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First let me explain what money orders are just for those who don’t know yet.
A money order is a guaranteed form of payment between two parties (persons) for a specific amount of money for a service or product. It is more like a cheque, but in this case it must be prepaid.
For someone to obtain a money order they must first pay the required amount to the bank or any financial service agency that offers the service and then they will obtain the order document.
So rather than having money removed or withdrawn from your account when someone cashes a cheque that you issued, in this case of money order the money has already been prepaid by you, so the cash in your account will not be tampered with.
After purchasing the person can then give it to the other party or person that they want to make payment to and the receiver can then exchange the order document for a deposit into their own bank account.
This system has been around since the 18th century, so it is nothing new and it was developed because of the high fees in the banking system and this system of making payment or transferring money was liked by many because it helps reduce the issues of theft.
What is required to fill out a money order form?
To fill out the money order form you will need to provide:
- Recipient’s name
- Your address
- Dollar amount being paid
- Cash or a debit card you intend to make the payment from
Note: Some money transfer agents or services may require that you state your reason for purchase of the money order (this is meant to help curb fraudulent activities), while some may not require that from you.
How to fill out a money order
- Write the name of the payee
- Fill out the information of the purchaser/sender/remitter (your personal details as the one sending the money)
- Sign the Money order document (make sure to sign the front and leave the back for the receiver to sign when they collect the cash)
- Keep your own half of the receipt (this will serve as proof of purchase in case if document gets lost or something else happens and can also it can be used for money order tracking)
Where can I get a money order?
If you are asking – where are money orders sold? the truth is that there are many service providers that can issue money orders, but one of the most popular issuer is Western Union and you can also get it from banks, post offices or even Walmart.
Also read: Which Payment Processor Is the Best for Me?
The Money order document is usually not purchasable online, so you have to go in person to get it.
Where can I cash money order?
You can cash your money order at the bank or by having the money deposited into your bank account directly or you can also cash it at many big retail stores. They could charge you extra bucks for cashing it though, so be prepared to pay for the charges.
Can money orders expire?
No, It really does not expire, however in some cases if the money order is not cashed within three years from the date of purchase, there is a likely chance of incurring a non-refundable charge that will be deducted from the original amount when you want to cash it.
Advantages of using a money order
If you are wondering – why money order instead of cash? the thing is that it has numerous advantages that makes it appealing for use, and this includes :
- Send money securely: The money order document is designed in such a way that it does not include bank account number and so it can not be accessed or used by anyone else except the recipient who it was intended for. So you don’t have to worry about exposing your account details at all.
- Does not require a Checking account: With the money order you don’t even need to have a checking account to be able to take advantage of a money order unlike other methods of moving cash.
- It can be used internationally: Although it is not available in all countries of the world, but it has a wide reach, you just have to confirm if it works in your country
- No Bouncing: Unlike cheques, money orders are prepaid already so they can’t be bounced at the point of collection for insufficient funds.
How to cancel money orders and get your cash back
In case you are wondering “can money order be cancelled?” the answer is yes.
There are many reasons why you might want to cancel your money order and get back your money and this could be as a result of a lost money order, stolen money order or some other reasons.
To cancel your money order, all you need to do is to contact the same issuer where you bought it and provide the necessary details for cancellation and also attach a copy of the receipt that you received upon purchase (second half I mentioned earlier) and submit.
Although some issuers do not require that you make your submission in person as you can simply email or fax your request to their office and they will have it resolved, some of them may, either way be ready to do what is required including paying a money order cancellation fee.
Can money order be refunded?
The answer is yes! it can and the process is just as the one explained above when you want to cancel an order document.
Disadvantages of money order
The system is very simple to initiate and therefore easy to forge and so it is prone to been used for money laundry because any one can easily have access to it, and that is why over the years a lot of legislations have been put in place by the government to regulate the process.
Alternatives to money order
Over the years with advancement in technology and globalization, many other systems have been invented to make the system faster, safer and cheaper.
This includes PaidByCash, Konbini (Japan) and also the Mastercard and Visa card credit systems.
NB: If you have any question you will like to be answered, please ask them on the forum I and others will try to help you.