A travellers' cheque are the equivalent to cash but are more secure in that the person using them will be refunded if they are stolen. The have a value in the currency they were issued.
Travellers' cheques are issued by financial institutions such as Banks, Building and Saving Societies, Post Offices etc. and by some travel agents.
People use travellers' cheques rather than carry around large quantities of cash because of the reduce security risk.
a normal crossed blank cheque
The Diagram below shows what needs to filled in on a normal cheque:
These are the main features of a Travellers' cheque:
In some cases cheques are printed by the register and returned to the customer for signature.
In most cases to accept a Travellers' cheque the customer must produce a passport. This will show the identity and signature of the customer.
An authorised Travellers' cheque in local currency is treated as cash, if it is in a foreign currency then an exchange transaction must occur. Change is only given in local currency.
An unauthorised Travellers' cheque is one which has been sign only once at issue, in otherwise the space for countersignature is empty.
Suggested procedure for taking a travellers' cheque as payment in local currency :
If the travellers' Cheque is in a foreign Currency and the policy of the establishment is to accept these then you need to carry out a currency exchange transaction to the value of the check
There are risks involved in any form of payments: cheques are no exception.These can be minimised by:
Checking the identity of the drawer
Checking the cheques are genuine
Following the procedures for accepting travellers' cheques
If the Travellers' cheque is suspect or the customer identity is in doubt:
1. Retain the Travellers' cheque and ID document
2. Inform your supervisor
3. Tactfully inform the customer or if fraud is suspected contact the police attempting to detain the client without arousing suspicion.