How could you send money to other countries without a bank account? Paypal? Checks? Cash? Here one unusual yet undervalued way to do it: money orders.

These papers can be as good as cash, except that they’re safer and cost-effective (without having to spend countless fees). Here are a few reasons so many people still use them till today and a few drawbacks that will make you think twice before using them.

Benefits of Using a Money Order

Trackable. If you keep your money in physical bills, you always risk losing it or being stolen. But if anything happens to your money order, you can pay a tiny fee to cancel it. Your provider will refund the full amount, which is why they are better than cash.
Guaranteed funds. Ironically, checks have always looked more secure. But unlike the former, money orders guarantee the amount they show. Senders have to fund it before getting the order.
No banks needed. You can always cash out a check without having an account (the seller still needs one), although they may deduct a small amount from it. But anybody can get money orders in banks, retail stores, post offices, even drug stores.
Anonymous sender. If you want to protect your identity or don’t trust the recipient enough, choose money orders. Unlike checks, they don’t show the sender’s address /banking data. If the wrong person gets the document, you may not want them to know how much money you have to send.
Cheaper. Although it may not be that much when sending 100s, money orders cost a few dollars less than checks. Some locations sell these under a dollar.

Drawbacks of Using a Money Order

Money orders are far from efficient:

Low limits. Most providers have set a $500 limit per money order, and the best ones only expand it to $1000. You can still send as much money as you want, but it will require many purchases and, therefore, fees.
Slow transit. When compared to electronic payments, money orders take too long. The recipient gets the funds weeks after the buyer sends it. They may sometimes get lost, thus adding up costs and taking more time to deliver.
Cancelation fees. You could get a replacement if you lost your money order. It will cost $10-$30 to cancel (some may charge 1% of the value), and after you do, there’s still a few days’ processing window. If someone else cashes it by that time, however, you’re out of luck.
Risky. Did you think only senders take the most risk? Think twice before you accept one. When you cash out a money order, your bank may place a hold on your account until it clears, which may last two or three business days. Frozen accounts aren’t ideal, especially when you need money now. How ludicrous would it be to freeze a $50K account because o a $20 deposit?
Inefficient. For every pro we’ve mentioned, there’s another alternative that delivers better. Money orders can help you get payments out of the way in the short term. But when used as a generic solution, they end up adding unnecessary costs.

Where To Get A Money Order?

Unlike checks, you can buy money orders on almost every major brand, from banks to retail stores. The thing is, each location may have a different rate. Some of them don’t offer money orders at all, even though the company claims they do.

All in all, most people will find any of these locations useful for money orders under $500, which are the majority. Here, we’ll show you the best places where to look (and which ones to avoid).

#1 Walmart

If you live in the US, Walmart should be your first option. With almost 5,000 stores opened, it won’t be hard to find one nearby.

Walmart sells Moneygram money orders for 88 cents or less and accepts up to $1000. You won’t find another store offering such a great deal.

#2 USPS

For a few cents more, US post offices provide some of the safest money orders for international use. They start with a limit of $500 for $1.25, which increases to the standard $1000 with a $1.75 upsell. USPS also accepts Postal Military Money Orders for 45 cents.

Mind that international money orders have extra costs starting at $10.25 (issuing fee) plus. A second (processing) fee depends on the destination country.

#3 Kroger branches

You can get money orders from $0.70 in the main groceries. But before you bring your money, make sure to learn what locations have the rates you want. Some apply different fees and limits. Other locations may offer none.

Expect the average order to cost over 70 cents for $500 and a bit more for $1000 limits, if there are.

#4 Banks and credit unions (not recommended)

Buying money orders from banks may sound obvious and safer, but not necessarily cheap. Because of the base price, these orders get more expensive when sending lower amounts.

It’s normal to pay $5 to $10 for a bank money order plus fees, but it doesn’t make sense when comparing it to Walmart’s 88 cents. But if you plan to send around a thousand dollars, even $5 may not be that much. If every dollar matters for you, it may be better to look somewhere else.

Almost every bank offers them except for CapitalOne and Bank Of America in some states.

#5 Online money stores

You might purchase a money order online. But most providers won’t offer these due to the security risks involved. How do you verify someone else’s identity when buying online?

These sites get shut down all the time, and if they did exist, they would be more restricted than physical money orders. If you’re buying online already, why not use more convenient methods instead?

If you find a company willing to take risks, make sure they’re trustworthy enough to give them your money. Scammers can pose as Western Union or Moneygram promising online money orders when they don’t really offer those features. Perhaps that new website is a phishing trick to steal your credit card.

