What is a restrictive endorsement stamp?


Quick Answer

According to accounting website AccountingTools, restrictive endorsement stamps are used to restrict further action regarding a financial instrument, usually a check. This is done so that the check or other instrument is no longer a negotiable and cannot be passed from the stated payee to a third party.

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What is a restrictive endorsement stamp?
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Full Answer

As stated on AccountingTools, an example of a restrictive endorsement is the "for deposit only" stamp used by most companies on the back of a check. This stamp effectively limits action on the check by the stated payee to depositing the check in their bank account. These stamps are mostly used by businesses.

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