If a money order is lost or stolen, it's important to act quickly to safeguard the cash you used to purchase it. Issuers all have procedures in place for cancelling payment and issuing replacements or refunds of uncashed money orders. They also all charge fees for doing so, but it's a small price to pay for recovering your cash.
How to Cancel a Money Order
As soon as you discover that the money order is missing, you should contact the institution that issued it to request that it be cancelled. Information for doing so is on the receipt you received when you purchased the money order.
If you don't have the receipt, you can return to the location where you purchased the money order (or any of its branches or offices) and explain the situation. You may need to visit an office anyway to complete the next phase of the cancellation process, completing and submitting a cancellation request form. You'll likely need to show ID and sign the form in person.
You'll also need to pay a cancellation fee. These vary by issuer. The U.S. Postal Service charges $6.95; MoneyGram (which issues money orders at Walmart as well as its own outlets) charges $18. Western Union charges $15, but, like many banks and other institutions, it hikes the fee (to $30) if you don't have a receipt.
When you submit your cancellation form, you can either request a replacement money order or a refund of the purchase price.
The replacement process can take up to 60 days, so if you're using the money order to make an urgent payment, you should probably consider sending another. If you'd like to check the status of your refund/replacement request, many issuers let you check the status of a return online.
If the Money Order Has Been Cashed
Filling out a money order completely, with the recipient's full name and address, makes it difficult—but not impossible—for a criminal to cash it. When you contact the issuer of the money order to request a cancellation, they'll check to see if it has already been cashed. (In most cases, you can also check yourself, by calling the customer service number on your receipt or entering the money order serial number at the issuer's website.)
If the money order has been cashed, the issuer will not replace it or refund the purchase amount.
Your best bet at that point is to request a copy of the signed, cashed money order from the location that cashed it. Contact local law enforcement and provide them with the copy so they can begin an investigation. If they locate the imposter who cashed the money order, you may be able to get the stolen funds back from them.
If you're careful to fill out a money order in detail, and hand it off directly to the recipient or send it by certified mail, your payment will likely go without a hitch. But if the money order goes missing, you have a good chance of getting your money back—minus a fee and a few weeks' delay—as long as it hasn't been cashed.
As an alternative to using money orders, you might want to consider opening a checking account, which lets you send funds without fees, and makes it easier (though possibly not free) to stop payment on lost or missing checks.