CONSOLIDATED RETURNS

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CONSOLIDATED RETURNS
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CONSOLIDATED RETURNS

• What is it?
• Provident Banks Consolidated Returns Service
  is an effective method of consolidating NBDSs
  Merchants returned checks into one bank, even if
  the merchant has multiple depository banks and
  bank accounts nationwide. As a result of this
  consolidation, the merchant receives consistent
  information on all returns in one complete file
  or report, increasing their control over the
  collection process.
• The Consolidated Returns service requires the
  use of a Special Endorsement on each deposited
  check at the Merchants depository bank.
  Provident provides the Special Endorsement (see
  example on pages 16 or 24) or works with the
  Merchants data processing department or software
  vendor to develop the proper endorsement via from
  their point-of-sale equipment.

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Consolidated Returns (contd.)

• With the endorsement showing Provident as the
  bank of first deposit due to the Special
  Endorsement, drawee banks will return all unpaid
  checks to Provident versus the actual bank of
  first deposit. Once Provident receives the
  returned checks we will send them to Merchant or
  the Merchants collection agency, which can then
  electronically represent any eligible item for a
  second and a third presentment. This electronic
  re-presentment can also be timed to debit the
  customers account on Friday, which is often
  their payday, providing a better chance for
  collection. If the electronic re-presentment is
  returned a third time, Provident can send the
  returned item directly to the Merchant or their
  check collection agency.
• With Providents Consolidated Returns service,
  the Merchant will receive complete and timely
  information on returned checks allowing them to
  expedite the collection process and lower their
  costs.

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Some Names You May Recognize

• You may know some of the companies that utilize
  this service

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EXAMPLE SPECIAL ENDORSEMENT
Provident DDA
Retail Location
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Endorsement Instructions

• The endorsement is a critical piece to the
  process. It must be clear and easy to read. It
  should be located in the second 1½ of the check
  as shown below (normal size 2½ X 6 personal
  check).
• In order for Provident to receive the largest
  percentage of return items, please follow these
  endorsement tips
• 1. Make the endorsement large and bold
  (especially the routing number)banks will
  utilize this number to determine where to send
  the return items. In many instances there will
  be multiple numbers on the back of the check.
  The more pronounced the Provident Bank
  endorsement, the greater the probability that
  banks will return the items to Provident.
• 2. Stamp checks consistentlyit is very important
  that the Provident Bank endorsement be on the
  second 1½ of the back of the check. When hand
  stamping the endorsement on the checks, be sure
  to place the stamp on the same location for all
  checks. Consistency will make it easier for
  banks to determine where to send the items.
• Continued gtgtgtgtgtgtgtgtgtgt

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Endorsement Instructions - Continued

• 3. Make sure that the stamp is easily
  readable. Banks will be viewing the endorsement
  to determine where to return the check. If the
  endorsement has smeared or the print (or stamp)
  is light, other banks may inadvertently return
  the check to the incorrect bank. Therefore, make
  sure that the endorsement is clear and that there
  is sufficient ink in the stamp.
• 4. Appoint a contact within your organization
  for this new service. Make sure that your
  stores/company know how to get in touch with this
  contact, who will be responsible for
  troubleshooting any endorsement problems, such
  as
• Lost stamp
• Ink stock-out
• Any other problems
• Having a contact will prevent your locations from
  not addressing these problems,which can decrease
  the percentage of return items received by
  Provident. Also, Provident Bank can communicate
  any issues that we notice while processing the
  checks to this contact.
• Continued gtgtgtgtgtgtgtgtgtgt

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Endorsement Instructions - Continued

• Whats Next?
• Before beginning this service, it is suggested
  that the Merchant contact their bank(s) and
  inform them that they are working with Provident
  Bank for Consolidated Returns (see Sample Letter
  to Local Bank(s) - next page). The Merchant
  should ask their bank(s) to perform the following
  functions
• Do not endorse the checks as Bank of First
  Deposit (BOFD)the arrows
• (gt lt) surrounding the routing number denote the
  bank owning that number as BOFD.
• Ask them to Endorse checks as subsequent
  processing bank remove the arrows from the
  outside of the routing number
• The volume of your return items received by
  Provident will increase if your bank(s) agree to
  no longer endorse themselves as the Bank of First
  Deposit (BOFD).

