2-3 check sources.
If certain customers or clients send you third party checks regularly, getting accounts at their banks allows you to cash their checks with minimal fees as an account holder.
2. Negotiate bulk check discounts.
If one client writes you a large volume of checks monthly, ask their bank about discounts for cashing multiple checks together. This saves on a per check basis.
3. Deposit funds electronically when possible.
Some banks allow account holders to deposit endorsed third party checks instantly via mobile app. This is cheaper than over-the-counter cashing.
4. Get to know check cashing staff.
Building relationships with staff at your preferred check cashing locations can help speed up verification and approvals.
5. Only cash what you urgently need.
If cash flow allows, cash only what you need for immediate expenses. Deposit the rest into your account to avoid excessive check cashing fees.
Evaluating where most of your third party checks originate from and establishing accounts at those banks provides the most affordable cashing solution.
Make Sure Check Funds Clear Before Disbursing Cash
One final word of caution when cashing third party checks – always verify the funds fully clear before disbursing the cash received.
Even if you followed the proper third party check cashing steps, there is still a small chance of the check bouncing or being fraudulent despite the retailer‘s verification.
I recommend waiting 5-7 business days after depositing a cashed third party check to ensure it clears and you safely have access to the funds. Only then should you invest the cash into business operations, inventory, or other expenses.
Cashing Third Party Checks With Minimal Hassle
I hope this guide has shared helpful insights into efficiently cashing third party checks and putting those funds to use in your business. As an ecommerce seller and Amazon FBA expert myself, I understand the importance of optimizing cash flow.
Just remember that while big retailers like Walmart no longer accept third party checks, by establishing bank accounts and leveraging check cashing stores you can still smoothly convert checks from new clients into usable cash for your business.
Feel free to reach out if you have any other questions! I‘m always happy to share best practices on accounting, fraud prevention, cash flow management, and other topics we business owners face.