What Percentage Do Check Cashing Places Charge?

Check cashing services allow individuals to convert checks into immediate cash. They are particularly useful for the millions of unbanked or underbanked individuals in the United States. While convenient, these services typically charge a fee for immediate access to funds.

Typical Fees Charged

Check cashing services generally charge a fee that is either a percentage of the check’s total value or a flat rate. These fees can range broadly, typically falling between 1% and 12% of the check amount. The Consumer Federation of America reports an average nationwide percentage of 4.1% for cashing a check at these services. For example, cashing a $1,000 check at a 4.1% rate would cost $41. Some large retailers, like Walmart, offer flat fees, such as $4 for checks up to $1,000 and $8 for checks over $1,000, with higher limits during certain periods.

Factors Affecting Fees

Several factors influence the specific fees charged by check cashing services. The type of check presented is a primary determinant. Payroll and government-issued checks, like tax refunds or Social Security benefits, are generally considered lower risk due to their reliability, often resulting in lower percentage fees. Personal checks, which carry a higher risk of insufficient funds or fraud, typically incur higher fees. For instance, some services might charge around 1.5% for government checks, but 9.9% for personal checks. The amount of the check also plays a role; some providers implement tiered pricing where larger checks might have a different fee structure, or a minimum fee may apply regardless of the check’s small amount.

Fees can also be influenced by state-level regulations, as some states cap the maximum percentage a check casher can charge. For example, some states may limit fees to a certain percentage of the check’s face value, such as 3% in California or up to 10% for certain checks in Oregon. Beyond regulations, individual service providers set their own rates within legal limits, leading to variations in charges between different check cashing businesses and locations.

The Check Cashing Transaction

Cashing a check at a dedicated service involves a few standardized steps. First, the customer presents the check along with a valid government-issued photo identification. Acceptable IDs commonly include a driver’s license, state-issued identification card, military ID, or passport. This helps verify the customer’s identity and prevent fraudulent transactions.

Following identity verification, the service calculates the fee based on the check type and amount, then clearly discloses this cost to the customer. Once the customer agrees to the fee, the transaction is finalized. The customer receives the cash amount minus the disclosed fee, along with a receipt detailing the transaction. This process allows for immediate access to funds.

Other Common Check Cashing Venues

While specialized check cashing services are one option, several other venues also provide check cashing. Individuals can often cash a check at the bank it was drawn on, even if they do not have an account there. Many banks will cash an “on-us” check (a check written from their customer’s account) for a non-customer, though a flat fee, such as $8, or a percentage of the check amount may apply. Some banks might also require two forms of identification for non-customers.

Individuals with their own bank accounts can deposit or cash checks directly at their financial institution. This method is typically free for account holders and offers the convenience of direct deposit or mobile deposit through banking apps. Additionally, many large retail chains and grocery stores offer check cashing services. Stores like Walmart, Kroger, and 7-Eleven provide this service, often at lower fees than dedicated check cashing stores. Walmart, for example, charges $4 for checks up to $1,000. These retail options can be a convenient alternative for immediate cash access while shopping.