We previously determined the cost to process Business-to-Consumer (B2C) checks averages $7 per check issued. The cost to replace those checks, by outsourcing them to a prepaid debit card provider, is free. Escheatment laws are very different when prepaid cards are issued rather than checks. That is one of many reasons banks can issue prepaid debit cards for utilities at no cost. The average B2C utility refund check is approximately $150. Utilities should be focused on saving $7 for every $150 check they no longer process and utilize free prepaid debit cards instead. Funds are usually available to the consumer faster with prepaid debit cards than with checks.
Most utilities continue to issue checks for security deposit refunds (especially when customers relocate), for energy efficiency rebate programs to promote desired consumer behaviors, and for other customer incentive programs that require a disbursement from the utility to the customer. Virtually all other businesses, excluding utilities, now issue prepaid debit cards versus checks when it makes sense.
CAPE consults with utilities to lower internal payment costs as well as reducing convenience fees assessed to utility customers. CAPE does not provide prepaid debit cards. CAPE consults with your utility to find the best prepaid debit card provider that meets your specific needs.
Utilities issue checks to 4% and 8% of their customers annually. Cost savings available to utilities are both significant and easy to attain. The conversion from checks to prepaid debit cards normally takes a total of six weeks.
Why wait to make such a fast/simple/meaningful cost reduction?