Money orders were a popular way for people to pay various entities for products and services in the past. People still use them in 2021.
Here is some information about money orders and how they work:
What Are Money Orders?
A money order is a paper form of payment that is different from a check. The main difference between money orders and checks is that payment on money orders is guaranteed. Someone who receives this form of payment can feel secure that they will receive payment as long as the item is genuine.
When Should I Use Money Orders?
An individual may choose to use money orders for a variety of reasons. One good reason to use that form of payment is when the person feels unsafe about carrying cash. It's also a good option to choose when someone wants to send a payment through the mail. Someone who doesn't have a bank account may choose to use money orders as well.
How Do Money Orders Work?
Money orders work very easily. An individual goes into a post office or establishment that sells such items. That person pays for the money orders with cash or a debit card.
The clerk will then issue money orders in the requested amounts. The buyer then needs to complete their information on the front where it asks for it and detach the stub for personal records. At that point, the individual can send the money orders to the recipients.
How to Avoid Money Order Scams
Just as with all other methods of payment, scams exist with money orders. These are ten tips that will help you to avoid scams with money orders:
1. Verify the Funds First
The first thing you need to do is verify the funds. You call the number on the document and use the serial number to check if it's valid. Do this before you ship an item off to a customer, and don't ever send anyone a partial refund from such an item until you verify it.
2. Make Sure It's Signed
The money order should have the buyer's signature on the front of it. Ensure that it does so that you will be able to get it cashed.
3. Check for Tampering
Check the document for any forms of tampering, such as manipulation of the numbers or anything else that looks strange. It may be a sign of fraud.
4. Look for Forgery
Look at the signature on the document and make sure it doesn't seem copied or forged. That will protect you from fraud as well.
5. Keep the Records
Keep all records from any money orders you receive or buy. You may need those records if an issue arises.
6. Don't Spend Funds Right Away
Sit on your funds until they clear if you're going to deposit them into your bank account. Wait at least a week to ensure that the funds are clear.
You should now know how money orders work, when to use them and how to avoid being defrauded. They can be excellent payment methods when the proper precautions are taken.