Travelers checks are safer than cash. But the burden of making them safer is on you. The agreement you sign when you buy the checks must be followed to the letter -- or you could forfeit any refund if they're lost or stolen.

Two little-known conditions jeopardized the refund of one traveler to Spain who was robbed of American Express travelers checks amounting to $750.

The traveler reported the theft as required, and received a routine refund. But six weeks later, American Express requested reimbursement of the refund, claiming that he hadn't signed the checks in the upper left-hand corner at the time of purchase -- a basic condition of the sales agreement.

Copies of the stolen checks showed that the signature in the corner was signed by someone else -- and that signature matched the countersignature provided when the checks were cashed. Therefore, the company claimed the condition of signing the checks when purchased had not been met.

The traveler countered that he had in fact signed the checks in the bank on purchase. Fortunately for him, the bank teller remembered the transaction. A closer look at the copies of the stolen checks showed traces of the original signature under the signature of the person who had cashed them.

American Express persisted in their demand to have the refund returned, this time claiming that the checks had not been signed in permanent ink -- another basic condition. But the traveler had signed the checks with a permanent-ink pen -- the one provided by the bank.

After three months of correspondence, American Express finally agreed that the traveler had met all conditions in the purchase agreement and withdrew its demand for a refund.

The traveler's problems point out the potential pitfalls you might encounter if you fail to read the fine print in the purchase agreements of travelers checks.

The companies that issue the checks impose the requirements to prevent fraud, not to withhold refunds if checks are lost or stolen. But they do make sure that all requirements of the purchase agreement have been met before issuing a refund.

For instance, BankAmerica, Citicorp, and Thomas Cook require you to sign the checks at the time of purchase. Although American Express doesn't specify signature at the time of purchase, it does stress the importance of doing so.

None of these companies allows a refund unless the check is signed -- and in the proper place. American Express and Thomas Cook require signatures in permanent ink -- only -- so be careful about signing with an erasable ball point.

Countersign a check only when you're cashing it or buying something. And, sign it only when the person accepting it is watching. Countersigned checks won't be refunded.

Safeguard your travelers checks. American Express and Thomas Cook require that you hold onto the checks yourself.

Record the serial numbers of your checks with the place and date of purchase; you'll need this information in case of loss. Make two copies of this document. Leave the original at home and keep one copy with you -- but separate from your checks. You might also give the second copy to a traveling companion, or leave it in the hotel safe. Record when and where you use each check.

Report lost checks to the police and get a copy of the police report to help document the loss. (Incidentally, you can't stop payment on a travelers check.)

1987, Consumers Union