Cheque yourself before you wreck yourself

A handy checklist for things to be aware of if a buyer has paid by cheque.

By Trust and Safety 1 December 2020

For anyone wondering if cheques even still exist, they do for now but most NZ banks will stop accepting them by the end of 2021.  Check with your bank for specific details. 

While most members might go a whole lifetime without using, cashing or even seeing a cheque, sometimes this might be a preferred payment option for buyers.

Different banks will have different ways of processing cheques, and all will have their own wait time before this money will clear into your account.

“Clear?”, you might be saying?

Yes – although these funds will show up in your account the day they’re deposited, you’re unable to access or use these funds until they’re processed by the bank. The bank first needs to be satisfied that the total amount deposited is available in the payer’s account.

A very important thing to understand here, is that buyers can deposit cheques directly to your bank account, if they have your account number – they don’t need to physically hand you these cheques. It’s also very common for sellers on Trade Me to have their bank account number sent automatically through payment instructions when a trade is completed.

This is why it's super important to understand the difference between ‘available’ balance vs ‘account’ balance. This way you can tell if you’re actually able to access these funds or not, or whether the bank is still processing the transaction.

Some banks can take up to five working days to make these funds accessible in your account.

So although you might be thinking “yes! I can go buy that snazzy new bike I’ve always wanted with all the pretty money I’ve just received”, you won’t be able to access those funds if it’s still in the processing period (and the payment might even be reversed if the cheque doesn’t clear). Cheques can be dishonoured for a variety of reasons from insufficient funds in the payee’s account to the cheque being filled out incorrectly.

Below is a handy checklist for things to be aware of if a buyer has paid by cheque:

  • ‘Available’ balance vs ‘account’ balance
    When looking at your account statement, you might see two different balances – your ‘available’ balance, and your ‘account’ balance. If your account balance is more than your available balance, this may mean a payment is still clearing. You should wait until your available balance matches (and no more payments are pending) before releasing your goods.
  • The payment reference
    You may see the words ‘deposit’, ‘teller deposit’ or ‘cheque’ mentioned in the payment reference – if so, refer back to the above point just to make sure the payment has fully cleared. If you see the word ‘dishonoured’ this means the payment was reversed and never cleared – you should not go through with the trade at this point.
  • If in doubt, check with your bank!
    If you think a trader may have paid you by cheque, or your account balance doesn’t add up – it may be worth giving your bank a call, as they should be able to give you some expert advice.

We aren’t saying you need to avoid cheques at all cost, just don't release your goods until the cheque has cleared and the funds are accessible – which may take a wee bit longer than most sellers might want.

This includes completing the trade in person too, if you are given a cheque from the buyer, you need to be aware these cheques can always be dishonoured and aren’t quite the same as being handed cash.

So you may want to hold onto your goods until this money clears.

If you are looking for something a bit quicker, you can always advise buyers to use Pay Now or Ping. This way our sweet Buyer Protection Policy will apply on those listings - meaning Trade Me will likely cover any loss.