Yes, your customer may request a reissued cashier’s check after presenting a declaration of loss for the original cashier’s check. However, this approach carries some risk for your customer, as the declaration of loss will not become effective until 90 days have passed from the date of the original cashier’s check.

The Uniform Commercial Code (UCC) permits the remitter of a cashier’s check to submit a declaration of loss (the content of which is fully described in the UCC). As stated in the Official Comments to the UCC, this provision is intended to “offer a person who loses such a check a means of getting refund of the amount of the check within a reasonable period of time without the expense of posting a bond and with full protection of the obligated bank.” In most cases, the UCC will protect your bank from double liability in the event that the original cashier’s check resurfaces.

This approach does not fully protect your customer, however. Because the declaration of loss will not become effective until 90 days from the date of the original cashier’s check, your bank would need to pay the original cashier’s check if it is presented within that 90 days (or else your bank likely would be liable for wrongful dishonor), as well as the reissued cashier’s check. Consequently, your bank could end up paying the amount of the check twice, after which it would need to seek reimbursement from your customer for the double payment.

It also may be possible for your customer to pursue other remedies with UPS. In any event, if your customer chooses to submit a declaration of loss and request a reissued cashier’s check, the risk of loss for your bank is low.

For resources related to our guidance, please see:

• Uniform Commercial Code, 810 ILCS 5/3-312(b) (“A claimant may assert a claim to the amount of a check by a communication to the obligated bank describing the check with reasonable certainty and requesting payment of the amount of the check, if (i) the claimant is the drawer or payee of a certified check or the remitter or payee of a cashier’s check or teller’s check, (ii) the communication contains or is accompanied by a declaration of loss of the claimant with respect to the check, (iii) the communication is received at a time and in a manner affording the bank a reasonable time to act on it before the check is paid, and (iv) the claimant provides reasonable identification if requested by the obligated bank. Delivery of a declaration of loss is a warranty of the truth of the statements made in the declaration. . . .”)

• Uniform Commercial Code, 810 ILCS 5/3-312(b) (“If a claim is asserted in compliance with this subsection, the following rules apply: (1) The claim becomes enforceable at the later of (i) the time the claim is asserted, or (ii) the 90th day following the date of the check, in the case of a cashier’s check or teller’s check, or the 90th day following the date of the acceptance, in the case of a certified check. (2) Until the claim becomes enforceable, it has no legal effect and the obligated bank may pay the check or, in the case of a teller’s check, may permit the drawee to pay the check. Payment to a person entitled to enforce the check discharges all liability of the obligated bank with respect to the check. (3) If the claim becomes enforceable before the check is presented for payment, the obligated bank is not obliged to pay the check. (4) When the claim becomes enforceable, the obligated bank becomes obliged to pay the amount of the check to the claimant if payment of the check has not been made to a person entitled to enforce the check. Subject to Section 4-302(a)(1), payment to the claimant discharges all liability of the obligated bank with respect to the check.”)

• Uniform Commercial Code, Official Comment 4 to Section 4-403 (“A cashier’s check or teller’s check purchased by a customer whose account is debited in payment for the check is not a check drawn on the customer’s account within the meaning of subsection (a) [the section on a customer’s right to stop payment]; hence, a customer purchasing a cashier’s check or teller’s check has no right to stop payment of such a check under subsection (a).”)