For many American households, cashing a check isn‘t as simple as making a trip to the bank. According to the most recent FDIC Survey of Unbanked and Underbanked Households, 6.5% of families in the US – approximately 8.4 million households – were unbanked in 2017. That means they don‘t have a checking or savings account at a bank or credit union.
When you‘re living without a bank account, turning those paper checks into spendable cash becomes a more complicated process. You‘re likely all too familiar with the experience of searching for a place that will cash your check, often at a steep cost. In 2018 alone, a staggering $58.2 billion in checks were cashed at non-bank financial institutions according to the Financial Service Centers of America.
If CVS is your go-to spot for prescriptions, snacks, and household essentials, you might be wondering – can I add check cashing to that list? I did some serious digging into CVS‘s check policies to bring you the lowdown. Plus, stick around as we explore some of the smartest alternatives out there for cashing your checks and holding onto more of your hard-earned money.
CVS Check Policy: The Good, the Bad, and the Fine Print
Let‘s rip the band-aid off right away: CVS does NOT cash checks of any kind. it doesn‘t matter if you‘ve got a payroll check, a government benefit check, a personal check from grandma, or anything in between – CVS will not convert it to cash for you. However, there are a few key things to know about using checks at CVS:
You Can Pay By Check (With Some Caveats)
If you‘ve got a check made out to you, CVS will generally let you sign it over and use it as payment for your purchase. So while they can‘t give you cash in hand, you can still put that check towards your essentials. Just be aware of a few guidelines:
- Be prepared to show a valid, government-issued photo ID to pay by check. No ID, no sale.
- CVS uses an electronic check verification system called TeleCheck to approve checks. If your check gets flagged as high-risk, it will likely be declined.
- Paying by check means you won‘t be able to get any cash back – only the exact amount of your purchase.
Certain Checks Get Rejected
While CVS is fairly flexible in accepting personal checks for payment, there are some types they simply won‘t take, period:
- Cashier‘s checks and official bank checks are generally a no-go, even though they‘re typically considered guaranteed funds.
- Depending on the specific store location, starter or counter checks from newly-opened bank accounts may not be accepted due to the higher risk of them bouncing.
- If you‘re unsure whether your check will be accepted, save yourself the headache and call the store directly to confirm before making the trip.
Beyond CVS: Your Smartest Check Cashing Alternatives
When getting your check cashed at CVS is off the table, what‘s an unbanked consumer to do? Don‘t sweat it – you‘ve got options. Here are some of the savviest ways to turn that paper into cash without losing a significant chunk of it in the process.
1. Your Local Bank or Credit Union
Okay, I know what you‘re thinking – isn‘t this whole article about how to cash checks WITHOUT a bank account? Hear me out. Even if you don‘t have a traditional checking or savings account, it‘s still worth seeing if your local bank or credit union offers any low-cost check cashing options specifically for non-members.
Some institutions will cash certain types of checks (like government or payroll checks) for free or at a reduced fee if you‘re willing to open a low- or no-cost checking account with them. It never hurts to ask! Building a banking relationship now, even a basic one, can be an important first step towards greater financial stability and freedom in the long run.
2. Major Retailers and Grocery Chains
You might be surprised to learn just how many of your go-to retail and grocery chains have thrown their hats into the check cashing ring. Here‘s a quick breakdown of some of the biggest players and what they charge:
| Retailer | Check Types | Fee |
|---|---|---|
| Walmart | Payroll, govt, tax, 401k, etc | $3 for checks up to $1000, $6 for $1001-$5000 |
| Kroger | Payroll, govt, tax, insurance | $3.50 up to $2000, $5.50 for $2000-$5000 |
| Safeway | Printed payroll and govt | $2.25 per check up to $200 |
| Wegmans (with Shoppers Club) | Personal and rebate | FREE up to $500 for personal checks, up to $20 for rebate checks |
Keep in mind that fees, limits, and accepted check types may vary by store location. But in general, major retailers can be a convenient and cost-effective option when you‘re in a pinch.
3. Check Cashing Stores
For the unbanked, an entire industry has sprung up around providing an alternative to traditional banking services: check cashing stores. ACE Cash Express, Amscot, and The Check Cashing Store are just a few of the national chains where you can convert virtually any type of check into cash on the spot.
The convenience of these stores comes at a premium, though. Expect to shell out anywhere from 1-3% of your check‘s value for a payroll or government check, and up to 5% or more for a personal check, according to NerdWallet.
Here‘s an eye-opening example. Let‘s say you‘ve got a $1000 personal check you need to cash. At 5%, you‘d be forking over $50 to the check cashing store right off the bat. Cash that same check at Walmart instead, and you‘d pay just $3. Over time, those fees add up FAST.
While check cashing stores can be a lifesaver in an emergency, they‘re not a sustainable solution for the unbanked. Relying on them too often means you‘re just treading water financially – not making real progress.
The Risks and Realities of Check Cashing for the Unbanked
The unfortunate truth is, being unbanked is expensive. When you‘re living paycheck to paycheck, paying a premium just to access your own money can be a serious drain on your already limited resources.
According to the FDIC, 59% of unbanked households used some form of alternative financial service in 2017 – including 30% who used a check cashing service specifically. The fees and interest associated with these services cost the average unbanked household a whopping 9.5% of their annual income.
What‘s more, the unbanked are at a greater risk of falling victim to predatory practices and scams. An estimated 1 in 4 unbanked households have been targeted by fraudsters, compared to just 16% of fully banked households (FDIC). When you‘re already financially vulnerable, a brush with fraud can be catastrophic.
Finding a Better Way Forward
While convenient check cashing alternatives can provide much-needed relief in the short term, they shouldn‘t be relied upon as a permanent solution. Some strategies for transitioning away from check cashing over time include:
- Exploring low- or no-cost "second chance" checking accounts, prepaid debit cards, and secured credit cards as a stepping stone towards traditional banking
- Taking advantage of financial education and counseling programs through non-profit organizations and community centers
- Building up savings, even in small increments, to reduce the need to cash every check immediately
- Seeking out reputable online and mobile banking options that don‘t require a minimum balance or charge hefty overdraft fees
- Advocating for policies and programs that expand access to mainstream financial services in underserved communities
As Theodora Hadjimichael, CEO of the Responsible Business Lending Coalition puts it: "Policymakers, banks, and community organizations must work in tandem to develop safe, affordable, and transparent products that meet the unique needs of the unbanked and underbanked. Only then can we start to close the growing gap between the financially included and excluded in this country."
The road to financial inclusion is a long one, full of systemic barriers and deeply-rooted economic disparities. Check cashing services, when used judiciously and combined with other responsible money management strategies, can provide a much-needed lifeline along the way. But they should never be mistaken for a permanent solution to the very real challenges faced by millions of unbanked Americans.
Empowering ourselves with knowledge remains one of our greatest weapons in the fight for financial justice. By understanding the true costs and risks of check cashing, unbanked consumers can make more informed choices about where to turn for this crucial financial service – and ultimately, begin to forge a path towards a more inclusive and equitable financial future.