How To Fill Out A Money Order?

Only buy money orders if you plan to send them immediately. Leaving them unfilled means that anyone who gets it can claim your money.

If you know the steps, it should take only a few minutes:

Pay To The Order Of:

Write the recipient’s name and double-check for spelling mistakes. The authorized person will require a photo ID to verify with that name.

Purchaser Section:

You should add your address in case the recipient needs to contact you. If paying bills, also include your account number so that they know who’s sending it and avoid confusion.

Purchaser’s Signature:

As happens with checks, the amount won’t be valid unless you sign on the front. The payee should sign on the back as well once they receive the money order.

These documents may also include memos to write the reason you’re sending those funds. This part may be unnecessary if you trust the person, or they expect the payment already.

Take a look at the different types of check fraud and how you can avoid these.

How To Prevent Money Order Scams?

It’s not very hard for a thief to fake a money order and steal the funds. If you send one, you don’t know whether it gets lost or the wrong person gets it. And if you receive one, it may not be valid.

As long as you beware of the risks and know what you’re doing, using money orders is safe. Here are some prevention tips from the most to the least obvious:

#1 Keep the receipt

No matter how experienced you are with fraud, it’s easy to miss one or two from time to time. You may not know how to recognize the scam, which is why having an emergency plan is smart. Prepare for the worst expecting the best.

After you buy the money order, you get a receipt you should keep for those situations. Lost order? A change of plans? Identity theft? Cover the minimal fee, and they’ll send you a replacement. Your provider will also cancel the previous one so that nobody can use it.

Any action you want to take requires the receipt and only works if nobody has cashed it yet.

#2 Verify your money order

Why would you want to verify a money order as a receiver? If that money isn’t yours, do you expose yourself to any risk at all? The moment you pay someone with fake funds, you do.

Let’s say you just spent real money on some business, and that someone sent you a (fake) money order before. Your bank may find out days later it was fraudulent and undo the payment, leaving you in debt.

What is payment fraud and how you can avoid it?

More often, the sender will want you to send them money before you verify the document. You may be holding a $10 money order that says $1000 instead, for example. The more is the urgency of payment, the more you need to verify.

If you go to the location, the employer may check the number and tell you: “This person hasn’t deposited that much money. The ID corresponds to a $10 order.”

#3 Be skeptical

Whenever someone asks you for a money order, you should look at it suspiciously. Although it isn’t fraudulent itself, understand that it’s not a conventional payment method. You will rarely find a person or business requesting a money order mainly because of the many better options available.

If you verify, there shouldn’t be any problems. You can legitimately accept money orders, but expect the risk of scam to be higher.

#4 Look for inconsistencies

There are tell-tale signs that the sender is trying to dupe you. People have seen these tricks over and over, and it’s impossible to not think of fraud whenever you spot them:

The paper has no watermarks, appearing to be printed or altered.
The amount sent surpasses the thousand dollar mark, which very few brands do. You’ll likely never see a money order worth over $2000. It gets more suspicious if, for example, you get $3000 from Moneygram, but you know the company only offers $1K maximum.
Payment instructions. “By mistake,” we sent you too much. Please, send us the difference while the money order processes.

Don’t ignore these red flags. Finding one of them should be enough to expose the scam.

#5 Be ready to repay your bank

It’s not a good idea to ask money when needing money, even though it may sound counter-intuitive. Before you spent the money you just received, take a few minutes to verify it.

Fraudulent senders encourage victims to spend it all as soon as they get the money order. It’s smarter, instead, doing it slowly or acting as if the money received weren’t yours. The best way to verify an amount from a sender you don’t trust is to leave the sum untouched for a few days/weeks.

Only skip this tip if you trust the person or don’t mind spending money you may not have.

#6 Learn about alternatives

There’s a reason money orders are “unconventional.” 99% of the time, you can make payments cheaper and faster with popular methods. Money orders may not be worth it when knowing the options available.

a. You want to send money internationally. However, you worry that your payment takes too long, or that the courier “loses” your money. Use wire transfer instead, but be aware that wire fraud exists as well.

b. You want to send money to your friend’s birthday. But since she lives abroad, half of your gift funds will go to cover transaction fees. You choose gift cards.

c. You signed for a recurrent payment and choose to pay it with money orders. But money order fees add up every month, becoming a ridiculous expense. So you send a voided check to set automatic electronic payments.

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