Money orders are very useful for paying money to landlords and utilities, especially if someone does not have a bank account.
However, there can be some downsides in accepting them, and you should be aware of any risks you could face from potential fraudsters.
What Is A Money Order?
A money order is basically a paper check that isn’t connected with a singular bank account.
To get one, a purchaser gives the money order issuer (you can pick these up at local shops, convenience stores, or grocery stores) the amount of cash that they want to send plus a small fee.
In return, they get a money order slip they can fill out themselves and give to a recipient – usually recipients such as landlords, utility providers, or other merchants.
Those that only accept cash or checks will typically accept money orders as well.
A money order is an instrument of payment issued by the United States Postal Service (USPS) for use in making payments to vendors and other recipients.
The USPS issues money orders as cashless instruments, meaning that they can be used without the need for any form of bank account or credit card.
They are also negotiable payments, which means that they can be transferred from one person to another.
Money orders can be sent through the mail or delivered at post offices, banks, and many retail stores.
If you have a money order, it may seem like a great way to make sure your bills get paid on time.
However, there are some things about money orders that you should know before using them.
A money order is a safe way to pay for things online without having to use a credit card.
These paper documents offer cash, but unlike a check from a bank, they’re prepaid and aren’t tied into a bank account. Here’s everything you should know about them.
How Do I Use A Money Order?
A money order is prepaid, meaning that it doesn’t require a signature in the same way that a check would.
You can also deposit it to any bank account of your choosing, making it more flexible than a check.
To purchase a money order, visit a local branch office of the US Post Office or go online.
When purchasing a money order, you’ll select the amount you want to send, then choose whether you’d like it mailed or delivered.
To ensure that your money order arrives quickly, you can opt to have it shipped via First Class Mail or Priority Mail. The postage rate will vary depending on what service you choose.
What Are Some Things That Can Go Wrong With A Money Order?
While most people think of money orders as being safe and reliable, there are some risks involved with sending them.
For example, if someone steals your money order, they could use it to buy something expensive.
Also, if your money order gets lost or stolen while in transit, you won’t be able to recover it.
If you do lose your money order, contact the US Post Office immediately so that they can help find it. In addition, you can file a claim with the USPS insurance company.
This will cover the cost of replacing your missing money order.
If you are a business, and you accept a money order through the post for a purchase, be aware of potential money order scams and cons.
Most money order scams involve sending you (the target) a bogus money order for a purchase or other transaction, convincing you to deposit the funds into your checking account, and having you take further action before the scam is discovered.
If a forged money order is good enough, it could take several days before your bank or credit union discovers the fraud.
To take advantage of that lag time, criminals often try to create a feeling of urgency to speed up their shady transactions.
Some scammers play on people’s sympathies by pretending they need money for an urgent medical situation.
Some people use intimidation to get their way by demanding an immediate refund on something they claim is in an unacceptable condition.
Some people claim they need to act fast to save a kidnapped person or other wild claims that can make you fear for someone’s safety.
If you go along with this money order scammer’s demands, the best outcome for you will be a loss of merchandise and a loss of whatever money you sent over.
The worst case scenario is that your bank gives access to the rest of that money order, and you lose the whole amount.
When a crime is uncovered, the institution will take back the money immediately, and if you have spent any of the money, you will likely have to pay banking fees, risk bounced checks, and face a slight reduction to your credit score for having insufficient funds.
Is It Safe To Send Money Orders Through the Mail?
Yes! Sending money orders through the mail is just as safe as sending checks.
Your money order will arrive safely and securely, and the recipient will receive their funds within 3-5 business days.
Can A Money Order Bounce?
A real money order cannot bounce. This is because in order to get a money order, you have to directly give over cash to get one.
HOWEVER- fake money orders can be made, which will bounce once they are discovered to be fraudulent.
The Bottom Line
A fake money order will eventually bounce, so if you cash one into your account, be sure to wait until all of the funds have cleared before you begin spending any money.
A real money order cannot bounce, as it is the equivalent of cold, hard cash.
If you are sending a money order, it can take a few days for the recipient to be able to access the money, so if you are using it to pay a bill or something of that nature, be sure to send your money order in good time so that your bills are paid on time.
As money orders are subject to fraud, be very careful to let all funds clear before you send off an item or complete a job for someone if they are using a money order as a form of payment.
Financial Disclaimer
This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.
The investing information provided on this page is for educational purposes only. compundingstacks.com does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks or securities.
The owner(s) of this blog is compensated to provide opinion on products, services, websites, and other topics. The owner(s) may be compensated if you click on a provided link and purchase or sign up for a service. Any product claim or advice about a product or service should be verified with the manufacturer, provider, or party in question. Copyright Compounding Stacks © 2022
Everyone wants to make more money - but how many people actually put the time and effort into researching how to do this? Not many. The fact that you are here on my website right now proves that you are one of the few who actually has what it takes to invest their money correctly to get the most back.
- Is Coinbase Safe For Beginners? - March 25, 2022
- Are Penny Stocks Good For Beginners? - March 25, 2022
- Why You Shouldn’t Save Your Money In A Bank? - March 25, 2022