Check fraud is a serious problem for institutions and banks must weigh customer service against loss prevention when accepting checks. I sold an item to a friend who paid me for it with a check from Y Bank. When I visited Y Bank to get my money, they charged me a fee to cash the check. Banks may also establish different rules and fees for customers and non-customers, or among an institution's various customers. Z Bank refused to cash my paycheck - and I work for one of the biggest companies in town.
Banks can refuse to cash a check , even a check that is issued by the government.
The bank gives out cash immediately, but it may not receive offsetting credit for the cashed check for a day or more. Banks are generally willing to do this for their own customers' convenience. Cashing a check for a non-customer, who may be a total stranger, exposes a bank to risk. If the check is stolen or fraudulent, the bank may never see the non-customer again. State law imposes a criminal penalty for passing a bad check, which ranges from a misdemeanor to a Class D felony, depending upon the amount of the check.