How to Void a Cashier's Check: A Step-by-Step Guide

The short answer to this question is yes, a cashier's check can be voided. However, the exact process will depend on your bank and whether you are in possession of the check-in question. Generally, most banks take around 90 days to refund the voided check and also charge a cancellation fee.

How to Cancel a Cashier's Check

If, for some reason, you need to cancel a cashier's check, follow these steps: 

Contact Your Bank

The first and most important step is to contact your bank immediately if you have a reason to cancel the check. Theft or fraud are examples of reasons for canceling a cashier's check. This rule applies to the recipient or issuer of the check.

Declare Loss

The next step involves filing a declaration of loss with the bank that provided the check. In banking lingo, a declaration of loss is a legal document stating that the declarer lost possession of a cashier's check. 

After filing a declaration of loss, the bank will take around 90 days to deliver the funds back to you. 

Can a Cashier's Check Be Voided if You Change Your Mind About the Payment?

Suppose you already sent the check but changed your mind. In that case, the bank will likely not approve your request to void the check. Instead, the funds will be deposited into the payee's account as initially intended. Thereafter, you may contact the payee directly to have them reverse the funds back to you.

What Happens if the Payee Won't Refund the Money?

If that's the case, then the bank will likely not have anything to do with it. This will be a dispute between you and the payee, not the bank. You may need to hire an attorney to explore your legal options. 

What if I Change My Mind, But I'm Still in Possession of the Cashier's Check?

If you're still in possession of the check, meaning you don't intend to proceed with the transaction, you may be able to have the cash returned to your bank account. Note that you won't need to file a declaration of loss in this case.

Instead, contact your back for further guidance. While your specific bank might have a different process, most banks will require you to send the check back to them.

Before doing that, you'll need to write a statement on the check confirming that it was not used for the intended purpose. This could be something as simple as “not used for the purpose intended.” Once that's done, you'll hand over the check to the teller, who will then transfer the money back to your account. 

What's the Difference Between a Cashier's Check and a Personal Check?

Many people think that a cashier's check is the same as a personal check, but these two are completely different from each other. Below is everything you need to know about them. 

Personal Check

This is one of the most common types of bank checks. Usually, some banks allow their customers to buy personal checks from them. However, depending on the type of account you have with the bank, you may receive a free personal check from the bank. 

How Does a Personal Check Work?

A personal check is the kind of check that draws money from your bank account and sends it to the recipient of the check. Basically, when you write a personal check, you're authorizing your bank to withdraw the stated amount from your bank account. Then, the payee receives the stated amount in their bank account after cashing the check.

A payee is a person or party to whom the money is paid to. 

Personal checks are pretty popular because they are:

• convenient and easy to use;
• safer than using real money; and
• cheaper than most payment options (you don't need to pay anything to deposit a check).

On the other hand, personal checks also come with some disadvantages.

Firstly, some businesses no longer accept personal checks due to the increased risk of fraud. 

Secondly, your bank might charge you a service fee if you write too many checks. 

Lastly, personal checks can be difficult to deal with when balancing your accounts. Because the payee may not cash the check immediately after receiving it, the current balance in your bank account might not be a true reflection of what you have in your account. 

Cashier's Check

A cashier's check is the kind of check that draws funds from the bank's account, not yours. This option usually works best when you want to transfer large amounts of money from your bank account to the payee. 

How Does a Cashier's Check Work?
A cashier's check works as a direct opposite of a personal check. 

When the account holder wants to make a big purchase, such as a house, car, or piece of land, the cashier's check system comes in handy. The account holder (payer) authorizes the bank to withdraw a certain amount of money from their account. 

The money is then transferred into the bank's own account. The check is processed and signed by a cashier or bank teller and then delivered to the payee. As a result, the check will appear as though it's been sent and signed for by the bank, not the payer. 

So, what's the purpose of having a cashier's check when you can have a personal check for the same transaction? To better understand why certain transactions work best with a cashier's check than a personal check, let's look at the advantages of the former. 

Pros of a Cashier's Check
One great benefit of using a cashier's check is that it almost guarantees the money will be available. To put things into perspective, let's compare these two kinds of checks. 

