How do check cashing businesses work?
Check cashing businesses profit by charging a fee, usually expressed as a percentage of the check amount, for cashing checks for customers. This fee can vary based on the type of check (governmental, payroll, personal) and even the time of day you go to the store, but is generally around 5% of the check amount. In addition, many consumers use these outlets to purchase money orders with which to pay bills. These money orders can cost $2-3 dollars each to purchase. These fees can add up in a hurry, and represent a significant portion of a low-income consumer’s budget.
