Personal Finance
Giant cardboard checks
March 22, 2001: 7:30 a.m. ET

A check on anything other than paper is still a check - if it has the right info
By Holden Lewis
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NEW YORK (Bankrate) - What if you won the lottery and you got one of those giant cardboard checks -- could you deposit it at the bank?

Yes, if the proper information were written on it.

In fact, a check doesn't necessarily have to be written on paper. There are legends, probably apocryphal, of checks written on the backs of shirts (by tax protesters) and on watermelon rinds (by goodness knows whom -- maybe madcap farmers), even on skin. If they were written in the right format, they could be cashed.

  It can be written on anything. As long as it has the elements, the surface doesn't make a difference. A check is an order to pay someone, that's all it is.  
  Brian Black  
"It has to contain certain features, and it can be written on anything," says Brian Black, managing director of operations and technology for the Bank Administration Institute. "As long as it has the elements, the surface doesn't make a difference. A check is an order to pay someone, that's all it is."

So let's say some smartypants decides to protest his tax bill by writing a check on "the shirt off his back" and mailing it to the IRS. As long as it has the account owner's name, the date, the words "Pay to the order of" followed by the payee's name, the dollar amount in numerical and in written form, the name of the bank where the account is held (along with the bank's city and state) and the signature of the account owner, it's valid.

Just because something is possible doesn't mean it's advisable. Only a moron would antagonize the IRS by writing a check on the back of a shirt: might as well request an annual audit for life. Still, the question makes the IRS nervous. When I asked an IRS spokesman whether anyone had ever sent a check written on the back of a shirt, he said he would find out. Then he called back immediately and asked if that was all this story would be about.

No. It's also about magnetic ink, a check-printing goof that almost landed an innocent Ohio woman in jail and those big cardboard checks that lotteries and sweepstakes hand out.

Finicky about ink

When you write a check, it enters a hidden, Rube Goldberg world -- especially if you mail it cross-country, as you do when you pay your credit card bill. An employee of a bank or an independent "lockbox" operation opens the envelope and prints the amount in the bottom right corner of the check with magnetic ink. From there it might go from the recipient's bank to a Federal Reserve regional bank to another Federal Reserve bank to the payee's bank. It might be packed in various boxes and bags and transported on trucks, airliners or even trains.

This complex system processes 60 billion checks a year. Laid end-to-end, 60 billion checks would create a huge mess at the first puff of wind, and America's payment structure abhors a mess.

  • account owner's name
  • the date
  • "pay to the order of" plus payee's name
  • dollar amount in numerical and written form
  • name of bank where account is held and bank's city and state
  • signature of account owner
    So, to speed up the flow of checks and eliminate messes, the American Bankers Association and the American National Standards Institute publish standards that dictate sizes, paper thickness, background colors and other qualities. The standards allow two main check sizes: the ones you carry in your checkbook, and the bigger ones that you probably get if your paycheck is printed by a machine.

    Standards govern the placement of those numbers and symbols printed on the check's bottom edge. They are printed in magnetic ink that scanning machines can read in about three seconds. Each character has its proper place, starting from right to left. The check's amount is printed at the right, the check number is printed to the left of that, the account number to the left of that, and the bank's routing number to the left of that.

    Scanning machines are finicky about the placement of these numbers and symbols. That's why, when you order checks for the first time from a discount printer, you are asked to mail a voided check with your order form: to make sure the routing and account numbers are printed in the proper places. If they're off, scanners will reject them and someone will have to sort the check by hand. Machines reject about 1 percent of checks, which means that people have to sort about 600 million checks by hand annually -- and that costs the banking industry millions of dollars.

    A machine might reject a check for reasons besides improper placement of the numbers at the bottom. The paper might be torn or wrinkled, or the magnetic ink might not be magnetic enough.

    Banks want to exert some control over the quality of their customers' checks, and that's one reason they make it so easy to reorder checks from approved printers. At least one bank, USABancshares, actually discourages customers from buying checks from any other source but its approved printer, Deluxe, and threatens "to charge you a fee for problems we have in processing items that were not supplied by our approved vendors."

    Plainly a mistake

    Because the standards specify paper thickness and acceptable background colors, it's almost impossible to photocopy a check and pass it successfully. Any gum-popping cashier can spot a check copied onto ordinary paper.

    But what if the bank accidentally prints a check on ordinary paper? Trouble like an innocent Cleveland-area woman got into in February.

    According to The Plain Dealer, the woman tried to cash two child-support checks at a grocery store. To her surprise she was hauled into the police station where she was fingerprinted and photographed in front of her 10-year-old daughter, who had accompanied her to the store.

    Turns out it was a mistake: Bank One accidentally had printed the checks on plain white paper. They looked like photocopied fakes, so the store's cashier called police. A bank spokesman told the newspaper that the checks had been printed on a splice of plain paper in a large roll of standard check stock.

    Were those valid checks? Absolutely, if the required information were printed on them -- even if they weren't printed on check stock.

    Paper everywhere

    When a lottery or sweepstakes or golf tournament winner gets one of those giant checks printed on cardboard or posterboard, it's obvious that the check doesn't conform to standards of size or paper type.

    "They're just for show," says Samantha Better, spokeswoman for iWon, the Web portal that gives away $1 million in a monthly sweepstakes. "You can't cash them. We give them a normal check." Most winners, she says, keep their giant check as a souvenir.

    But just suppose that a deranged person wanted to deposit the giant check and keep the paper check as a souvenir?

    "If they have all the elements, they can be legal tender," says Black, the Bank Administration Institute managing director.

    So if you really, really wanted to, you could deposit it. And the IRS could deposit a check written on the back of a shirt, if the payer refused to act like a grown-up and write a real check. The same if a drunk wrote you a check on a cocktail napkin. If all the required information is there, it's valid.

    But when you take something like that to the bank ...

    "What they probably would do is create a substitute document for it," Black says, "to put through the paper processing system."

    So there's no escaping paper. graphic