Business Overpayment Refund Scam via Cashier's Check
A 'customer' sends a small business a cashier's check for more than the agreed amount, then asks for the difference back before the bank discovers the check is fake.
Part of: Business Overpayment / Refund Scam
Last reviewed: 5 July 2026
Cashier's checks have earned their reputation as 'as good as cash,' and most are exactly that, which is precisely why this scam relies on one. A supposed customer or new hire sends a check for more than what is owed, blames a clerical mix-up, and asks the business to deposit it and refund the difference. Because banks must make provisional funds available quickly, the balance looks real when the refund goes out. The distinction that matters most is that 'funds available' is not the same as 'check verified': once the counterfeit surfaces the deposit is reversed, and the refund is gone.
How this scam works on cashier's check
A scammer poses as a customer, client, or new hire and sends a business a cashier's check for significantly more than what's owed, then explains the overpayment was accidental or covers an additional expense like shipping or a 'consultant fee,' asking the business to deposit the check and wire or send back the difference. Because banks often make provisional funds from a cashier's check available within a day or two, the business believes the money has cleared and sends the refund.
Days or weeks later, the bank discovers the original cashier's check was counterfeit or drawn on a closed or fraudulent account, reverses the provisional credit, and the business is left having sent real money to the scammer while now also owing the bank for the reversed deposit. This scam frequently targets businesses expecting legitimate payments, such as freelancers, contractors, or online sellers, since a check for 'too much' can be mistaken for a simple client error rather than fraud.
Common red flags
- A payment arrives for noticeably more than the invoiced or agreed amount
- The payer asks for the difference to be refunded via wire transfer or gift card before the check has fully cleared
- The explanation for the overpayment is vague or involves a third party (a 'shipping agent' or 'consultant')
- Pressure to send the refund quickly, before you'd naturally verify the check has cleared
- The check is a cashier's check or money order from an unfamiliar or out-of-state bank
- The customer relationship is new or was only established shortly before the overpayment
How to protect yourself
- Wait for a cashier's check to fully clear (confirmed by your bank, not just provisionally available) before refunding any amount
- Call the issuing bank directly using a number you look up independently to verify the check is genuine
- Be suspicious of any customer who overpays and asks for a refund of the difference
- Never send a refund via wire transfer or gift card for an overpayment
- Set a business policy requiring any overpayment to be handled only after full check clearance and manager review
- Train staff who handle payments to flag overpayment refund requests for verification before acting
How to report it
- Report the scam to the FTC at reportfraud.ftc.gov
- Report the counterfeit check to the issuing bank listed on the check
- File a complaint with the FBI's Internet Crime Complaint Center (IC3.gov)
- Report to your bank's fraud department to flag the deposited check
Frequently asked questions
How long does it actually take for a cashier's check to be confirmed genuine, not just provisionally available?
Full verification can take anywhere from several days to a few weeks depending on the issuing bank's own investigation process, which is far longer than the one-to-two-day provisional availability most banks offer. Never treat provisional availability as confirmation the check is real.
Can my bank tell me over the phone whether a specific cashier's check is legitimate?
Calling the bank listed on the check, using a phone number you look up independently rather than one printed on the check itself, is one of the more reliable ways to ask whether that specific check was actually issued. It's still worth waiting for full clearance before acting on the funds either way.
Why do scammers specifically target businesses with this overpayment pattern rather than individuals?
Businesses regularly receive payments from new or unfamiliar clients, so an overpayment doesn't stand out the way it might in a personal transaction, and owners are often eager to resolve billing 'errors' quickly to maintain the relationship. That routine trust in payment processing is exactly what the scam exploits.
Why does my bank make funds from a cashier's check available before it's actually verified?
Banking regulations require provisional availability of funds within a short window even for cashier's checks, but that availability doesn't mean the check has been confirmed genuine, which can take much longer to detect if it's counterfeit.
What should I do if I've already refunded an overpayment and the check bounced?
Contact your bank immediately to report the fraud, file a report with the FTC and IC3.gov, and understand that recovering funds already sent to the scammer is unlikely, though reporting helps investigations and may assist other victims.