Ok ok call me a total noobie in the financial world. I understand I am stupid for not knowing things like Money orders, but hey, I dont do those, my parents do em. So can someone tell me how a money order is sent, how its used, etc? I already know about paypal so Im not THAT stupid right?
Can someone teach me about things like MOs?
- Thread starter Mags
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drizzle
Enlightened
IMO you aren't stupid at all. It's more of a generational thing. My parents are as ignorant of Paypal as you are of Money Orders.
I have bought and used MO's and can give you a basic idea. It is a bit like a guaranteed check. The idea is, you pay a bank or other trusted agency (like US Postal Service, Western Union or American Express) in cash to buy the MO which is designated to be paid to someone. Then that person or business can cash the MO.
Because you paid cash for it there is no question of whether funds are available so, in the old days, it was considered to be a more secure way to send payment than a personal check. That is, more secure for the one receiving the MO since he doesn't have to worry about whether there are funds to cover the MO as he would have to if you sent a personal check.
I have bought and used MO's and can give you a basic idea. It is a bit like a guaranteed check. The idea is, you pay a bank or other trusted agency (like US Postal Service, Western Union or American Express) in cash to buy the MO which is designated to be paid to someone. Then that person or business can cash the MO.
Because you paid cash for it there is no question of whether funds are available so, in the old days, it was considered to be a more secure way to send payment than a personal check. That is, more secure for the one receiving the MO since he doesn't have to worry about whether there are funds to cover the MO as he would have to if you sent a personal check.
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Mags said:
So its a more safe, mailable check?
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Yep, there usually are fees involved.
Mags said:
So its a more safe, mailable check?
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Yep, there usually are fees involved.
drizzle
Enlightened
[ QUOTE ]
Mags said:Are Money orders obtainable by minors? (like me)
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Good question. I don't know. I would suggest calling your bank to find out, or wherever you intend to buy it. Then you can find out the fee too. It seems to me it's usually a couple dollars or so.
A couple other things. There are maximum limits to the dollar amount of a MO. A bank can also issue a Cashier's check, which works the same as a MO. I don't remember exactly but I think the cashier's check usually had higher fees but could be made out for an amount higher than the MO limit.
Mags said:Are Money orders obtainable by minors? (like me)
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Good question. I don't know. I would suggest calling your bank to find out, or wherever you intend to buy it. Then you can find out the fee too. It seems to me it's usually a couple dollars or so.
A couple other things. There are maximum limits to the dollar amount of a MO. A bank can also issue a Cashier's check, which works the same as a MO. I don't remember exactly but I think the cashier's check usually had higher fees but could be made out for an amount higher than the MO limit.
greenLED
Flashaholic
you can buy MO at the post office (extra fees depend on the value of the MO, but usually they're less than $1, at least the one's I've bought); cashier's checks usually have higher fees. I don't know about minors buying MO's, though. If you have the cash+fee, I don't see how that would make a difference. Checks are a different story 'cuz you need a bank account, etc.
I know of no law prohibiting a minor from acquiring/using a money order. If you have an account at a bank I am sure they would issue one with a small fee. I think the main reason people want money orders is because it is the closest to cash you can get without an intermediary intercepting and stealing the funds, thus it protects the interests of both parties involved. Sending cash can be a risk if the company you are dealing with has a dishonest employee in it or by very small chance a dishonest postman sees through the envelope a few dead presidents...
gadget_lover
Flashaholic
One of the nice things about an MO is that you don't always need a bank account to cash one.
A good choice is to use the post office. You can buy the MO there for a buck (under some amount) and put it in the envelope and mail it all at the same time.
No ID is needed to buy an MO. Only 1 form of id is needed to cash a postal MO at the post office. The post office will also cash postal MO's (issued by the post office) at no cost.
Money orders used to be considered good as cash, but modern copy machines and scanners have made counterfeiting practical. I prefer to receive a MO from the post office since they can authenticate it before I send whatever the MO paid for.
Banks can be picky about MOs. They may decide to treat it as an out of town check, holding the funds for some period of time. They may also deduct the money from your account if the MO turns out to be stolen or forged or otherwise invalid. They have been known to charge large fees in such cases.
Daniel
A good choice is to use the post office. You can buy the MO there for a buck (under some amount) and put it in the envelope and mail it all at the same time.
