DEFINITION of 'Rubber Check'

Another name for a "bounced check." A rubber check is a slang term used for a written check that does not have the funds available to be deemed good. A rubber check cannot be processed because the writer either (a) has insufficient funds in the account, which the check is drawn, or (b) has placed a stop payment or cancellation on the check, making it impossible for the check holder to cash the check.

BREAKING DOWN 'Rubber Check'

In either case (insufficient funds or stop payment) the check writer knowingly issues the check with the intent to not make good on the payment. While the practice is not illegal, it is a sign of poor business character in most cases. Additionally, most rubber (or bounced) checks are subject to high bank penalty fees, typically ranging from $20 to $40 per bounced check.

RELATED TERMS
  1. Bad Check

    A check drawn on a nonexistent account or on an account with ...
  2. Bank of First Deposit - BOFD

    The bank where a check is initially deposited to an account. ...
  3. Postdated

    Any check or draft that has a future date written upon it by ...
  4. Check Representment

    A system wherein a check that bounced or did not clear when it ...
  5. Check Hold

    Denotes a period of time equal to the maximum number of days ...
  6. Electronic Check

    A form of payment made via the internet that is designed to perform ...
Related Articles
  1. Personal Finance

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.
  2. Personal Finance

    Top 5 Reasons Banks Won't Cash Your Check

    Learn the top reasons that a bank won't cash your check, and find out what steps you can take to prevent those scenarios from happening.
  3. Investing

    What is a Cashier’s Check?

    A cashier’s check is a check written on a financial institution’s funds.
  4. Small Business

    How To Do a Background Check on Prospective Employees

    Discover why background checks can be extremely costly, tips for small businesses conducting checks on a budget and if professional checks can be avoided.
  5. Managing Wealth

    2015's Top Checking Account Promotions

    Open a checking account in 2015 and the bank could give you a cash bonus. Check out these top offers.
  6. Investing

    Check Point Is In Its Competitors' Crosshairs, But May Be Too Cheap

    Check Point has ample competition and a philosophy that seems more oriented towards maintaining profits than growing them.
  7. Investing

    The Best Small Business Checking Accounts in 2016

    Accounts with big banks offer frills, such as mobile and text-based banking – but for small businesses, local banks and credit unions can save money.
RELATED FAQS
  1. When do checks expire?

    There is a legal grace period for cashing checks, but depositors and issuers may risk overdraft fees if a late check is presented ... Read Answer >>
  2. How do you calculate payback period using Excel?

    Understand the various fees that can be assessed on a personal or business checking account, and learn methods to avoid being ... Read Answer >>
  3. How does bouncing a check affect my credit score?

    Learn the many indirect effects on your credit score when you bounce a check. Read Answer >>
  4. How do government-issued stimulus checks affect the economy?

    Stimulus checks are payments given to individuals by the government based on taxes paid in the previous year. The hope is ... Read Answer >>
  5. Are checks escheatable?

    Learn that unpresented checks become unclaimed and escheatable by the state, when the state obtains and holds the title to ... Read Answer >>
Trading Center