When a money order is stolen, the payer or payee must file paperwork with the issuer to track the current status of the order. If the money order has not been cashed within a set period of time, the provider offers reimbursement with a check or by issuing a new money order.
TL;DR (Too Long; Didn't Read)
In the event someone steals your money order, you'll need to file the appropriate forms with the issuing institution. You may also need to contact the authorities.
Fill Out the Appropriate Forms
The process of recovering funds used to purchase a money order that was later stolen begins with filing the appropriate forms with the issuing institution. The United States Postal Service (USPS), Western Union and MoneyGram begin an inquiry process when you submit paperwork containing all pertinent information about the money order. Information such as your name and address, the intended recipient's name and address and, when possible, the original receipt for the money order. In most instances, this inquiry process takes 30 to 60 days and lets the issuer verify whether or not the money order has been cashed.
Include the Fees
When you file forms to trace or recover a stolen money order, issuers charge a fee that pays for running the searches and the costs of remitting a refund or forwarding a copy of a cashed money order. These costs vary in range. As of October 2018, USPS charges $5.95 for the process while Western Union requires $15 if you can send in your receipt and $30 if the receipt is not available. MoneyGram charges $18 for a claim card refund process and $22 to expedite the cashed order to your address within two business days of the request's receipt.
Pick Up Your Refund
If your money order was stolen or lost, and not yet cashed when the issuer concludes the investigation process, a refund is issued. The USPS allows for picking up a refund, in the form of a postal money order you can address to yourself and cash immediately, at any post office. Western Union and MoneyGram mail refunds after an inquiry concludes.
Take Additional Measures When Necessary
If your money order was fraudulently cashed by a person who was not the intended recipient, obtaining a refund becomes more difficult. None of the issuers guarantee refunds for money orders reported stolen and cashed though they may be issued in select situations. For example, USPS pursues banks that clear money orders without proper verification of identity and can receive reimbursement from the bank for an issued refund. However, if your money order was stolen while still blank, the thief can make it out to themselves and provide identification to cash it. In a situation like this, take the copy of the cashed money order the issuer sends you and file a police report. If the police can't help you recover your money, consider filing a case in small claims court.