Money orders don’t have an expiration date, but as the years pass, service charges may be deducted from the amount they are written for, lessening their value. That’s an important fact to know about this form of payment, which is likely to be an affordable, secure, and convenient option for many people.
Keep reading for more insight on how a money order may not expire but can decrease in value over time.
Key Points
• Money orders do not have a set expiration date, but they can lose value over time due to service charges if not cashed promptly.
• Service fees may apply after one to three years of inactivity, potentially reducing the money order’s value significantly.
• Some states regulate uncashed money orders under abandoned property laws, which may further impact their status and value.
• Scams involving money orders can occur, so it’s crucial to verify authenticity and avoid sending them to strangers.
• Promptly cashing a money order is advisable to ensure its full value is retained and prevent any loss from service fees.
Do Money Orders Expire?
Money orders don’t generally expire, which can be a benefit when using them as a secure form of payment.
Here’s a closer look, however, at this aspect of this payment form. The way a money order works is the individual who needs to make a payment purchases the money order and pays for it upfront. Because of this, the payment can’t bounce like a check could.
Technically, money orders do not expire. However, they can lose some of their value if someone fails to cash or deposit a money order. Usually, if a money order goes uncashed for one to three years after purchase, then a non-refundable service charge will be deducted from the principal amount (though not in the case of USPS domestic money orders). The exact amount of this charge varies and depends on the unique terms and conditions of the money order. This service fee could then potentially be charged on a monthly basis, which could eventually deplete the value of the money order.
This makes a money order quite different from personal checks drawn on your checking account or a cashier’s check. These are typically void (or uncashable) after 180 days but don’t depreciate in this way.
Do Money Orders Lose Their Value?
Yes, money orders can lose their value after a certain period of time when service charges begin to kick in because the recipient didn’t cash or deposit the money order. (This can be done at a variety of locations like banks, credit unions, grocery stores, select retailers, or the U.S. Postal Office.)
While technically there is no set money order expiration date, in some states they can fall under abandoned property regulations after a certain period of time or can lose value due to those aforementioned fees.
What Happens if a Money Order Goes Unused?
So, how long is a money order good for and what happens if it goes unused? How long a money order is good for depends entirely on state laws and the rules set by the issuer. If a money order continues to go unused, service fees can apply that diminish or, in some instances, completely deplete the value of the money order, or the money order can be considered abandoned property. In the latter case, it’s up to the payee to identify this issue and attempt to reclaim the funds.
Tips for Keeping Yourself Safe With Money Orders
Money orders are considered to be a secure way to make payments. However, there are scam artists who commit money order fraud by forging money orders. This can cause major issues for the recipient of the money order. If someone receives a falsified money order and deposits it, the bank or credit union they used to deposit the fake money order will eventually discover the fraud. This can take the depositing institution a week or so to do, but when they do learn the truth, they remove the funds from the depositor’s account, potentially causing overdraft or non-sufficient funds issues.
On the other hand, paying with a money order can put someone at risk of fraud if the person they’re paying isn’t sincerely offering the services or goods they’re requesting payment for. Once they cash the money order, they may disappear without making good on their end of the transaction.
These are some tips that can make it easier to avoid money order scams:
• Don’t send money to a stranger. The FTC advises that consumers never send a money order to a stranger. If someone asks for the payment to be kept secret or claims they can only accept a money order, this can be a red flag.
• Verify funds before cashing. If someone is receiving a money order, they can contact the issuer listed on the back of the money order so they can confirm the money order is genuine before they cash it.
• Evaluate signs of forgery or tampering. Take the money order to the branch location of an issuer and ask them to inspect it, as you might with verifying a check. They can point out any signs of forgery they detect. (The recipient can also examine the money order to see if it appears to have been tampered with. For example, if the amount looks like someone erased or added to it, that can be a sign of a scam.)
• Wait to use the funds. After depositing a money order, hold off a week or two before spending the money. You might track a money order to make sure that it clears. That way, if the money order was fake and the bank takes the funds back, they’ll be available.
• Say no to pressure tactics. If someone is trying to rush you to quickly send a money order, cash it, or issue a refund, this can be a sign of fraud. The same goes for sob stories or threats with the aim of encouraging faster movement.
The Takeaway
Money orders typically don’t have a set expiration date, but after a certain period of time, if the recipient fails to deposit or cash the money order, service fees can be deducted from it. Eventually, these service fees can chip away at the value of the money order, even until it becomes worthless in some cases. This is why if you receive a money order, it’s best to cash it right away to retain its full value.
FAQ
Can you cancel a money order?
The payer can request to cancel the money order before the recipient has cashed it; they typically must have the receipt from the purchase in order to do this. It is also possible to replace a stolen or lost money order after the loss or theft has been confirmed (which can take up to 60 days to confirm). Having a money order replaced or refunded can result in an additional fee.
Can you replace a money order?
Yes, it is possible to replace a money order but only if the loss or theft of the money order has been confirmed. The confirmation process can take up to 60 days to confirm. If someone wants to replace a money order, they usually have to pay a processing fee.
Why do money orders never expire?
Money orders don’t expire because they have already been paid for when the money order is issued. For this reason, you can think of the funds as being guaranteed. However, if someone fails to cash a money order for between one and three years, service fees can apply and subtract from the value of the money order.
About the author
Jacqueline DeMarco
Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.
Photo credit: iStock/sinseeho
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