Financial transactions move our world. There are reasons why, as well as reasons why not, to turn to money orders as a means of conducting business. As in any monetary exchange, use money orders to your advantage, and avoid using them when they could pose a risk.
Money orders are safe substitutes and an alternative to writing checks. If you lose a secured money order, you can have it replaced free. If you lose a check you've already sent, you'll have no way to track it unless (or until) someone cashes it or if you cancel it.
You will want to:
1. Purchase money orders from a reliable source.
2. Avoid becoming a victim of fraud by accepting a counterfeit money order.
3. Plan to use money orders for transactions that are less than $1,000 U.S. dollars, or $700 for international money orders.
Buy money orders from a reputable sourceA U.S. Postal Money Order is a secure transaction because the money orders circulate through the Federal Reserve Bank. You can buy money orders up to $1,000 for only $1.50. You have the flexibility of purchasing money orders for military personnel or international money orders.
Use acceptable forms of money order paymentTo purchase a money order, use cash, traveler's check or a debit/ATM card. If you are cashing money orders, present it to a bank or post office. If cashing a U.S. Postal Money Order, a route carrier can accept and cash the money order as well.
U.S. Postal Money Orders from a route carrier for convenience, or locate a Family Express center near you.
State your money order terms up frontIf you conduct business where you don't want to rely on accepting personal checks, inform your purchaser that you only accept money orders from reputable sources. Don't accept any form of paper that you receive as a bona fide source of capital.
Safeguard money order transactions through the mailPaper substitutes for money serve various purposes. Money orders, unlike traveler's checks or business and personal checks, can simplify the exchange of goods and services for money.
- You can cash and purchase money orders at a post office, but you can also purchase and cash a money order through a mail carrier.
- The Federal Reserve Bank will track your money order, and will replace lost or stolen money orders for a small fee.
- You can purchase bona fide money orders from some banks, Western Union, some convenience stores such as 7-11 and Wal-Mart.
- Due to Bank Secrecy Act regulations, some banks no longer accept certain money orders. Before you accept money orders as a form of payment for your business, make certain that your bank will accept them.