Is the Issuer of a Money Order Required to Cash the Instrument?

Postal Money Orders

• Postal money orders are issued through any United States Postal Service and can be cashed or deposited at your bank, or by taking the money order to the nearest post office. Postal money orders are backed by the U.S. government, and assuming the money order is valid (and not suspected of being counterfeit), any post office is required to cash it. The recipient must present valid identification when presenting the money order for payment.
  
  

Bank-Issued Money Orders

• A bank-issued money order can be cashed or deposited at your financial institution or by going directly to the bank that issued it. If you attempt to cash the money order at your own bank and your bank account is overdrawn or does not have enough money to cover the money order, your bank may require you to deposit the money order instead of cashing it. The issuing bank always should cash its own money orders unless the bank officer suspects the money order is fraudulent.
  
  

Privately Issued Money Orders

• Private corporations such as Western Union and Moneygram offer money orders through various retail locations. Recipients can cash or deposit privately issued money orders at their home financial institution or by taking the money order to any retail location that issues that brand of money order. Increased concerns over fraud and counterfeiting have made issuers of private money orders more stringent with cashing policies.
  
  

Unused Money Orders

• If you purchase a money order at any issuer, and later realize you don't need to use the money order for its original purpose, you can request a refund for the unused money order by going directly to the issuing institution. You will need the original money order, the purchase receipt and valid identification.