A bounced cheque is one the bank returns unpaid. People assume it means no money in the account — often it does not.

  • Insufficient funds. The balance will not cover it. The classic case, and the one with legal consequences in many countries.
  • Exceeds arrangement. The account has an overdraft but this would breach it.

Technical — and this is the bigger group

  • Amount in words and figures disagree. The most common technical cause. The bank will not pick one.
  • Signature mismatch. Does not match the specimen the bank holds. Signatures drift over years.
  • Cheque is stale. Presented outside its validity period.
  • Presented before its date. A post-dated cheque banked early.
  • Date missing, incomplete or impossible.
  • Alterations. Any overwriting, even initialled.
  • Illegible. If the bank cannot read it with confidence, it will not pay it.
  • Damaged or torn such that it cannot be scanned for truncated clearing.
  • Stop payment instructed.
  • Account closed, frozen or dormant.
  • Payee name mismatch on an account payee cheque.

Worth separating out, because they are entirely within your control:

  • Text outside its field. On a truncated-clearing system a machine reads the image first. Text across a box division may pass a human and fail a scanner. See fixing alignment.
  • Printing over the MICR band. Non-magnetic ink over magnetic characters breaks machine reading.
  • Faint output. A nearly-empty cartridge produces a cheque a scanner cannot read.

What it costs

Both banks usually charge — see cheque return charges. Beyond the fee there is the damage to the relationship, your banking record, and in the case of insufficient funds, potential legal exposure that varies by country. In India, dishonour for want of funds engages section 138 of the Negotiable Instruments Act. Several Gulf states have changed their approach in recent years — the UAE moved to civil rather than criminal enforcement in 2022. Take local advice rather than relying on general reading.

Reducing them

For funds: know what is due to clear. Post-dated cheques written months ago are the usual culprit — the money was there when you wrote it. Keep a forward view of outstanding cheques.

For technical causes: printing removes most of them. Words derived from figures cannot disagree; dates and formatting stay consistent; nothing is illegible. What remains is the signature and having the funds.