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Letter template

Returned Check Letter Template for Business Customers

Updated 2026-10-24

A returned check letter tells a business customer that its check was returned unpaid by the bank, usually for nonsufficient funds (NSF), and asks for a replacement payment in good funds by a set date. It lists the check number, amount, and return reason, and any returned check fee only if your terms provide for one and state law allows it. It should stay factual and must not threaten criminal charges.

When to use this template

  • As soon as your bank notifies you that a customer's check was returned for NSF, closed account, or stop payment.
  • When you want a written record of the returned check before deciding whether to redeposit it or ask for a new payment.
  • When a customer has had more than one returned check and you need to require certified funds going forward.
  • When your state has a civil returned check notice process and you want to send a first business notice before considering it.
  • When an ACH or electronic payment from a business customer is reversed or returned, since the same wording works with small changes.

The template

{Your Company Name} {Your Address} {City, State ZIP} {Date} {Customer Contact Name} {Customer Company Name} {Customer Address} {City, State ZIP} Re: Returned check {Check Number}, account {Account Number} Dear {Customer Contact Name}, On {Return Date}, our bank returned check number {Check Number}, dated {Check Date}, in the amount of {Check Amount}, drawn on {Customer Bank Name}. The bank's stated reason for the return was {Return Reason, such as Nonsufficient Funds}. This check was applied to invoice(s) {Invoice Numbers}. Because it was returned, those invoices are open again. Amount of returned check: {Check Amount} Returned check fee (if provided in our terms): {Returned Check Fee} Total now due: {Total Due} Please send a replacement payment of {Total Due} by {Payment Deadline} using one of these methods: - Wire or ACH transfer using the remittance details below - Cashier's check or certified check payable to {Your Company Name} - Online payment at {Payment Link} Remittance details: Bank: {Bank Name} Routing number: {Routing Number} Account number: {Account Number} Reference: Returned check {Check Number} Please do not send another company check for this amount unless we confirm in writing that it is acceptable. Until this is resolved, new orders may require payment in advance. If you believe the bank returned the check in error, please contact your bank and let us know what you learn. You can reach me at {Your Phone Number} or {Your Email}. Thank you for taking care of this promptly. Sincerely, {Your Name} {Your Title} {Your Company Name} Enclosure: Copy of returned check and bank notice

How to customize it

  • Enclose a copy of the returned check and the bank's return notice. It removes any question about what happened.
  • Include a returned check fee only if your invoices, credit terms, or contract provide for one, and keep it within your state's legal limit. Otherwise delete that line.
  • If the return reason was 'stop payment,' the customer may be disputing the work. Ask whether there is an issue instead of treating it like a simple NSF.
  • Keep the payment deadline short, often 5 to 10 days, since the customer already believed the payment was sent.
  • If your bank allows redepositing NSF checks, decide whether to try once more before sending the letter, and say so if you do.
  • Call the customer the same day the check comes back, then send the letter as written confirmation. A quick call often gets a wire sent within a day or two.

Mistakes to avoid

  • Never threaten arrest, criminal prosecution, or a 'bad check' charge to get paid. Even where bad check laws exist, using criminal threats to collect a debt can create liability for you.
  • Do not add fees that are not in your terms or that exceed your state's cap on returned check charges.
  • Avoid accusing the customer of fraud. Most returned checks come from timing or cash flow problems, not intent.
  • Do not mention the returned check to the customer's own clients or vendors.
  • Do not keep accepting company checks from a customer with repeat returns. After a second return, state in writing that future payments must be made by wire, ACH, or certified funds.
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Frequently asked questions

Can I charge a fee for a returned business check?

Often yes, if your terms provide for it, and within the maximum your state allows. Many states set a cap on returned check fees. If your terms are silent, do not add one.

Should I redeposit a check that bounced for NSF?

Some banks allow one redeposit, and it sometimes clears if the customer's funds came in. Many businesses prefer to ask for a wire, ACH, or certified funds instead, to avoid a second return.

What if the customer does not replace the returned check?

Treat the balance like any other past due invoice. Follow up with a past due notice and a final notice, then refer the account to a commercial collection agency if it remains unpaid.

Can I file a criminal complaint over a bounced business check?

Do not use that as a collection tactic, and never threaten it in a letter. Some states have bad check laws, but whether one applies is a question for an attorney or law enforcement, not a pressure point in a payment request. Pursue the balance as a civil debt.

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Prepared by the Ironside Commercial Recovery collections team. General information, not legal advice. Have counsel review letters that reference legal action or statutory requirements.

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