According to the FDIC's 2017 National Survey of Unbanked and Underbanked Households, 6.5 percent (8.4 million) of U.S. households had no savings or checking accounts. Since it isn't always possible to pay bills, pay rent and make other purchases with cash, it becomes necessary for those households to utilize another payment method. Money orders are an excellent option, as they are widely accepted and easy to mail to an intended recipient. If you accept a postal money order from a friend, family member or customer, you'll find it is fairly easy to cash.
Verify the Money Order
It's good practice to give the money order a once over before trying to cash it. First, the United States Post Office (USPS) only issues domestic money orders in amounts up to $1,000 and international money orders of no more than $700. Second, if you hold the money order up to the light, you should see the following: a watermark of Benjamin Franklin that is printed on the left side multiple times from the top to the bottom, a dark line running from top to bottom with the word “USPS” listed over and over and dollar amounts that are not discolored in any way. If, after examining the money order, you still aren't sure of its authenticity, you can call the U.S. Postal Service Money Order Verification System at 866-459-7822.
Visit an Approved Facility
Unfortunately, not all establishments are willing to cash money orders. Your local post office and most banks and credit unions are able to cash them, but you'll need to call ahead if you plan to take the money order anywhere else. A few common facilities that will take your money remittance and turn it into cash include convenience stores, grocery stores, big department stores like Walmart and check cashing places. There are also international sites, like the India Post Western Union, that you can use if you're currently traveling abroad.
Sign the Back
After you find and visit the establishment that accepts money orders, you'll need to sign the back of the money order, just like you would a check. If you're depositing the money order into your bank account, you can simply write "For Deposit Only" on the back and write your bank account number underneath.
Present Proper Identification
The employee who is ready to cash your money order will first need to see your identification. It is his job to ensure that you are the recipient named on the front of the money order. A passport book or card, a valid driver's license or a state or military ID are your best options. The employee may not accept identification that doesn't have both your picture and signature listed on it.
Replacing a Money Order
If you are expecting a money order, but it fails to appear in your mailbox in a reasonable amount of time, it may have been lost or stolen. Your local post office can help you with this. You'll need to fill out PS Form 6401 "Money Order Inquiry." The form requires the money order's assigned serial number, date, amount and the issuing post office number, all of which you can find on the original receipt. Since you are the recipient of the money order, you'll need to contact the purchaser for this information.
When submitting Form 6401, you'll also need to present a $5.95 processing fee. The post office will then add the money order's serial number to their missing money order list. This list is designed to prevent fraud in the event that your money order was stolen. After the post office verifies the status of your money order, they will mail you a replacement.
- USPS: Domestic Money Orders
- USPS: Verifying U.S. Postal Service Money Orders
- Reference: How Do You Cash a Postal Money Order?
- FDIC: 2017 FDIC National Survey of Unbanked and Underbanked Households
- United States Postal Service. "Sending Money Orders." Accessed May 10, 2020.
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- Western Union. "Western Union and Meijer Ink Deal to Continue Longstanding Relationship." Accessed April 17, 2020.
Alicia Bodine is a New Jersey-based writer specializing in finance. With more than 13 years of experience, her work has appeared in LendingTree, GoBankingRates, Sapling, Zacks and budgeting.thenest.com.