A bounced check is the everyday name for a cheque that the paying bank returns unpaid because the writer's account does not hold enough available money, a condition known in banking as non-sufficient funds (NSF). The main entry explains how NSF returns happen, the fees involved and how they differ from an overdraft.
The word and the bookkeeping
The cheque is said to bounce because it travels to the paying bank and comes straight back to the depositor's bank marked unpaid. Banks themselves usually describe it as a returned item or returned payment, with a reason such as NSF or uncollected funds. The term is mainly American; in British English the cheque is said to have been dishonoured or returned "refer to drawer".
For the business that received the cheque, a bounce undoes a payment it thought it had collected. The amount is usually charged back against its account, often with a returned-item fee. When preparing a bank reconciliation, the bookkeeper deducts the NSF cheque from the book balance of cash and restores the amount to accounts receivable, since the customer still owes the money.
The writer of the cheque may face an NSF fee or an overdraft fee from their own bank. Deliberately writing cheques against an account known to lack funds can be a criminal offence in many places.