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Money orders are safe means of payment that are handy in situations where you want to stay anonymous. This payment type is much like a personal check; however, a money order is more convenient if you do not wish to provide personal data (address, account number). Money orders are also different from personal checks in that the funds for purchasing a money order are paid immediately. For each money order purchase, you pay the issuer the amount you want to transfer plus the fees.
How Do Money Orders Work?
Money orders are available in little sums. So, suppose you want to mail up an amount of more than $1000. In that case, you will have to buy several money orders, Be aware that money order is not a free payment type, and for each purchase, you should pay fees that may range from 0,6 to 10 dollars depending on the issuer and the amount of the money order. The processing of these payment tools consists of several steps.
- Go to the nearest place where money orders are available. You should have cash at hand or a debit card to pay for the purchase.
- Fill out the money order form. You will need to provide your and the payee's names and sign the money order. Then, double-check for accuracy and get your money order.
- Keep the receipt to track your money order. The receipt contains a tracking number that you can use to verify that the money order got to the intended recipient.
Once you receive the money order, you can cash it at your bank or any other place that issues money orders or deposit it into your bank account. However, be prepared to pay some fees for cashing the money order. However, USPS (United States Postal Services) can cash your money order for free.
Where to Buy Money Orders & How Much Do They Cost?
You can purchase a money order from banks and other places, including grocery and convenience stores, pharmacies, postal offices, payday lending offices. Nevertheless, you’d better review all the ins and outs of each money order issuer and purchase them only after ensuring they meet your needs.
Lending Institutions (Banks, Credit Unions, Payday Loan Offices) and Money Transfer Companies
Going to your bank might be good if you have a bank account and want to purchase a money order. Money orders issued by banks usually have a fee of $5 to $10 for each purchase. Money transfer giants such as Moneygram and Western Union also provide money orders.
USPS (Postal Offices)
Postal offices are also good places to purchase money orders. But before heading to the post office, you should be prepared to stay in long queues waiting for your turn to make a transaction. USPS is well-known for its low costs and safety. The fees range from $1.5 for amounts up to $500 and $2 for payments that are more than $500.
Supermarkets, Pharmacies, Convenience Stores
Customers may purchase money orders at various stores. However, you'll usually have to go to the customer service department to get one. According to financial experts, retail stores are among the best places for money orders. The fees may vary from store to store; however, they are low compared to the banks; for instance, Walmart's highest cost is one dollar.
Why Buy a Money Order?
At first sight, it may seem that there is no place for money orders in the digital world; however, there are cases when they come in handy. Here is when:
1. You don’t want to share your account data
Money orders are an excellent way to keep your banking information anonymous. You can easily send money to a friend, relative, or others across the country and overseas without providing your bank credentials.
2. You don’t have a bank account
In-advance payment of money orders allows buying them without a checking account. Thus, they may provide payment options for unbanked individuals.
3. You don’t want to carry cash
Some people may be hesitant to carry cash while making large transactions. At the same time, money orders can be a simple way to pay for items on marketplaces.
4. Want to send the payment through the mail
Money orders may also be sent through the mail, making this payment method particularly tempting for customers. Cash received in the mail may be stolen; however, a money order may be sent with confidence (it does not contain any banking information).
If you lose your money order, it’s not a reason for concern; you don’t lose your funds. You may replace it by going back to the issuer. Be aware that you may be required to pay a charge for the money order replacement. However, a small fee is preferable to losing money entirely.
Beware of Money Order Scams!
Along with the popularity of these financial products, they are also very vulnerable as scammers often take advantage of the unawareness of money order users. The con-artists can deceive you in a variety of ways. In many cases, the latter sends the victims fake money orders, persuading them to deposit the cash into their accounts and send some of it back to the buyer. In another scenario, the buyer may send you a fake money order to buy products, and until the seller discovers the fraud, the scammer has already acquired the needed product. The scams often do their blackmail quickly, not leaving the victim time to understand the fraud.
Nevertheless, be aware that in the case of having doubts about the legitimacy of the money order you receive, you can take the following actions:
- Verify it by contacting the issuer of the money order (bank, Western Union, Moneygram, or USPS offices.)
- Seek security elements such as watermarks.
- Check that your name is written in the recipient line and that the amount is not tampered with or twice printed.