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.
Action Steps
The best contacts and resources to help you get it done
Buy money orders from a reputable source
A 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.
I recommend: Purchase United States Postal Service money orders through the local post office or another convenient source such as
MoneyGram Financial.
Use acceptable forms of money order payment
To 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.
I recommend: Cash
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 front
If 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.
I recommend: Read a sample of
specific language so that you can add money order language to your website that includes what form of payment you accept. Do not make exceptions.
Safeguard money order transactions through the mail
Paper 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.
I recommend: Buy
money orders from AuctionMoneyOrders.com to mail monetary gifts or purchases. If you lose a personal check in the mail, the bank will charge you a fee to stop the payment. If you receive an authentic money order, you don’t have to worry about securing the funds. All you have to do is cash it and enjoy.
Tips & Tactics
Helpful advice for making the most of this Guide
- 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.
The official source of Money Orders is the Money Orders page at Business.com
Related Resources from Business.com
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