Liquidating Gift Cards using Money Orders (Updated for 2023)
This right here is perhaps the quintessential manufactured spending method. This is a tried-and-true method for MS that has been around for decades. The process here is simple - which is probably why it’s so popular: You buy a money order using the funds on your Visa / Mastercard gift card. Then, you cash the money order into your personal bank account.
Usually, you can expect a fee of around $1 per money order, and an upper limit to the value of the money order - somewhere in the range of $1,000-$2,000.
What is a money order?
A money order is a secure form of payment that functions similarly to a check, but is prepaid. It's a piece of paper or digital document that represents a specific amount of money, often up to $1,000 or $2,000, depending on the issuer's policies. Money orders can be purchased at various locations, and they are typically used for transactions where personal checks or cash might not be accepted or are less secure.
Where can I buy a money order?
Money orders are widely available and can be purchased from various sources, including: USPS, Banks, Grocery stores, Check Cashing stores, Pharmacies, and Retailers. Now, the caveat is that not all sources will allow you to fund you money order using a gift card.
For purchasing money orders using gift cards, we recommend the following locations:
Grocery stores: Specifically, Kroger affiliates and Safeways sell money orders at their customer service desks
Walmart
USPS
Depending on the location, the associate helping you may have gotten instructions to not allow people to buy money orders using gift cards. Typically, when working with a new associate, I like to start with a smaller (say $100) transaction, and if they comment on the gift card, I will have a regular debit card handy for making the purchase.
What types of cards can I use to buy a money order?
For MS purposes, you would typically use any Visa or Mastercard. Some locations will allow you to use credit cards for an extra fee, but those are typically not worth the cost.
Now, the real challenge with using gift cards to purchase money orders, is that some gift card networks will restrict the locations where you can buy money orders. By “Gift card networks”, I am referring to the bank/financial institution that backs those cards.
Which gift card networks can I use where?
I had initially filled out this section with details on a per-network basis, but this list has continued to grow. I’ve turned this into its own standalone post, which you can read here. We’ll keep that list regularly updated instead.
Advice on liquidating gift cards using money orders
Here are some tips for successfully liquidating gift cards using money orders based on personal experience:
Ensure Sufficient Funds: Make sure your gift card has enough funds to cover the cost of the money order, as well as any associated fees. If you have a $500 gift card, don’t buy a $500 money order, or you won’t be able to cover the fees!
Limit Purchase Amount: Be mindful of the upper limit for money order values, which is typically between $1,000 and $2,000. If you have a large balance on your gift card, you may need to split the purchase into multiple separate transactions.
In some stores, you can combine cards together. For example, you could string together 3 x $500 gift cards to purchase a $1500 money order in a single transaction! I’ll write a post on this topic sometime soon, as its a great way to scale up your liquidation.
Record Transaction Details: Keep a record of your money order transactions, including the store, date, and amount, for tracking purposes. Trust me on this one! Once you’re spending thousands weekly on gift cards, you’ll want to keep track of what you’ve liquidating and what you still need to work on.
Be Discreet: Avoid drawing attention to your transactions, as excessive or suspicious money order purchases may raise concerns. Don’t ask the associate if you can use a gift card, just go ahead and do it. If they turn you away, just say you didn’t know.
