As an alternative to a credit or debit card, cashier's check or cash, a money order is a safe form of payment when you're buying something from a stranger or paying a bill. Unlike with a personal check, when you pay using a money order, the other person knows the funds are guaranteed.
MoneyGram explains that money orders do not expire. However, dormancy laws can necessitate needing the money order reissued, or a service fee could apply after a certain time frame. Therefore, it's important to know where to cash a money order as soon as you discover you've forgotten about it.
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How Money Orders Work
Whether you buy your money order from a check-cashing store, the United States Postal Service, a financial institution or Walmart, you'll often pay a small processing fee for the service. For example, USPS charges anywhere from 55 cents to $1.65 for domestic money orders. Depending on the issuer, you may use cash, a bank account or a debit card to buy the money order. However, you usually can't pay with a credit card.
You can then fill out the money order with the payee's name, your address, any memos (like an account number) and your signature. Before giving the completed money order to the recipient in person or through the mail, be sure you're not dealing with scams.
Money Order Expiration and Fees
Western Union says you won't encounter an expiration date on money orders. However, dormancy laws can result in a money order being considered unclaimed property by the state after a certain number of years.
For example, the California State Controller mentions a seven-year deadline for cashing a money order before you'd need to have it reissued. The National Association of Unclaimed Property Administrators shows that your state's deadline could be shorter than this and depends on the type of money order issuer (bank or nonbank) too.
In addition, some services deduct from the value of the money order if it isn't used by a designated number of months or years. A bank or credit union money order generally doesn't have this stipulation, but you'll want to check with the branch anyway. A USPS money order doesn't have this service fee either. However, issuers such as Western Union and MoneyGram include information on such charges on the back of the money order.
Where to Cash Money Orders
No matter when a money order is issued, you should use it as soon as possible. If you're wondering what to do with a money order, the best place to take it is your own bank, where you can either deposit it or depending on the bank's rules, turn it into cash. This is the place you're least likely to pay a fee for cashing it unless the issuing service requires that a fee be deducted.
If you need the cash immediately, your best course of action is to head straight to the issuing business. For example, USPS says you can take postal money orders to your local post office for free cashing. However, not every place that issues money orders cashes them, so you may have to rely on other locations to get the payment.
These options include grocery stores, convenience stores and payday loan places. Check the fees before you go, though, since some places charge flat fees, while others charge based on the money order amount. In addition, Kroger and other cashing locations may ask for an ID and possibly your Social Security number, so bring these with you.
Replacing Lost Money Orders
Cornell Law School mentions that one reason many people use money orders to mail payments is that they can be tracked if they're lost. That doesn't mean you won't pay a fee for the service, however. If you've lost a money order, the first thing to do is get in touch with the issuer and let them know. Whether it's a bank money order or one from another service, the issuer can cancel it and get the money back minus a fee.
The fee for canceling a lost money order or getting a money order refund varies from one place to another. USPS charges $13.90, while Western Union charges $15 if you have your receipt and $30 if you don't. If it's a bank money order, you may find the fee is slightly lower as a service to members.
- USPS: Sending Money Orders
- Western Union: Do Money Orders Have an Expiration Date?
- MoneyGram: Money Orders
- California State Controller: Consumer Information
- National Association of Unclaimed Property Administrators: Property Type—Non-Bank Money Orders
- USPS: Money Orders - The Basics
- Kroger: Money Orders
- Cornell Law School: Money Order
- Western Union: Money Order Customer Request