Honesty is for the most part less profitable than dishonesty.
—Plato, Greek philosopher
If I had listened to my intuition, I could have saved myself some trouble. I would have heeded the many clues that the shoddy owners of the mom-and-pop business gave me. I would have run out of their dubious restaurant as fast as I could and never come back.
Instead, I ignored my intuition and accepted the restaurant’s order to place an advertisement in my magazine. I told the owners, a wife-and-husband team, that our next issue was going to press soon and that they would see a quick return on their investment. I prepared the order, took their check, and ran their full-page, color ad.
The adventure and hard lesson began a few days later when I checked my bank account, which was off by $321, the exact amount I had charged the restaurant for its ad. After a closer look at my account’s recent transactions, I noticed that the customer’s check had bounced. Sure enough, a few days after that, I received the restaurant’s rubber check in the mail with the damning NSF (nonsufficient funds) stamp, and my bank had charged me severe penalties for it. It was the first bounced check that I had ever received in my life, and I wasn’t happy about it.
A completely naïve, young entrepreneur, I assumed that everyone who wrote a check had money in the bank to cover the amount. Apparently, I came from Pleasantville, the imaginary place where everything is perfect and everyone’s word, or check in this case, is bond. The business world is nowhere near the utopian Pleasantville. No, there will always be people in business who try to take advantage of you, and that’s exactly what these rogue restaurant owners did.
I shared my experience and frustration with my mentor. I told him that I wasn’t so upset about the check bouncing as much as the owners probably knowing that they wrote a bad check. In his nonchalant tone, he admonished me, saying, “Simple solution: If you suspect that someone has given you a bad check, take that check to the bank written on the check and ask if there are sufficient funds in the account. A bank teller will tell you that information. If there is, you can cash the check right then and there.” I was surprised to learn this. His solution would totally eliminate the risk associated with submitting a questionable check to my bank, which would charge me if the check was indeed bad. From that point on, I did just that for suspicious customers, and it has saved me similar trouble. I also learned that it is against the law to write bad checks.
I don’t recall if I ever got my $321. I think I did after going to the customer’s bank repeatedly until the funds were available. Regardless, I learned a valuable lesson that shapes my company’s policy to this day: A check in hand means nothing. In other words, don’t count your money until it’s in the bank—and in there for a while.
When you receive a new purchase order, a check, a verbal agreement, or a written agreement from a customer wanting to buy your product or service, don’t get too happy and excited. Save the celebration until you have cold cash in hand or the funds are verified.
