What's the best form of payment to request when
I sell something? I've heard that there have been reports of fraudulent
cashier's checks. Are certified checks safer? What about money orders?
What are the pros and cons for each? --
Fraud is an issue for virtually any method of payment, not just cashier's
checks. There have been some problems with fraudulent cashier's checks
as well as a scam where you're asked to accept a cashier's check for
a higher dollar amount than the purchase price and requested to return
the difference to the buyer -- often as a cashier's check. An article
on Bankrate has more on this scam.
A cashier's check is drawn by a bank on itself,
signed by a cashier or bank officer and made payable to a third
party named by the customer. It is an instrument used to guarantee
funds are available. There is usually a fee associated with cashier's
checks. Buyers may balk at paying up to $5 for a cashier's check
vs. 90 cents to $1.25 for a USPS money order.
You should be able to contact the bank to confirm
both the check number and amount of the cashier's check. In contrast,
a certified check is a check certified by the bank where the account
is held, showing that there are sufficient funds in the account
for the bank to clear the check.
A money order is another form of payment instrument
typically purchased with cash. Western Union and the United States
Postal Service are the two major issuers of money orders in the
United States. Money orders can be cashed or deposited at your financial
institution. The USPS will cash its money orders at any post office.
The USPS maintains a list of missing U.S. money order
forms on its Web
site. It also maintains a page on its site that describes how
to check the authenticity of a money order.
Western Union's BidPay and eBay's PayPal both offer
sellers an alternate way to receive payment for goods and services.
Consider the costs as well as your protection against fraudulent
activity with these methods of payment as well.
Regardless of which payment method you choose
to accept, you'll want good funds on deposit before shipping an
item. That means that the check has cleared the bank it's drawn
on, not that your bank no longer has a hold on the deposit. Money
orders or cashier's checks should work fine when you take some basic