Bank of America phasing out check guarantee cards

Wednesday, Sept. 9, 1998 | 11:09 a.m.

Bank of America, Nevada's largest bank, is phasing out check guarantee cards.

The Versatel Check Card will be phased out over the next three years as San Francisco-based B of A gears up to merge with NationsBank, a Charlotte, N.C., company that doesn't offer customers guarantee cards.

B of A Nevada officials say the decision was reached after national studies showing increased interest in debit cards and less in check-writing by customers.

"We are keenly aware that many merchants today do not require or even ask to see a check guarantee card when cashing a check," said B of A Nevada Area Executive George Smith. "With the increase in debit card usage, along with more merchants having access to state-of-the-art check verification systems, the need for a check guarantee card has become outdated and is no longer necessary in today's age of electronic transactions."

Wells Fargo Bank came to the same conclusion about two years ago and ended First Interstate Bank's check guarantee cards when it acquired First Interstate.

Customers criticized Wells Fargo for taking away what they and many merchants thought was a crucial program.

Wells Fargo is now merging with Norwest Bank, which does offer check guarantee cards. No decision has been announced on whether the combined bank will have check guarantee cards.

The Wells Fargo-First Interstate controversy, meantime, may have cleared the way for B of A to eliminate its card with less controversy. A sampling of retailers at Meadows Mall on Tuesday found mixed feelings toward B of A's check guarantee card.

"I don't even honor check guarantee cards anymore," said Richard Burge, manager of The Game Keeper. "Most customers have a debit card and I love it. I'd like to see paper check-writing become obsolete."

"I always took it, but most of our regular customers show us a driver's license," said MaryLou Wigmore, assistant manager of Perfect Fit Shoes.

"Losing that program isn't going to make much of a difference to us," added Sharon Bryan, owner of Lemstone Books.

But another mall merchant said the card plays an important role in her customers' daily transactions.

"We use them all the time," said Shirley Mlynarczyk, owner of Wicks 'n Sticks. "We usually have six to eight checks a year returned, so it's important for a small business like ours.

Mlynarczyk said the cost of getting a check verification terminal at her four small stores wouldn't be worth the investment.

But B of A hopes to make the cost of getting the proper equipment appealing. The bank will charge a one-time $100 fee for a check verification system that doubles as a debit machine. Monthly costs are $25, but B of A plans to offer six months of the service for free.

Customers also will get a break. The $1 monthly usage fee for a debit card ends today.

The gradual phase-out of the guarantee card system will occur as about 230,000 customers' cards expire.

B of A officials believe they will be successful where Wells Fargo erred by being more up front with customers and merchants about the program. Wells' own analysis of the matter determined that customers were upset by a lack of communication on the program when it was rolled out.