Last week, because of “Circumstances”, we asked a customer to pay an invoice with either “Cash” or “Certified Check”. What showed up in the mail box was a “Money Order”. Money Order, well that might be Kool, let’s take it to the bank. Bank said, “ya, we’ll take this money order win an 11 day hold. What??? Why??? Isn’t a Money Order just like Cash or Certified Check???
The bank suggested taking it to WalMart saying “They cash anything”! But guess what, not this Money Order! WalMart said “take it to your Bank”. When I explained that I had already been to the bank, they said “Take it to Publix (a grocery store). And Publix said take it to WalMart.
So I took it back to the folks that orgionally issued the money order. Surely, they should take it. Mind you, I would not ordinarrily take this kind of time to run to all of these places to cash a check, but my curiosity got the best of me and I just had to let it play. The place that issued the Money Order was a Gas Station / Convenience Store across from my customer’s office. I simply marched up to the counter and asked if they had issued the Money Order. They looked it up and said “Yes, It’s one of ours”. I thought, Finally, I’ll get this thing cashed. No so, “We only issue Money Orders, you’ll have to take it to the Post Office to get it cashed.” When I arrived at the Post Office, well, you guessed it, they wouldn’t take it either. They only take US Postal Service Money Orders.
I felt like I had run this trap line to the end; much further than I should have. So I went back to my customer, told them my experience, and gave them back the Money Order. The went back to the Gas Station where they got it and asked for their money back, and paid me in Cash, but not before telling me that the Gas Station said “their Money Orders are taken everywhere, same as Cash”, and that they don’t understand why I am giving “Them” so much hassle. Sounds like they didn’t believe me or something.
I did this as a learning experience. Sometimes you have to do more than “know technically” what you are doing and why. Sometime you have to “feel the pain” to really understand. Man, I was feeling it!
So this is what I learned:
Cash is always best. It’s yours, no doubts, and everybody in the 50 states (and most of the world) will take it.
Certified Check: A certified check is a form of check for where the bank verifies that sufficient funds exist in the account to cover the check, and so certifies, at the time the check is written. Those funds are then set aside in the bank's internal account until the check is cashed or returned by the payee. Thus, a certified check cannot "bounce", and, in this manner, it the same as cash in liquidity (unless the bank fails).
Money Order: A money order is purchased for the amount desired. In this way it is “similar to a certified check”. Similar, but with “important differences”. Money orders were originally issued by the U.S. Postal Service as an alternative to sending cash through the mail for those who did not have checking accounts. Today, they are offered by many more vendors than just the US Postal Service as a means to pay bills and send money internationally where there were not reliable banking or postal systems.
However, just because a particular business can issue a money order does not necessarily mean that they will cash them. Due to the increased public awareness of fraudulent Money Orders, counterfeiters are using these to dupe their victims. By obtaining their "mark's" postal zip code, they will draft bogus money orders based on whichever franchises will most likely be in their victim's home area as the familiarity of the store's name offers a sense of security.
Furthermore, money orders are subject to erasing the name and writing in somebody else's name. Money order fraud is specifically not reimbursed by Western Union, and Convenience Store Vendors, and the victim is required to go through local police to attempt to recover lost funds. In response, the perpetrator who cashed the money order can simply claim "identity theft" to the investigating officer. Money orders for this purpose can be obtained from places like rent drop boxes and convenience stores.
Acceptance of money orders depends on the issuing vendor. US Postal Service, no question, my bank will take it. Western Union, American Express, perhaps a two day hold. But money orders issued by a small-town bank in Georgia or Sheboygan Wisconsin, for example, my bank “will take it with an 11 day hold”.
So for me it’s Cash, Certified Check, and no money orders please!