The U.S. Postal money order program began during the Civil War as a way for soldiers to send home money without the fear of cash being stolen in the mail. With modern checks, debit cards and electronic payment methods consuming the vast majority of transactions, many forget the benefits of money orders, especially among the less fortunate. While they cost money, they do still serve a purpose.
Modern postal money orders are designed to prevent fraud with a Ben Franklin watermark and a security thread much like money utilizes to strongly deter counterfeiting. Penalties of up to 10 years in jail and a $25,000 fine can be incurred for making or using counterfeit postal money orders. These features should make you comfortable using and accepting them for payment.
Safe to Mail
Mailing money orders is safe. Save your receipt, and if the money order does not make it to the desired location, call the phone number on the receipt to report its loss. Return to the location that you purchased to arrange a replacement. There will be a small convenience fee for this, much like a stop payment fee for a check. International money orders are also available to a limited number of countries.
Simply endorse the money order at your bank to deposit or cash it. Most retailers will also accept money orders for payment, and many will cash money orders for free or for a small convenience fee. If it is a USPS money order, you can cash it at the post office for no fee since the fee was paid when it was purchased. If these are not options, check cashing services will cash the money order for a larger fee, often with identification required.
Easy to Acquire
You can purchase money orders at any post office or bank. Many grocery stores now sell them at their customer service counters. Other money service companies such as Western Union often sell them at tourist locations and other convenient areas. Typically small fees are charged for purchasing money orders, but the benefits generally justify this small expense.
- Stetson University: An Empirical Analysis of the Use of Money Orders, the Payment System of the Poor
- Postal Museum: The United States Post Office Domestic Postal Money Order System
- Cornell University: Money orders
- United States Post Office: Money Order Security Features
- United States Post Office: International Money Orders