April 4, 2016 (RARC-WP-16-007)
- While post offices sold $21 billion worth of money orders in fiscal year 2015, money order sales have plunged 60 percent from their peak in 2000.
- About 1,200 high volume post offices grew money order sales by at least 10 percent in the past 3 years, showing that improving sales is achievable.
- Selling money orders through digital channels could have significant benefits for customers, and the Postal Service could assign a strategic manager to help modernize and stabilize this important product.
During the Civil War, the Post Office Department introduced money orders as a safe means for Union soldiers to send money home to their families. A century-and-a-half later, postal money orders remain essential to the lives of millions of Americans who use them to make $21 billion worth of payments annually.
But as alternatives from other providers have appeared and broad shifts toward electronic forms of payment have occurred, the number of postal money orders sold has fallen by 60 percent from its peak in 2000.
To better meet the needs of those who purchase money orders and the businesses that accept them as a form of payment — saving them time and money — postal money orders could be modernized. The Postal Service also would benefit from a rejuvenated money order business, which is strategically important on many levels. The OIG has identified some digital strategies as well as some retail best-practices that could help the Postal Service achieve these goals.