The other day I went to deposit a check at Chase and cash a small check I had received. The teller asked me if I was able to get "direct deposit" through my employer and when I said it wasn't feasible, he informed me that after 10/26 any NON-Chase checks will not be cashed. They will have to be deposited, and the funds will be available the following day. Yes, even tiny rebate checks for $1.99
Keep this in mind, rebates offering those prepaid cards may be a better option after October for Chase customers...
BTW, the teller said that other banks are already doing this, and that they were just getting on board with it. I never heard of such a thing before!!!

Personally, I'm surprised cashing checks is still allowed at all, given how easy it would be for a scammer to push a bogus check and walk away with cash, leaving the bank to eat the cost.

That said, it seems like there should be some sensible threshold, like checks over $200 must be deposited. Does Chase require you to have a bank account with them to cash a check? I know a couple banks around here do - which somewhat mitigates their risk.

But since they usually require you to have an account with them to cash a check, is there really that much risk? (Assuming the check is for less money than there is in your account, anyway)

Yeah, that's the part I don't understand, unless it's to avoid kiting or similar type scams.

My bank will typically cash most checks, especially if there is enough in the account to cover it (which is rarely an issue). The day that changes, I will find another bank. They do occasionally place a hold on very large checks from other banks (such as five-figure checks), but this is reasonable. Requiring deposit of and placing holds on $1.99 rebate checks when there is money in the account is not reasonable in my opinion.