A Paper Comeback?

  Financial institutions over the years have done a good job converting billions of transactions once made via costly paper checks to electronic ones initiated with debit cards or automated clearinghouse funds transfers.
  Checks, however, continue to show resiliency. Even financial institutions are having difficulty making the switch.
  Evidence of this came to light recently when I redeemed cash-back points from my Chase Freedom credit card account. I don’t mean to single Chase out here, but it’s where I bank, and it issues my credit card. I’m sure other issuers have similar redemption policies.
  With my Chase card, the bank provides 1% to 3% cash back on my purchase amounts. I had accrued enough, $200, to get the $50 bonus Chase offers, so I decided to cash in.
  I had read in Chase promotions that participants in the program receive their redemptions by “check.” But I thought Chase simply assumed that promotional materials were not the place to cite “ACH funds transfers” as an option to have redeemed funds automatically transferred to customers’ checking accounts.
  Turns out, though, that Chase doesn’t offer the ACH option. Participants may obtain their cash-back rewards only via a check.
  What irony. Chase, which has killed off millions of check transactions through its debit and credit card programs, is itself stuck issuing paper for its credit card rewards program.
  A customer-service representative in Chase’s credit card department told me by phone that Chase issues checks to produce a paper audit trail. Apparently the bank had some problems before with ACH funds transfers, but the representative couldn’t elaborate.
  A Chase spokesperson later told me that “it’s easier and faster to issue a check.” She said Chase has no plans to enable customers to provide MICR information from a personal check to allow redeemed funds to be deposited directly into their checking accounts.
  I was surprised at how fast my check arrived. I put in my redemption request on a Saturday and received the check in the mail four days later.
  But my experience redeeming cash-back rewards also suggests that the industry has a ways to go before checks go the way of vinyl record albums.
  A segment on CBS News Sunday Morning on Feb. 10 suggested vinyl records are making a comeback.
  Could it be an omen?
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