The U.S. Postal Service’s unassuming money order product actually has quite a distinguished history. The government established the United States Money Order System in 1864 as a safe way for Union soldiers to send money home to relatives.
A century and a half later, Americans still find money orders valuable. Last year, over 6 million American households purchased about 100 million of them with a face value of roughly $21 billion. Money orders – among the Postal Service’s most profitable products – generated $159 million in revenue in fiscal year 2015.
But postal money orders have been in major decline over the past 15 years, primarily because of alternatives from other providers and a broad shift toward electronic forms of payment. The total volume of postal money orders dropped 60 percent since 2000.
The Postal Service can reverse that trend, but the time to act is now. Our recently released white paper, Modernizing the Postal Money Order, offers insights on how the Postal Service might bring money orders into the digital age to boost revenues and better serve American consumers and businesses.
Improving money order sales is certainly achievable. We found that 1,100 high-volume post offices increased money order sales by at least 10 percent in the past 3 years. Our paper identifies some retail best practices the Postal Service could implement to boost sales of money orders, particularly at these high-volume post offices. One suggestion would be to have a window dedicated to selling money orders.
Our paper also suggests the Postal Service:
- Sell paper money orders through digital channels, such as USPS.com and the USPS mobile app.
- Introduce an electronic version of the money order, as many foreign posts have done. Customers could use such a product to pay bills, make person-to-person payments, or make ecommerce purchases.
- Assign a strategic manager to help modernize and stabilize this important product
Please answer our poll question, and share your thoughts below on what else the Postal Service could do to modernize and improve the money order.