Stamp out bad checks: put an end to forgery by knowing what to spot.

Derek Burris has been in business some 31 years as owner of the Los Angeles-based, Burris Ace Hardware. One of the reasons for his success is that he's a cautious businessman. For example, he always takes precautions against bad checks, a smart move since about 37% of his company's transactions are done by personal check. For the last 10 years he has used TeleCheck. For the 50 cents or so you pay per check, "it's worth it, Burris says, "even if only 15% of your business is done by check. If a check turns out not to be good, TeleCheck will refund me. The $5 I lose on bounced check fees from the bank is minor, especially if the check amount is large." Burris also makes sure the address on the check matches the person's driver's license. "Also, I don't accept checks with P.O. boxes," he notes.

According to Barbara Hurst, editor of the Bankers Hotline newsletter, experts estimate that businesses lose $10-$12 billion a year from check fraud. Compare this with the $68 million lost to theft and robbery.

John Hall of the American Bankers Association in Washington says you can spot suspect checks by asking yourself these questions:

* Does the check have an improper federal routing number when checked against the city and state where the financial institution is located. The transit and routing number has nine digits and always has the stop symbol at the beginning and end.

* Is the check number on the wrong side of the transit and routing numbers? There has to be enough space available in the far right to encode the amount of the check when it is negotiated. Personal check numbers almost never go above four digits. They'll appear at the top of the check and to the right of the financial institution's nine-digit transit number and routing number. The actual check numbers will always be on the left side.

* Is the address of the issuing bank complete with city and state?

* Is the customer in a hurry, distracted, talking too fast, complaining about slow service or overly friendly? They may be trying to pass a bad check.

* Are the borders on the check even? They should be, and there should always be one serrated edge on the check.

* Is there a bank or corporate logo, and is it crisp and dear?

* Is the check number low? If so, verify. "We find 60% of all fraud happens the first two weeks after an account is opened," says Hurst.

A large percentage of fraudulent checks are passed during the weekend, when it's harder to verify them with a bank. Get as much information from the customer as possible. If you think you're safe with certified or bank-issued checks, think again. "The latest fad is to make copies of checks that look like they're certified or bank issued," says Hurst. Verify them as you would a personal check.

Always keep records of fraud; it'll be easier to catch the next time. Anyone who handles transactions should be able to access this fraud record. Consider using negative check file databases, available from companies such as TeleCheck (713-599-7600), ETC (206483-2500) and Equifax (404-885-8000).