No ID is needed to buy an MO. Only 1 form of id is needed to cash a postal MO at the post office. The post office will also cash postal MO's (issued by the post office) at no cost.
Money orders used to be considered good as cash, but modern copy machines and scanners have made counterfeiting practical. I prefer to receive a MO from the post office since they can authenticate it before I send whatever the MO paid for.
Banks can be picky about MOs. They may decide to treat it as an out of town check, holding the funds for some period of time. They may also deduct the money from your account if the MO turns out to be stolen or forged or otherwise invalid. They have been known to charge large fees in such cases.
Daniel
Some of the counterfeits have been so good lately that the banks have even been fooled. Of course the banks treat it as any bad or falsified check once it bounces back to them, and the amount plus fee is deducted from the account of the one depositing or cashing it. The result is that cashing them would be difficult at a financial institute with which you don't have an established business relationship.
They're not the secure and convenient tool they used to be. Traveler's checks too have become so questionable that their use for their original intent is becoming non-existent.
They're not the secure and convenient tool they used to be. Traveler's checks too have become so questionable that their use for their original intent is becoming non-existent.
BB
Flashlight Enthusiast
And, usually, once a MO is sent, there is no stopping its being cashed on the receiving end (unlike checks and credit cards).
In all cases now--I would treat MO's and Cashier's Checks just about like real checks. Which means that the bank can comeback several weeks later and pull the money from your account if the check is fraudulent—or even sue you for recovery. There have been more and more cases of cashier's checks being forged and they are not the gold standard they used to be.
And from what little I am aware; I don't think it is easy to verify a cashier's check yourself. The only guarantee is if somebody hands you the cash directly (such as cashing it at the bank or at the Post Office it was written on).
Check Fraud
[ QUOTE ]
When a Check Clears
People are caught by surprise because (a), they think that their bank can tell whether or not a check is fake, and that's really not possible. And (b), they don't understand that they're going to be liable for the check that they deposited in their account."
The problem is that banking laws require banks to give their customers access to funds within a prescribed number of days, depending on the type of check. But access to funds is different from a check "clearing," Grant explained.
"So when you ask if it's cleared, the yes answer you're going to get is based on your right to access the funds, not on whether or not the check is good."
...
Checking it out
Bauer decided to investigate the strange offers she kept getting. So she exchanged e-mails with one "buyer" and agreed to go along with his offer of overpayment. She even got a "call" from the man, routed through a "relay operator."
And then, "One day, I go to my post office box and there's a check in the mail and it's from Africa. It has the little township on it where it had been mailed and stamped by a post office, and sent to me in the United States."
"I knew it was fraudulent — but I was still excited that possibly it wasn't."
She took the check to her local bank and asked the teller to check its authenticity. It was drawn on a bank in Green Bay, Wisconsin, she was told; a quick call to the bank's 800 number found the account number on it was valid and there were funds available.
But the teller faxed a copy of the check to the bank just to be sure. "Four hours later, they called her back and said the cashier's check was out of sequence," Bauer said. It was indeed a fake.
...
Money order fraud
The Postal Service has a task force currently collecting evidence in these cases to put together future prosecutions. The agency got involved because postal money orders have been used in the scams.
Blanchard noted post offices have equipment that can immediately identify whether a money order is valid; that's why scammers often urge victims to deposit them in their bank accounts instead. And he said the Postal Service also is redesigning its money orders to try to prevent future counterfeiting…
[/ QUOTE ]
Be really careful out there—I would give a check a minimum of 6+ weeks to "clear" before I would count on the money being permanently mine.
Basically, these folks are robbing banks, and they are leaving you holding the bag since the banks can't (or really don't care) to catch the robbers themselves when they have you, the customer, available to cover their losses based on bad and unsecured processes.
-Bill
In all cases now--I would treat MO's and Cashier's Checks just about like real checks. Which means that the bank can comeback several weeks later and pull the money from your account if the check is fraudulent—or even sue you for recovery. There have been more and more cases of cashier's checks being forged and they are not the gold standard they used to be.
And from what little I am aware; I don't think it is easy to verify a cashier's check yourself. The only guarantee is if somebody hands you the cash directly (such as cashing it at the bank or at the Post Office it was written on).