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Sample Letter to Local Bank(s)

• Effective ______Date_____, Company Name has
  instituted a company wide initiative to begin
  consolidating our returned checks with Provident
  Bank. This change will affect all Company Name .
  
• Prior to depositing our checks with you, we will
  imprint Provident Bank's endorsement in the
  appropriate Reg. CC area of the check. To help
  us ensure the integrity of our consolidated check
  return system we are requesting that you turn off
  your endorsement on our items, if possible. If
  any of our checks are returned to you, please
  re-qualify (re-route) them on the day of receipt.
  Re-qualifying can be accomplished by affixing an
  encoding strip or inserting the check into a
  document carrier and encoding a 2 in position
  44 of the MICR line along with routing symbols
  and the Routing and Transit numbers for Provident
  Bank in the standard Routing and Transit field of
  the MICR line. Provident Bank's Routing and
  Transit number is 242071583.
• We realize that Consolidated Returns is a new
  concept and we know that many other retailers
  have successfully implemented this process. As a
  valued depository bank for us, we need your
  cooperation in the workflow process. Under no
  circumstance are you to put through a return
  check charge on our account, all items are to be
  re-qualified as instructed.
• Again, we value our relationship with your
  financial institution and we cannot stress enough
  how important it is for you to follow the above
  instructions. We appreciate your cooperation and
  look forward to our continued banking
  relationship. Should you have any questions or
  need clarification, please contact our banking
  relationship coordinator directly.
• Sincerely,

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CONSOLIDATED RETURNS FLOWCHART
CONSOLIDATED RETURNS SM
Consumer
Merchant processes check with a Special Returned
Item Endorsement (Provident Bank is Bank of First
Deposit)
Check written for merchandise by consumer
Drawee Bank denies payment and returns check to
Provident
Checks are deposited at merchants local bank
Local bank presents check for collection
If payment is denied, item or electronic
re-presentment is returned to Provident Bank and
charged to Merchants Account and the agency is
notified electronically
Provident Bank debits the Merchants Account
sends the check to Merchant or the Merchants
collection agency to start the collection process
and electronically represents the check for
collection via the Automated Clearing House.
If requested by merchant, check is forwarded to
Xpress Checks or the Companys collection service.
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Consolidated Returns Features

• The Features of Provident Bank's Consolidated
  Returns Service
• Allows your Merchants stores to continue
  depositing checks to their local banks
• Allows Provident to receive and act on the
  returned checks of our Merchants the first time
  they are returned by the drawee (paying) bank,
  reducing additional fees
• Accelerates the return process since checks are
  returned by the Federal Reserve Bank to us and
  we overnight these items to the Merchant or their
  collection agency versus being mailed to them or
  their collection agency from the local banks
• Offers better control for returned checks at
  the headquarter level
• Interaction with Driscoll/UAR/GlobeSet or
  Chesapeake account reconciliation software for
  charge back purposes at the store level

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Consolidated Returns Benefits

• The Benefits of Provident Bank's Consolidated
  Returns Service
• Provides your Merchant with the ability to have
  a higher rate of collection and
• improve their current Returned Check
  Expense
• Consolidation of returned checks at one bank
• Consistency of the Merchants returned check
  fee(s)
• Reduction in overall returned check fees
• Improved cash flow
• Option of a second and third presentment
  performed through RCK class code
• Opportunity to clear two additional times
  electronically
• Timing of the second/third presentment

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We Want Your Business!

• Thank you for this Opportunity!!!!!