How do I Cash a Money Order?

While the purchasing and sending of a money order is a relatively straightforward process, some recipients may find it difficult to cash a money order, especially if they do not have bank accounts of their own. Trying to cash a money order from a foreign country can be even more problematic and expensive. There are several accepted ways to cash a money order, although each outlet has the right to charge its own fees or place other restrictions for the privilege.

The United States Postal Service (USPS) can issue official postal money orders at most of its local branches. The sender requests a specific cash amount for the face value of the money order, pays a nominal fee, and then enters a recipient's name before mailing it. The recipient can cash a money order issued by the USPS at his or her local post office branch. Sometimes a trip to a larger post office or another city may be in order, however. Especially large money orders may be difficult to cash at the beginning or end of the workday, since the postal clerks may have a limited amount of cash in their tills at those times.

If the money order is from Western Union or other non-postal money order service, it can still be cashed or deposited at the recipient's personal bank. This is assuming the recipient has an established bank account, however. Since many money orders are not issued by banks themselves, they are not obligated to cash a money order from non-customers or those without proper identification. A money order which specifically mentions a bank's name may be cashed at a local branch of that bank, provided the recipient has proper identification.

Another place to cash a money order is a local check cashing service. These companies may be willing to cash a money order for anyone who can provide proper personal identification, but they can and often do charge a substantial fee for the privilege. For some recipients, the fee may be nominal compared to the amount of cash they receive, but for others with smaller amounts the fee could be excessive. It may be a good idea to shop around for the best conditions before cashing a money order at a commercial check cashing company.

A number of grocery stores, convenience stores and beverage stores will also cash a money order, possibly for a nominal fee or no charge at all. Grocery stores deal with significant amounts of cash during the day, so they are often willing to cash money orders as a way to reduce their vulnerable cash supplies. Many grocery and convenience stores also sell money orders, so they can process cashed money orders themselves. Be prepared to present proper identification when attempting to cash a money order at a local grocery store.

Money orders from foreign countries are often issued in their native currency, not US dollars, so many domestic banks are reluctant to cash them. The money order might have to be cashed in the country of origin first, then the cash would have to be converted to US currency and deposited in a US bank. This is a long and expensive process, so the limited number of banks willing to go through it can charge a substantial fee. If you have a 50 dollar Canadian money order, for example, the US bank can charge 15 US dollars to cash it, and you would still only receive the US dollar equivalent of the remainder.

In short, the best way to cash a money order is to present it to the post office if it is USPS-backed, or to a friendly local grocery store or check cashing service if you do not have an established bank account. Otherwise, it may be easiest to deposit the money order into your checking account and withdraw the cash once it has been credited.