A money order is a traceable means for an individual to pay for products and services. The usage of money orders is similar to check-writing. However, it does not require an individual to have a checking account. Depending upon who is cashing the money order, a signature may or may not be required.
Although the purchaser isn't required to sign the money order, the recipient will need to do so in order to access the funds.
Recipient of the Money Order
When a money order is purchased, the purchaser should complete the "payable to" field. Other fields that must be completed include the purchaser's name and address. When the money order recipient receives the money order, he is required to sign the back. In order for the recipient to cash the money order, his name must be written in the "payable to" field. If the name of an organization or agency is written in the "payable to" field, the individual endorsing the money order may be required to provide proof of affiliation with the organization.
Purchaser of the Money Order
Occasionally, the individual who purchases the money order has to return the money order for a refund. For instance, the individual may purchase the money order, only to discover that he no longer needs it. There are several ways for the purchaser to cash the money order. Firstly, he can take the money order back to the merchant it was purchased from. The purchaser can present his receipt for the money order and request a refund. If the "payable to" field includes a name other than the purchaser's name, the purchaser should write "not used for purpose intended" on the back of the money order. He can then endorse the back of the money order and cash it. If the "payable to" field is blank, the purchaser can simply write his name in the field and endorse the back of the money order to cash it.
Wire Transfer Money Orders
Whenever wire transfers are submitted to an individual through companies, such as Western Union or MoneyGram, the recipient receives the wire transfer in the form of a money order. Before the wire transfer recipient can receive the wire transfer funds, he must sign the printed money order. Once endorsed, the wire transfer company will provide the individual with cash from the wire transfer.
In order to cash a money order, most agencies require a valid photo identification from the individual attempting to cash the check. However, there are a few third-party check-cashing agencies that will cash the money order without requiring identification. When cashing a money order through a third-party check-cashing agency, an individual will often be charged a cashing fee. This money order cashing fee is generally a percentage of the total money order amount.