What is a disadvantage of money order? Have you ever considered sending money orders? Though they can be a good option for certain payments, there may still be some drawbacks.
Money orders are prepaid documents that act like checks or cash.
You can buy them from your local bank, post office, and other financial institutions, or even online.
They’re often used for rent payments, and to pay billers who don’t accept credit cards, as well as to transfer money between individuals.
While money orders can be a convenient and secure way to send funds, they also have some disadvantages that you should consider before using them.
In this article, we will discuss the disadvantage of money order so you are aware of the risks associated with it.
What is a Disadvantage of Money Order?
Money orders are a popular payment choice among people who don’t trust credit or debit cards and aren’t comfortable paying with a check.
They’re convenient and relatively affordable, but there are some potential downsides that you should be aware of before making the decision to purchase one.
Here’s what you need to know about the disadvantages of money orders:
Lack of Buyer Protection
Unfortunately, money orders don’t come with any built-in buyer protection like credit or debit cards do.
If your money order is damaged or lost, you won’t be able to recover your funds since it’s not traceable after it leaves your hands.
This means if someone steals it from you, they can easily cash it without any red flags being raised.
So while they may be secure to hold on to at home compared to checks, they offer little in the way of protection once they leave the premises.
Another major disadvantage of money orders is that they tend to cost more than personal checks when purchasing them at certain locations such as banks and financial institutions.
At post offices and similar establishments, however, you can often purchase them without incurring a fee.
Still, it’s important to factor in these costs when deciding whether or not a money order is right for your needs.
Money orders don’t include the same security features as dedicated payment cards such as encryption technology and chip-and-PIN technology, which makes them vulnerable targets for thieves looking to cash in stolen pre-paid orders.
Additionally, there have been numerous reported occurrences worldwide where victims have been tricked by scammers into buying them for items that did not exist or service that never shows up – only leaving them out of pocket with a useless piece of paper in hand instead.
Limited Use Cases
Money orders have limited use cases compared to other payment options such as credit cards and bank transfers.
That’s because merchants usually lack the infrastructure required for processing payments made through these methods whereas they can process traditional forms such as cash and checks with ease.
So even though most stores accept money orders – this doesn’t mean they encourage their usage or actively seek out customers who wish to pay using one.
Long Transaction Times
Money orders go through a long bureaucratic process before they are processed.
The issuing bank first verifies your identity before approving the transaction, so obtaining one in person could take up to 20 minutes or longer depending on how busy the service centre is at that time.
And once the money order has been purchased, it will still take up to three weeks for it to reach its destination and be credited into your recipient’s account—especially if it needs to be mailed across different countries or continents.
Overall, money orders can be quite a convenient way to send money.
However, it’s important to remember that they come with some downsides – including fees, the need for extra paperwork and identity verification, infrastructure issues in some countries and regions, and limited amounts that can be sent.
It’s important to weigh these factors before deciding if a money order is right for your needs.