Retail surgery: What does the end of cheque guarantee cards mean for retailers?

In recent years the number of guaranteed cheques has fallen and, although many businesses no longer make use of this facility, those which do should be aware it is to be withdrawn from June 30, 2011.

The Payments Council decided to withdraw the cheque guarantee scheme in the light of the rapid decline in its use - in 2009 guaranteed cheques made up only 7% of all cheques written - and after wide consultation with business and consumer representatives.

After June 30 you can still accept cheques - just not guaranteed with a card. In fact, recent industry-wide changes mean that cheque funds are guaranteed after a set time scale - a certainty that wasn’t available when the Cheque Guarantee Card Scheme was first introduced, back in 1969.

Jacqui Tribe, manager of the Payments Council’s UK Domestic Cheque Guarantee Card Scheme, says: “This means that, provided you wait until the end of the sixth working day after paying in a cheque, you can be sure that the cheque won’t bounce and the funds will only ever be reclaimed if you are a knowing party to a fraud.” This is one of a number of changes to cheque-clearing time scales. To find out more, visit the website Chequechecker.co.uk.

The council is separately reviewing the long-term future of the use of cheques in the UK.

Further information about the withdrawal of the cheque guarantee scheme and alterative payment systems can be found at Paymentscouncil.org.uk.