Check Fraud
[ QUOTE ]
When a Check Clears
People are caught by surprise because (a), they think that their bank can tell whether or not a check is fake, and that's really not possible. And (b), they don't understand that they're going to be liable for the check that they deposited in their account."
The problem is that banking laws require banks to give their customers access to funds within a prescribed number of days, depending on the type of check. But access to funds is different from a check "clearing," Grant explained.
"So when you ask if it's cleared, the yes answer you're going to get is based on your right to access the funds, not on whether or not the check is good."
...
Checking it out
Bauer decided to investigate the strange offers she kept getting. So she exchanged e-mails with one "buyer" and agreed to go along with his offer of overpayment. She even got a "call" from the man, routed through a "relay operator."
And then, "One day, I go to my post office box and there's a check in the mail and it's from Africa. It has the little township on it where it had been mailed and stamped by a post office, and sent to me in the United States."
"I knew it was fraudulent — but I was still excited that possibly it wasn't."
She took the check to her local bank and asked the teller to check its authenticity. It was drawn on a bank in Green Bay, Wisconsin, she was told; a quick call to the bank's 800 number found the account number on it was valid and there were funds available.
But the teller faxed a copy of the check to the bank just to be sure. "Four hours later, they called her back and said the cashier's check was out of sequence," Bauer said. It was indeed a fake.
...
Money order fraud
The Postal Service has a task force currently collecting evidence in these cases to put together future prosecutions. The agency got involved because postal money orders have been used in the scams.
Blanchard noted post offices have equipment that can immediately identify whether a money order is valid; that's why scammers often urge victims to deposit them in their bank accounts instead. And he said the Postal Service also is redesigning its money orders to try to prevent future counterfeiting…
[/ QUOTE ]
Be really careful out there—I would give a check a minimum of 6+ weeks to "clear" before I would count on the money being permanently mine.
Basically, these folks are robbing banks, and they are leaving you holding the bag since the banks can't (or really don't care) to catch the robbers themselves when they have you, the customer, available to cover their losses based on bad and unsecured processes.
-Bill
If you're going to be using an MO to buy things, the Post Ofice is probably the place to go. Very secure and very little hassle.
As others have said you pay for the MO and the cost includes the amount you want it for plus a small fee. You fill out the front of the MO with information like your name & address and the name & address of the person or company you'll be sending it to.
After that, it's handled pretty much like any other check.
How secure is the Post Office? Back in the 1950's the Smithsonian Institution was given the Hope Diamond (a very large blue diamond). Probably because of security, insurance, and federal laws governing mail theft, it was sent to them through the mail. Messing with the Post Office and the mail is a federal crime.
As others have said you pay for the MO and the cost includes the amount you want it for plus a small fee. You fill out the front of the MO with information like your name & address and the name & address of the person or company you'll be sending it to.
After that, it's handled pretty much like any other check.
How secure is the Post Office? Back in the 1950's the Smithsonian Institution was given the Hope Diamond (a very large blue diamond). Probably because of security, insurance, and federal laws governing mail theft, it was sent to them through the mail. Messing with the Post Office and the mail is a federal crime.
BB
Flashlight Enthusiast
And here is a photo of the Registered First Class package the Hope Diamond was mailed in:
Smithsonian Education Dept.
-Bill
Smithsonian Education Dept.
-Bill
Unicorn
Flashlight Enthusiast
Check your bank first if you have a checking account someplace. Usually they give money orders to their customers for very cheap or free.
Very valuable items mailed through the US Postal Service are often times escorted by the US Postal Police. They are a uniformed, federal police department having jurisdiction over the US mail, alongside the post inspectors.
Very valuable items mailed through the US Postal Service are often times escorted by the US Postal Police. They are a uniformed, federal police department having jurisdiction over the US mail, alongside the post inspectors.
MaxaBaker
Flashlight Enthusiast
I've been using MOs for almost everything to do with flashlights for a while now. Work pretty well I think. They're easy and cheap.
gadget_lover
Flashaholic
This is actually a very important subject.
I've often thought that there should be a mandatory class in school where they teach about using bank accounts, getting loans, using MOs, crfedit cards, etc. Sort of like the inverse of home ec. Real world ec.
People tend to forget to teach kids about these things. Things that are part of everyday life are seldom explicitly taught. They take it for granted.
