What Is a Stop Payment?

Consumers have various tools for making payments today, including checks, recurring debit card transactions and ACH payments.

But what happens if, after making a payment, you don’t want it to go through? In some cases, a stop payment may be required.

Learn more about this important feature available to bank customers, how it works, and what to consider when using it.

What Is a Stop Payment and How Does it Work?

Once a payment has been made, such as a check received or an ACH bill payment approved, the money doesn't transfer to the payee immediately. During that time, it's still possible to issue a stop payment order.

Definition of a Stop Payment Order

A stop payment order is a request made by the payer to the bank on which the payment has been made. It can be done while the payment is still outstanding or hasn’t been completely processed. It’s commonly used for checks and authorization for automatic bill payments from a checking account.

Understanding the Basics of Stop Payment

How does a stop payment happen? The payer can contact their credit union or bank and ask for one. They must verify some information to confirm which payment they want to be stopped. If the payment hasn't already gone through, a flag will be added to that payment, alerting any bank from cashing it.

The stop payment doesn’t last forever, though. Depending on the bank, it can be in place for up to six months^[1]. The order can often be renewed for checks to keep them from being cashed later.

Reasons to Issue a Stop Payment

There are legitimate reasons for wanting to stop a payment. These include the following:

• The check was made out for the wrong amount, to the wrong person, or for the wrong date.
• The check was mailed to the wrong payment address.
• The payment is no longer warranted due to a canceled contract for services.
• The check was stolen.
• The check was lost or damaged.
• The check was written as part of a fraud scheme or a scam.

Another reason might be an accounting error. If the payer thought, in error, there was enough money in the account to cover the payment, a stop payment order on the check may help avoid serious overdraft consequences.

Whatever the reason, act quickly. Payment can only be stopped while it’s still pending. Once the payee cashes the check or accepts the payment, it’s too late to take action.

How to Issue a Stop Payment Order

Typically, it's not possible to issue a stop payment through a bank's online account access or mobile app. The bank needs to assist in putting the order in place.

The payer should check that the payment hasn’t cleared yet. The online account will note if it has been processed. As stated earlier, the sooner the stop payment order is initiated, the better.

The bank will ask for basic information about the payment, including a check number (if a check was used), the amount, the date, and the account number from which it is being paid. Proof of identity may be required as well. Stopping an ACH payment or recurring debit card transaction will have a similar process.

Working With the Payee

After the bank has put in the stop payment order that check or payment should not go through. 

So, what happens with the payee? If the payee is not notified about the stop payment order and try to cash the check, it will come up as void. The resulting confusion could cause problems when it comes to their accounting. Reaching out to the payee and explaining what happened can help avoid confusion. At the same time, another method of payment should be arranged.

After Issuing a Stop Payment: Next Steps

Stopping a payment may keep it from going through, but it's important to make things right with the payee. If there’s an agreement in place to pay someone as part of a contract, your obligation to fulfill your portion of that contract doesn't go away. If the payment was for a service or a loan, the company that is owed the money could charge late fees or other charges.

It's also possible that not letting a payment go through could affect the payer's credit. If you don't replace the stopped payment and 30 days pass, your missed payment could potentially be reported to the credit bureaus. Promptly following up with another payment is the best way to avoid this issue.

In any instance where a stop payment request is issued, the payee can:

• Continue monitoring the account to make sure payment doesn't go through.
• Look for alternative methods of payment (if necessary).
• Stay in contact with the bank about questions or concerns about fees.

Understanding Stop Payment Fees

Many banks charge a fee for each stop payment request they get. This fee varies by bank. Ask what your bank or credit union will charge. It’s also possible to receive a fee waiver for stop payment requests for stolen blank checks.

Limitations

Stopping payments works in many situations, but it's not a perfect solution for all issues. Stop payments can't be requested for a money order or cashier's check because the money has already been taken for payment. Once these payments have been made, they can rarely be reversed.

Scenarios Where Payments Might Still Go Through

A stop payment request will not work if the check has already been deposited or cashed or the electronic payment has been processed. This is because a stop payment is for outstanding payments only, so a payer has a limited amount of time to request it.

Also, since stop payment orders expire, it’s possible for a check to be deposited at a later date and go through. This is a less likely scenario, especially since checks typically expire at a certain point anyway. However, if a stop payment order only lasts a few months, and the bank’s checks don’t expire for a year, there’s a significant period of time to cover. If so, renewing the stop payment request may be the only way to solve this problem.

In some cases, an ACH payment from a subscription may go through, as well, but the bank can help in resolving any fees that come as a result^[2].

What to Do if a Stopped Payment Is Mistakenly Paid

Occasionally, a bank or retailer may cash a check with a stop order on it by accident. In this case, the institution cashing the check may be required to pay back any fees. Talk to the issuing bank about the available options.

Alternatives to Stop Payment Orders

Stopping a payment from processing can happen in other ways, such as contacting the payee and revoking payment authorization for automatic payments. Inform the bank so they can be alerted to any payment attempts.

Communicating concerns ahead of the payment date can also reduce frustration. If a payer is unsatisfied with a service or product, contacting the payee may resolve the problem. There may be a suitable agreement that may allow a reduction in payment or no payment at all.

In some cases, it may be best to let the payment be processed after all, especially if the fees for stop payment and late or returned payment fees from the payee will be high. It’s worth weighing all the options to see what’s best in each unique situation. The bank may help determine the best course of action.

Preventative Measures to Minimize the Need for Stop Payments

In a perfect world, no one would request a stop payment order. Sometimes, the need for a stop payment can be prevented by following these best practices:

• Pay close attention when writing checks and ensure you have the right amount, date, payee, and memo line information before sending it out.
• Mail payments to the right address and use a secure mailing method for large payments (certified mail, etc.).
• Talk to payees ahead of time about any concerns you have.
• Keep your checkbook in a secure location only accessible to you. Report any lost or stolen checks immediately to the bank and law enforcement.
• Practice good bookkeeping methods and document every payment you make from both electronic and check payments. Keep track of active subscriptions and recurring payments. 

Consider leaving a cushion of cash in your accounts to cover any accidental overdrafts or miscalculations in your bookkeeping.

Moving to electronic, real-time payments for bills or paying back friends and family members is another option. These automatically update in your account transactions list, which keeps the balance current. This way, tracking payments and avoiding overdrawing an account becomes more manageable.

The Bottom Line on a Stop Payment Request

If choosing a stop payment, be aware of bank fees for both the payer and the payee. It doesn't get either out of obligations to lenders or service providers, but it can help avoid some consequences of theft, fraud, and bookkeeping mistakes.

Whether stopping payment on checks or an electronic payment, consider following up with the bank and the payee. In many cases, it's entirely preventable with some communication and planning.

Get additional information on how to handle money, including checks and debit cards, in our money resource center.