How To Cash A Third-Party Check


Cashing a third-party check is a little trickier than one that has been paid directly to you. With a third-party check, the original recipient signs over the check to a third-party. This leaves the door open to fraudulent schemes and increases the risk for the entity that cashes the check. If you need to cash a check that has been double endorsed, banking institutions will require more information to ensure that they receive funds.

Cashing At A Bank Or Credit Union

The majority of banks will not allow you to cash this type of check unless you have an account with them. It’s best to talk to the institution before you make the trip down to your branch so that you understand the guidelines you must follow. Some banks will not cash this type of check and others will charge you a fee to complete the transaction. Others may require you to bring additional identification such as a picture ID or require that you bring the original payee who is listed on the check so that their identity can be verified as well.

Using A Check Caching Store

If you don’t have an account at a bank or credit union, a check cashing store is your only other option. Similar to banks or credit unions, they all have different requirements and regulations. Check-cashing stores may require you to bring in both parties, bring in additional photo identification and charge a fee for the service. Again, it’s best to contact them before trying to conduct business.

How To Fill Out The Check

If you’ve ever cashed a check that has been written to you, you know that it requires your endorsement on the back. A third-party check will also require you to endorse the back, but it must also be made payable to you. To do this, follow these steps:

– On the back of the check, write “Pay to the order of” on the first line
– On the second line, your name should be written
– The original payee should endorse the check on the third line
– You will sign the check under their endorsement

Be aware that you may have to endorse the check in person. This further verifies that you are the person signing the check.

Avoid Using An ATM

While using an ATM is efficient and quick for most transactions, depositing a third-party check requires you to conduct the transaction with a representative of the bank. Since there are more regulations and requirements that must be verified, the automation of an ATM is insufficient for handling the process. When you need to get money from this type of check, it will require interaction with a live person.

Fraud Makes It Difficult

The reason why banks, credit union and check-cashing stores make it more difficult to cash a third-party check is due to the higher risk of fraud. They are concerned with forgery and can’t risk losing funds. Many law enforcement institutions that are in charge of banking regulations frown on these type of transactions and discourage many banks to even allow the process.

You can see that cashing a third-party check is possible. However, if you can avoid the situation by having a check made out directly to you, it does make the process go smoother.