what does refer to maker mean on returned check

3 min read 26-12-2024

what does refer to maker mean on returned check

A returned check marked "Refer to Maker" can be frustrating. It means the bank has rejected the check and needs more information. This article explains why this happens and what you should do. Understanding this process can save you time and potential financial trouble.

Reasons for a "Refer to Maker" Return

Several reasons cause a bank to return a check with the "Refer to Maker" notation. These reasons often involve discrepancies or missing information that prevent the bank from processing the payment. Let's examine the most common causes:

Insufficient Funds (NSF)

This is the most frequent reason. "Refer to Maker" might accompany an "Insufficient Funds" (NSF) notation. It simply means the account holder didn't have enough money to cover the check's amount. The bank returns the check, requiring the payer (the maker) to resolve the funds issue.

Account Closure

The account the check was drawn from might have been closed. This prevents the bank from processing the payment. The "Refer to Maker" instruction indicates that the check writer needs to address the account closure issue.

Stop Payment

The account holder may have placed a stop payment on the check. This is a deliberate action preventing the check from being cashed. The bank returns the check and indicates that the maker needs to resolve the stop payment.

Signature Discrepancy

If the signature on the check doesn't match the signature on file with the bank, the check will be returned. This is a security measure to prevent fraud. The "Refer to Maker" directs the person who wrote the check to clarify the signature issue.

Altered Check

A check that has been altered or tampered with, even slightly, will be returned. This could involve changes to the amount, date, or payee. The bank needs the check writer (maker) to verify the authenticity of the check.

Incorrect Account Information

Occasionally, the account number or other identifying information on the check is incorrect. This prevents the bank from locating the correct account. "Refer to Maker" instructs the check writer to correct this information.

What to Do When You Receive a "Refer to Maker" Check

Receiving a check marked "Refer to Maker" requires prompt action. Here's a step-by-step guide to handle the situation effectively:

Review the Return Reason: Carefully examine the check and any accompanying documentation. Note the specific reason for the return. This helps identify the necessary corrective actions.
Contact Your Bank: If you wrote the check, immediately contact your bank to understand why it was returned. Inquire about resolving the issue, whether it's insufficient funds, a stop payment, or a signature problem.
Contact the Payee: If you received the check, promptly inform the person who issued the check about the "Refer to Maker" return. Explain the reason why the check bounced, and work together to resolve the situation. Perhaps they can reissue the check or offer an alternative payment method.
Correct the Problem: Based on the return reason, address the underlying problem. Deposit more funds into your account if it was due to insufficient funds. Verify your signature with your bank if that was the issue.
Re-issue the Check (If Applicable): If you need to re-issue a check, ensure all information is accurate and that sufficient funds are available in your account.

Preventing "Refer to Maker" Returns

Proactive measures can help you avoid this issue in the future. These include:

Maintain Sufficient Funds: Always ensure that you have enough money in your account to cover the checks you write.
Double-Check Information: Verify all information on the check before writing and signing it.
Keep Accurate Records: Maintain accurate records of your transactions to track your balance and avoid overdrawing your account.
Update Your Bank Regularly: Keep your bank informed of any changes in your signature or contact information.

By understanding the reasons behind a "Refer to Maker" return and following the suggested steps, you can effectively address the issue and prevent future occurrences. Remember, prompt action is key to resolving returned check problems.