Check Cashing Industry
Why Check Cashers?
By B2
Jan 6, 2003, 10:22am

Why Check Cashers?

Here is the big question. Why would a consumer chose to use a check casher rather than go to a bank? If you were to poll the non-industry experts they would say without hesitation that "the customer wants to stay below the radar" and "the customer obviously has something to hide". Well these non-industry experts are very far from the truth.

If you were to ask the same question of check cashing industry experts they would be a little closer to the mark by saying "they are treated better at check cashing outlets" and "it is more convenient than going to the checks originating bank to cash the check". But still even the industry experts look at it from a slightly skewed perspective.

The absolute reality is that each customer has a different reason for choosing to frequent a check cashing outlet. And if you really want to learn why a person chooses a check cashing outlet over a bank you have to get the information directly from the source. So we did!

Customers of check cashing stores cannot be broke down into groups very easily as the base is so diverse and the numbers staggering. Here are some of the more frequently stated reasons for using a check cashing store:

* If I go to the bank that the check is written on I get charged to cash the check there anyway. So why not go to the local check casher and get it done faster and with less hassle.

* I really like the people at the check cashing store I go to. The people there are friendly.

* On more than one occasion they were able to help me cash a check that the bank refused to cash because I didn't have the two identifications that the bank required. That is why I keep going back to them.

* If I go to the bank and deposit a check the funds are tied up for a couple days before I can even get to use any of it. I need access to my money now not later. So I cash the check and then deposit the cash for immediate availability.

* It is much faster going to the check casher rather than standing in line at the bank.

* All of the checks that I get are drawn on banks that are not close by. I really do not have any other option.

* I save money and create a faster cash flow. Check cashers can get it done faster than banks.

* I am from out of town and the banks would not cash my checks because of it.

* I didn't have ID. Well at least I thought I didn't till the check cashing store found ways to do it. They used things like my vehicle registration, insurance card, utility bills and more to establish that I am who I said I was. And they did it without making me feel small.

* I cash my check, pay my bills and get money orders all at the same time.

* The place is clean, well lit and comfortable. I feel very safe doing business there.

* It is fun! The people are a lot of fun as well as other customers. I go back because I like it!

As you can see, with these few reasons for use, the customers feel satisfied when they use a check casher for many reasons. But ultimately they all felt that the check cashing outlet had something to offer that the bank didn't or couldn't. So if you lumped all of these items into a set of items on a tick list it would look something like this:

1. Clean, well lit and safe facility
2. Friendly, fun and responsive employees.
3. Fast, efficient service.
4. Diverse product mix.
5. Get it done attitude.
6. Cash flow enhancement
7. The customer is a guest
8. Creative thinking

So what should you do as a check casher to capitalize on these assets? Take a look at your facility.

Does it need paint, new carpet, or better lighting?
Is your staff friendly and have the mindset when handling checks that they are going to find a way to get the job done for the customer?
Do you offer more reasons than check cashing for a customer to take advantage of when visiting your facility?
What can you do to enhance your ability to increase the customers cash flow?
 

As a bank what should you look at?

Is your facility large, impersonal and dark?
Is your staff just going through the motions when interacting with customers?
Is customer service speed a focus of your supervisors?
Do you train your staff on creative thinking?
Do you feel that your bank adds value to the customers experience?
Do you offer a convenience factor for services and products other than check cashing?

As a customer what should you be looking for?

Do you feel that the facility is safe, well lit and clean?
Do you feel like a guest and an important part of the facilities business?
Are the employees friendly and do their very best to assist you?
Does the facility assist you with other products and services that make your life easier?
Does the facility assist you in maximizing your cash flow?

All in all check cashers can and do offer a level of service that is not seen in banking. This does not mean that banks cannot learn how to be better though. In fact, banks can be a serious threat to the check cashing industry if they took their service to a level equal to a check cashing store.

To compete though they would have to meet on the same playing field as a check cashers plays on rather than trying to force the check casher to theirs. This means that they would have to learn how to ID a customer without requiring a credit card, state issued identification card or state issued drivers license. Funds would have to be made available on the spot. Fees for each type of check cashed need to be posted at each station and in parity with those that the check cashers are held to by state laws.

But here is where a bank would have an advantage over a check casher, "the originating bank" of the check should not charge a fee for a non-bank customer to cash a check. It is very logical to say that a fee is charged to handle interbranch checks. But a fee for cashing a check at the facility it was drawn on has no logical reason for a fee to be charged.  This undermines not only the new relationship that you can generate from the check cashing customer it also devalues the relationship that you already have with the check issuer. The issuer has given a promise to pay if taken to a specific branch. You break that promise when the amount you give to the check cashing customer is less than the promised amount.

So why check cashers? The answer is simple, because they get it done!

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