Wal-Mart expands check-cashing service

In a nation with 17.7 million "unbanked" adults -- and likely more since banks began raising checking account fees -- Wal-Mart sees a golden opportunity.

The mega-retailer announced this week that it will cash more types of preprinted checks, including those for 401k's, student loans and rebates. A Wal-Mart store is definitely preferable to those check-cashing places with bulletproof glass and large, percentage-based fees -- if there's a Wal-Mart in your neighborhood and you can get out the door without filling a cart with useless stuff.

Here's the upside for Wal-Mart, according to the Sun Sentinel in Florida:

It can draw in more check-cashing customers who can spend at its stores. It can encourage those customers to load cash onto its prepaid cards, which can be used at its stores and elsewhere. And it can earn fees when customers use the prepaid cards.

The check-cashing fee at Wal-Mart is only $3 for checks up to $1,000, and it's twice that for checks up to $5,000. If you load that money on a Walmart MoneyCard, the reload fee is waived, Wal-Mart says. Wal-Mart will also continue to offer its bill pay and money transfer services. Post continues after recent video about another Wal-Mart service.

Specifically, here's what's being offered as of this week:

• More types of checks. Now, in addition to payroll and government checks, including tax refunds, Wal-Mart will cash preprinted checks for rebates, student loans, insurance, pensions, 401k's and other types of retirement checks. Note that personal checks are not included.
• Cards, down to the penny. Wal-Mart will cash payroll and some government benefit cards, and give the exact amount, including the change. It says it's the first major retailer to do that, rather than sticking to $10 or $20 increments.
• More forms of ID accepted. In addition to driver's licenses and military and tribal IDs, Wal-Mart now accepts passports and state ID cards.
• Check-cashing lanes. At more than 650 stores, some checkout lanes will be designated check- and card-cashing only, generally on Friday afternoons and on the first and 15th day of each month, when many people get their checks.

Check cashing isn't available at Wal-Marts in New Jersey, New York and Rhode Island because of state laws.

According to the FDIC, in 2009 about 17.7 million people were unbanked -- having no savings or checking account -- and another 43 million U.S. adults were "underbanked" -- having a checking or savings account but also using other non-bank services like money orders, check-cashing services, and payday loans.

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