Do Money Orders Have an Expiration Date?
Do money orders expire? Uncover their true validity, how fees impact them, and what to do with older money orders.
Money orders serve as a reliable payment method, functioning as a pre-paid and guaranteed form of payment. While money orders typically do not have a traditional expiration date, their value can be affected over time by service fees or state unclaimed property laws.
Do Money Orders Expire
Money orders do not have an expiration date printed on the document, remaining valid indefinitely. This differs from personal checks, which banks may choose not to honor if they are six months or older. However, money orders can become subject to service charges or dormancy fees if not cashed or deposited within a specific timeframe. These fees are deducted from the money order’s face value, gradually reducing its worth over time.
The period before these fees begin to apply, along with the specific fee amounts, varies depending on the issuer and applicable state regulations. For instance, major issuers like Western Union and MoneyGram may start applying fees to uncashed money orders after the first year. These charges can range from around $2 to $5 per month. Conversely, domestic money orders issued by the U.S. Postal Service (USPS) never expire and do not incur any fees, maintaining their full value.
Fees and Unclaimed Funds
When a money order remains uncashed for a prolonged period, dormancy fees begin to accrue, steadily diminishing its original value. These charges are subtracted monthly from the money order’s principal amount once the specified inactivity period has passed. For example, a common structure might involve a deduction of $2 per month after the first year of inactivity. This ongoing reduction can eventually deplete the money order’s value entirely.
If a money order remains uncashed for an even longer duration, typically three to five years, the funds are subject to state “unclaimed property” or “escheatment” laws. Issuers are legally required to transfer the funds to the state’s unclaimed property division. The exact dormancy period before escheatment occurs varies significantly by state, with some states establishing a three-year period for money orders, while others may extend it to seven years. Once the funds are escheated, the state assumes custody, but the money remains claimable by the original owner or their heirs from the state’s unclaimed property database.
Cashing or Replacing an Older Money Order
Cashing a money order, especially an older one, requires presenting the document along with a valid government-issued photo identification. It is recommended to endorse the money order, which means signing the back, only when at the teller’s counter.
Money orders can typically be cashed at their issuing location (e.g., Post Office for USPS, or a specific Western Union or MoneyGram agent location). Many banks will also cash money orders, especially for their account holders, and some retail stores offer this service. While cashing at the issuing agent or your personal bank might not incur a fee, other locations, including check-cashing services or non-issuing retailers, may charge a fee, often around $4 to $5 for money orders up to $1,000.
If a money order is lost or stolen, or if a replacement is needed, it is essential to have the original purchase receipt. This receipt contains crucial information like the serial number, which is necessary for tracking and processing any claims.
The first step is to contact the money order issuer directly (USPS, Western Union, or MoneyGram) to initiate a refund or replacement request. A processing fee is typically associated with these requests, ranging from $15 to $30. For example, the USPS charges $21.00 for a replacement, while Western Union’s fees can vary from $5 to $15 depending on the money order’s value, and MoneyGram charges $25. A waiting period is usually involved for processing refunds or replacements, which can take anywhere from 30 to 90 days.