O'Reilly's Henslee said people who intentionally write bad checks in his stores typically want quick cash. Bad checks are usually written on the most expensive items that are easily refundable. They buy the expensive item with a bad check and attempt to get a refund from another store in the chain. For that reason O'ReilIy has a policy not to refund money for items purchased with checks for at least 10 days. This gives the check time to clear.
Bad checks are a rampant problem.
As a result of the company's desire to reduce losses due to check fraud, O'Reilly added check reading devices in most of its 260 stores. Some lower volume stores don't have readers, but sales team members can manually access check authorization equipment. The company recently purchased the Hi-Lo Automotive, which has check readers in its 190 stores. Louis E. Struett, executive vice president with Mag-Tek, a Carson, CA, company that manufactures check readers, said large retailers such as Walmart and Target were the first to use such systems because they receive a high volume of checks each year. The check reader technology has begun to trickle down to other industries, including auto parts and service.