Daniel
I've often thought that there should be a mandatory class in school where they teach about using bank accounts, getting loans, using MOs, crfedit cards, etc. Sort of like the inverse of home ec. Real world ec.
People tend to forget to teach kids about these things. Things that are part of everyday life are seldom explicitly taught. They take it for granted.
Daniel
Since I don't have PayPal nor a checking account now, I only use Postal Money Orders for the few purchases that I've done here (and elsewheres). Never have had a problem nor have the seller come back to me with a question. Cost of money orders is 90 cents.
Hold on, gotta verify some info.
To write a money order, I write who I want to send it to, how much, and from whos (mine) bank account the money is coming from? So say I mail a money order to a guy named john. he gets it in the mail, and goes to the bank to get it cashed. The bank then accesses my bank account, and takes out the specified amount (of course after verifying that the MO is genuine). Is this what happens? So no ID is needed to obtain and send a money order, but an ID is necessary to cash a money order?
Thank you everyone who helped out. Glad I can finally know what the heck a money order is! /ubbthreads/images/graemlins/mpr.gif
Also, can I use a savings account for a money order?
To write a money order, I write who I want to send it to, how much, and from whos (mine) bank account the money is coming from? So say I mail a money order to a guy named john. he gets it in the mail, and goes to the bank to get it cashed. The bank then accesses my bank account, and takes out the specified amount (of course after verifying that the MO is genuine). Is this what happens? So no ID is needed to obtain and send a money order, but an ID is necessary to cash a money order?
Thank you everyone who helped out. Glad I can finally know what the heck a money order is! /ubbthreads/images/graemlins/mpr.gif
Also, can I use a savings account for a money order?
MaxaBaker
Flashlight Enthusiast
Umm, things are screwed up a little bit I think Mags. The money doesn't come from your bank account/s. When you go to the bank or post office and buy one, you give them money (say $60) that you have, and then they give you an MO for $59.10 ( theycost 90 cents). You then put the name, address, etc on there of the person you're sending it to, and then mail it to them. You can put your info on it to if you want. When they recieve it, they go to a bank and just have it cashed like a regular check.
BB
Flashlight Enthusiast
The Postal Money order is a check written on the "Post Office's Bank" because you gave them cash.
If you get a fradulent money order and attempt to cash it with the post office, they should not honor it. I don't know if the Post Office can 100% guarantee the MO is good when they cash it or not--or if they will come back later and try to get you to pay up if it was fradulent.
If you deposit a fradulent money order into your own account, the bank will credit you with the deposit, but if the Post Office refuses to pay--then the bank will comeback to your account and take the money back (see scam where bad guys try to get you to deposit the MO in your bank and give them cash back)...
-Bill
If you get a fradulent money order and attempt to cash it with the post office, they should not honor it. I don't know if the Post Office can 100% guarantee the MO is good when they cash it or not--or if they will come back later and try to get you to pay up if it was fradulent.
If you deposit a fradulent money order into your own account, the bank will credit you with the deposit, but if the Post Office refuses to pay--then the bank will comeback to your account and take the money back (see scam where bad guys try to get you to deposit the MO in your bank and give them cash back)...
-Bill
gadget_lover
Flashaholic
Like maxabaker said, you buy the money order for a ceratain amount. You give them cash, they hand you the money order. They charge a paltry sum for the service.
My wife likes Post Office money orders (POMO) because she believes that the post office will help prosecute (for mail fraud) if someone cheats you and accepts a POMO as the payment. That may or may not be true, but it might make a person think twice.
The are limits to the amount each money ordercan be worth, but there is usually no limit on how many you buy. To help out my son, I sent him $1000 in money orders. The bank had a $500 limit, so I bought two. It worked out fine.
BTW, Banks, credit unions, 7-11 stores, post offices and the "UPS stores" also sell money orders.
Daniel
My wife likes Post Office money orders (POMO) because she believes that the post office will help prosecute (for mail fraud) if someone cheats you and accepts a POMO as the payment. That may or may not be true, but it might make a person think twice.
The are limits to the amount each money ordercan be worth, but there is usually no limit on how many you buy. To help out my son, I sent him $1000 in money orders. The bank had a $500 limit, so I bought two. It worked out fine.
BTW, Banks, credit unions, 7-11 stores, post offices and the "UPS stores" also sell money orders.
Daniel
