Accepting Money Orders: A Comprehensive Guide for Recipients

A money order is a financial instrument similar to a check, although instead of being issued by a private account, a credible, third-party company backs the funds. They're often issued by the U.S. Post Office and Western Union, and the third party guarantees the availability of funds. While receiving a money order may be slightly more difficult than receiving a check or another form of payment -– particularly for those who don't have a bank account -– accepting a money order isn't much more complicated than accepting a cashier's check.

Step 1

Confirm that the money order is made out to you or your company. Like a check, a money order is only payable to the person named as its payee. Don't accept a money order made out to a third party or improperly naming you or your company, as you'll need a valid bank account or identification to cash it.

Step 2

Determine the money order was issued from a credible company in a recent time fram. While many companies issue money orders, they may go bankrupt. Additionally, determine the money order isn't fraudulent. Those issued by the U.S. Postal Service contain Thomas Jefferson watermarks, security threads and denominations listed in two places.

Step 3

Cash the money order as you would cash a check at your bank, presenting your identification if necessary. If you don't have a bank account, you may seek payment from the issuer of the money order, such as at a post office or Western Union location. Additionally, many supermarkets cash endorsed money orders for a small fee.