What to Do With a Money Order That Is Returned

Money orders are a reliable, prepaid alternative to personal checks, often used when cash or personal checks are not suitable. However, money orders can be returned to the sender, requiring specific actions to resolve the issue. Understanding the steps to take when a money order is returned is important for recovering funds and completing transactions.

Identifying the Reason for Return

When a money order is returned, determining the specific reason is the first step toward resolving the situation. Common issues include incorrect recipient information, such as a misspelled name or wrong address, which prevents delivery or cashing. A money order might also be returned if it is damaged or unreadable, making it impossible for the recipient or financial institution to process. Additionally, some money orders have expiration dates, and if presented after this period, they may be returned as expired.

Issuing entities, such as the U.S. Postal Service (USPS), Western Union, or MoneyGram, also have protocols for suspected fraud, which can lead to a money order being returned. In other cases, the recipient might be unable to cash the money order, leading them to return it. To investigate the cause, carefully inspect the money order itself for any markings, stamps, or notes that indicate the reason for its return.

The original purchase receipt contains the money order’s serial number, amount, date of purchase, and details of the sender and recipient. This receipt also identifies the issuer, which is crucial for further inquiry. Contacting the money order issuer directly with the money order and receipt allows for a precise understanding of why the funds were not delivered or accepted.

Claiming Your Refund

Once the reason for the money order’s return has been identified, the next step involves initiating the refund process with the issuer. While procedures vary among different providers, the general approach involves submitting a formal claim or inquiry. Typically, the original money order will be a primary requirement for the refund.

You will also need the original purchase receipt, which serves as proof of your transaction and contains tracking information. Many issuers require a completed refund request form, which can often be found on their official websites, at post office locations, or at agent service centers. For instance, the USPS requires PS Form 6401 (Money Order Inquiry) for such requests. Western Union and MoneyGram also provide specific forms for refund requests.

After completing the necessary form and gathering all required documents, you can submit your request either by mail or in person, depending on the issuer’s guidelines. Processing times for refunds can vary significantly, often ranging from 30 to 60 days, as the issuer must verify the money order has not been cashed. A processing fee may be deducted from the refund amount; for example, Western Union may charge a fee ranging from $0 to $15 depending on the money order’s value, while MoneyGram may charge an $18 processing fee for a refund request.

Next Steps After a Refund

Receiving a refund for a returned money order allows you to re-evaluate how to complete the original transaction or consider alternative payment methods. If the initial transaction still needs to occur, you have the option to purchase and send a new money order. When doing so, it is prudent to double-check all recipient information, ensuring accuracy to prevent another return.

Alternatively, if money orders have proven problematic, exploring different payment solutions might be beneficial. Options such as cashier’s checks, which are issued by banks and backed by their funds, offer increased security for larger transactions. Digital payment services or wire transfers also provide electronic alternatives that can offer faster processing and tracking capabilities.

Maintaining thorough financial records is important after handling a returned money order and subsequent refund. Keeping copies of the refund claim form, any communication with the money order issuer, and details of the new payment method helps create a clear audit trail. These records are useful for personal financial management and can assist with tax preparation or in case of future discrepancies. In instances where a money order was returned due to suspected fraud, the refund process might be part of a broader investigation, and retaining all documentation is crucial for potential law enforcement inquiries.