As a business owner, I accept checks all the time and out of hundreds a few do bounce. I can send the check writer a certified letter to demand payment plus a fee (current charge is $20.00). If no response within a specified period of time (usually 10 days from post) a copy of the certified letter and the check is turned over to the county attorney and they handle it from there.
However, in my case the person has the merchandise and I have a worthless check. In your case, since it was for the deposit and they didnt actually have the "goods" (puppy) that probably wouldnt apply. Did you have a contract stating non-refundable deposit?
Since these people didnt know you, they may have felt they would be out the $500.00 if they didnt stop payment on the check regardless of the circumstances.
I agree a courtesy phone call to let you know their circumstances had changed would have been a better way for them to go.
I dont have any puppies to sell but if I ever do, I would accept checks as payment along with a contract. If I couldnt trust them to be good for the money, I wouldnt want to trust them to care for the puppy anyway.
I agree with others who said to talk to your bank. It is possible that given the circumstances they will waive their usual fees as banks dont want to lose any customers these days either.
