DEFINITION of 'Check Representment'
A system wherein a check that bounced or did not clear when it was first presented because the account on which it was written had insufficient funds, is re-presented when sufficient funds are available in the account. In the check representment process, the bounced or returned check is usually converted into an electronic item for representment. Many banks and financial institutions offer check representment services to their business clients at no charge.
BREAKING DOWN 'Check Representment'
The benefits of check representment services are manifold. It gives businesses another opportunity to collect payment for products supplied or services rendered, thus reducing the time and expense of going through the collections process or managing bad debts.
Also, the electronic nature of check representment means that repeat offenders with regard to multiple NSF checks can be flagged. This would give businesses advance notice of potential non-payment, and they can therefore insist on 100% advance payment from such clients.
As well, electronic items have an advantage in that they are re-presented more quickly and also receive priority over paper checks. Electronic items also have lower handling costs and much shorter processing times than paper checks.