Postal Laws on Sending Money in the Mail

The U.S. Postal Service offers methods of protection for customers sending money through the mail. And although it is widely believed that it is illegal to mail cash, this is not true, people frequently mail cards with cash gifts in them for birthdays and holidays. The law only prohibits certain activities involving money, usually where fraud or gambling is concerned. Violations involving the U.S. Postal Service are federal offenses that will subject you to fines or jail time, depending on the severity of the crime.

You are automatically insured up to $100 if you use the Priority Express Mail option, even if you do not purchase insurance. Domestic insurance covers losses up to $5,000 and Registered Mail with insurance covers losses up to $25,000. You must declare the full value of your package, even if the insurance limits are not sufficient to cover the entire amount. When filing a claim for loss reimbursement, you will need to present evidence of the package's value. Check with the post office before mailing the money to verify that your proof of value will be acceptable if you need to file a claim later. Make sure your packaging is secure to reduce the chance of tampering or accidental loss of the cash.

If you mail money as part of a dishonest scheme, you may be prosecuted under the federal mail fraud law. The law covers any intentional activity that is designed to defraud another party through the mail. The mailed items are not required to carry any misrepresentation or falsifications themselves if they can be linked to a larger plan with fraudulent intent. Federal mail fraud laws apply to private carriers such as UPS and Federal Express because they carry parcels across state lines. Many states also have their own laws against mail fraud.

The same federal law prohibits the use of the postal system for chain letters and foreign lotteries. A chain letter is any mass mailing promising monetary payment if the recipient continues the chain by forwarding the letter to several friends or family members. Even though the number of recipients grows exponentially in this Ponzi scheme, only the first few mailers have a chance to earn any money. Only state-operated lotteries may send lottery tickets or related materials through the mail. An individual may not mail money to purchase tickets or shares in a foreign lottery. This law is designed to protect postal customers from foreign scams that target U.S. addresses.

While it is not illegal to mail money, it is still not a good idea to send large amounts of cash this way. Cash may easily be destroyed, lost or stolen before reaching the recipient. You will have no recourse for a loss if you did not purchase insurance prior to sending the package. It is better to send a check or money order because you can stop payment and recover your funds. If you absolutely must send cash, conceal it with paper so the envelope does not attract thieves.