Money orders, with or without eBay

September 9, 7:40 AMScam ExaminerKarin Malchow

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Could eBay's no check or money order payment policy beginning late October 2008 contribute to the demise of the money order?  The money order's reputation was once excellent, considered almost as good as cash and certainly better than personal checks, since the purchaser already presented funds for the face value.

When Nigerian scammers altered the face value or produced counterfeit money orders, trust faded.  Most money order fraud occurs with overpayment schemes involving wiring excess money before the phony money order bounces.  Discovering the fraud can take weeks since redemption is outside the banking system.

Why do people continue to use money orders in an increasingly cashless age? (Only 10% of transactions on eBay are cash, personal check or money order.)

Originally designed for those without checking accounts, buyers sometimes use money orders to protect personal information, mistrusting providing strangers or websites credit card access or account numbers.  Others purchase money orders as a form of money management, ensuring only buying when they have available cash.

Money orders remain relatively safe without the overpayment red flag.  However, it's best exercising caution accepting them as payment, since scammers adapt and evolve. Many sellers only accept United States Postal Service money orders, which have as many security features as new money: threads, watermarks and special paper stock.