Can Money Orders Bounce?

Money orders are handy as an alternative to sending cash or transferring from bank to bank. But can money orders bounce if there’s no money available?

No, money orders cannot bounce. In fact, that is why so many people choose them as a means of payment – they’re some of the most secure forms of payment available across the US. Unlike cheques, money orders are prepaid, which is why they cannot bounce back.

But how do money orders work, and when might you use them?

How do money orders work? 

Money orders are commonly issued by general stores such as post offices and groceries.

To make a money order, you need to purchase it. Although it may sound a little strange to “purchase money,” you are simply purchasing the ability to send a set amount to your recipient (while paying an issuer’s fee). In that sense, it’s no different than purchasing a gift card or a pre-paid credit card.

One of the great things about money orders is that they can work on very low to very high sums. For example, within the US, you can send up to $1000 from a post office in just one order. 

Once you have requested a money order, you will need to fill out a form with relevant information, including: 

• The amount you’re sending 
• The date 
• The location 
• Your name and address 
• The name and details of the receiver 
• A description of the reason for the payment 

Once this document has been filled out and approved, money will transfer straight to the receiver. Once they have received the money order, they can deposit it into their bank account, just as you would with a cheque. 

Why don’t money orders bounce? 

Money orders are prepaid. That is to say that when you go to make a money order, you pay for it outright, removing the possibility for it to bounce or reject.

Although money orders may resemble cheques, the latter rely on available funds in your bank account. Cheques bounce if the amount written on them is not available in the corresponding account.

Why should I use money orders? 

Money orders are great for senders who do not have bank accounts of their own. People can use them to pay bills, send money to friends and family, and so on. 

They can also be beneficial if you want to avoid sending cash in the mail. Cash and cheques can easily get lost in transit, but money orders are a secure service. 

Finally, money orders are a perfect option if you want to avoid risking the money bouncing back. If you are unsure about a cheque clearing, opt for a money order instead. Simple!

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