When you write a personal check, the payee will deposit the check in their bank. The bank will then withdraw the money from your account and transfer it to the payee's account. However, if your account doesn't have the money stated in the check, the transaction will be declined. This is what is famously known as a “bounced check.”

The same applies if the check is fraudulent. The payee will not know about it until when they deposit the check. 

On the other hand, things work differently when you use a cashier's check. First, your bank will withdraw the money from your bank account and set it aside (in the bank's own account). Then, the bank will write, print, and sign the check. You'll then deliver the check to the payee.

For this reason, a cashier's check guarantees that the money stated in the check is available. This explains why many businesses trust cashier's checks more than personal checks. It also explains why cashier's checks are more popular for bigger transactions than personal checks. 

Earlier, we mentioned that after writing a personal check, your account balance might not truly reflect what you have in the bank account. For example, let's say you have $10,000 in your bank account and write a personal check for $5,000. 

The payee receives the check but decides to bank it two weeks later. In that case, your bank account will still show $10,000, but in reality, you only have $5,000 remaining. This is because the other $5,000 will come out of your account when the payee deposits the check and is processed successfully. 

Now, let's look at the other side of the coin. When you have $10,000 in your bank account, and you decide to write a cashier's check for $6,000, your bank will withdraw the $6,000 and deposit it into their own account. 

This means that you'll have $4,000 as your actual balance. So, for this reason, you won't go around planning for that one vacation you've always wanted to go to, thinking you have $10,000. That's something that happens quite often when dealing with personal checks. 

Cons of Cashier's Checks
Cashier's checks might have many pros, but they are not perfect. The risk of fraud is always high regardless of the kind of check you use. Some fraudsters have invented different ways to create authentic-looking cashier's checks. Unfortunately, you'll only find that out when you deposit the check with your bank.

Some bank accounts don't offer cashier's checks for every client. This kind of check may only be available to customers with premium accounts.

In addition, some banks charge processing fees for cashier's checks. The exact fee depends on your specific bank but usually ranges between $5 and $15. 

Lastly, a cashier's check is not as convenient as a personal check. To have this check written, you'll need to visit your local bank and speak with the cashier or teller. Although some banks might allow you to order these checks online, others don't provide this option. 

Is a Cashier's Check the Same as a Money Order?

A cashier's check and a money order serve the same purpose - to transfer funds from one party to another. But that's all they share in common. Other than that, these two money transfer options are very different from each other. 

Now that you know what a cashier's check is and how it works let's briefly discuss a money order. 

A money order is a form of payment that acts as an alternative to cash, personal checks, and cashier's checks. Typically, you'll find a money order at your local post office, grocery store, and many other places.

However, money orders are usually used for smaller transactions, mostly under $1000. Unlike a cashier's check, the good thing about using a money order is that you don't need a bank account. Also, unlike a check, a money order won't display certain private information about you. 

What Is the Maximum Amount for a Cashier's Check Transaction?

The answer to this question will depend on your bank's policies. However, it's important to note that cashier's checks usually have a higher limit than money orders and personal checks. This is because the money stated in the check is available and guaranteed by the bank.

What Do I Do if My Check Has Bounced?

If someone wrote you a bad check, you'll need to contact them to find a solution. However, if you already honored your end of the deal, for example, selling a car to them, but they provided a bad check, you may want to involve law enforcement. 

Can I Sue My Bank if I Am a Victim of Fraud?

Yes, you can sue your bank, but this also depends on your situation. For example, you may be able to sue your bank if they acted negligently, making you lose a lot of money in the process. Other times, you may sue a bank for failing to refund fraudulent charges. However, for this to work, the defense will consider when you reported the charge. 

For instance, if you took 60 days to report the loss, you may be responsible for all fraudulent payments. But, again, this depends on your bank's policies regarding fraudulent transactions. 

An experienced consumer protection attorney can help determine whether you have a case against your bank or any other institution. At Morgan and Morgan, our consumer protection lawyers have the experience and resources to fight for you. In 2020, we were named Law360's consumer protection group of the year.

If you believe that a particular institution violated your rights as a consumer, we might be able to fight for you. Contact us online to schedule a free consultation with an experienced legal representative.