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What is a postal order?

Maria McCarthy / 25 April 2017 ( 06 April 2021 )

Whatever happened to postal orders, which were once such a popular way of giving gifts? What is a postal order, and how do they work?

Money in an envelope to represent sending money via postal order

Do you remember postal orders? It’s a safe bet that you probably received one on your birthday, enclosed in a card from your grandparents, or used one to pay for membership of the Donny Osmond or T. Rex fan club!

Perhaps you can recall your mother buying one to cover the cost of catalogue goods. Are they a thing of the past, or could you still use a postal order, if you needed to? 

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Do postal orders still exist?

Now we can make payments via our mobile phones, using contactless cards and chip and pin (while cheques still occasionally come in handy), many people assume that postal orders have been phased out.

But they are still available at a Post Office near you, though their use has declined.

They were at the peak of their popularity before the late 1960s, when most transactions such as payment of wages or rent were carried out in cash and many people didn't have bank accounts.

That meant that if they did need to send money as a gift, or to buy products or services, cheques weren't an option. In the light of this, postal orders were used. Now, of course, the payments landscape has completely changed.

However, some people still prefer to use postal orders, either because they don't have a bank account, or because they’d rather not give away any personal data. They are sometimes used for mail order and ebay purchases, and some government departments accept postal order payments. For example, it's possible to pay for a provisional driving licence with a postal order.

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What is a postal order?

Postal orders work in a similar way to cheques, but without the need for a bank account. But there is an additional fee payable for the service, making it more expensive than paying by debit card or cheque. Postal orders can be bought in any value up to £250.

  • Postal order value between 50p and £4.99 – 50p fee
  • Postal order value between £5-£9.99 – £1 fee
  • Postal order value between £10-£99.99 – 12.50% of the face value
  • Postal order between £100 and maximum value of £250 – capped at £12.50

Crossed postal orders can only be paid into a bank account or used to pay bills at a Post Office branch. To cross a postal order, you have to write the recipient's name on the order – then they are the only one that can use it. Uncrossed postal orders can be exchanged directly for cash at Post Office counters.

Postal orders are often used to send money overseas and some countries such as Malta and Grenada also sell British Postal Orders.

The Post Office website has details on the countries in which postal orders can be cashed and bought.

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What do I do if my postal order is lost or stolen?

If it's been lost, you'll need to wait 15 days after posting and then get a P58 (lost post form) from a branch and send it off to Royal Mail along with proof of purchase. It's important to hold onto your postal order receipt as it's needed for the unique ID number.

If the postal order is stolen, then you will need to contact the police and get a Crime Reference Number. The police will then contact the Post Office with this number and you will have to contact the Post Office on 0345 722 3344 (fees apply); if the order hasn't been cashed a refund will be issued.

What if I want a refund for a postal order?

If you want a refund of a crossed or uncrossed postal order and have the receipt, you can get a refund from the Post Office.

If you don't have a receipt and want a refund, you'll have to send it to the Postal Order Team, 1 Future Walk, Chesterfield S49 1PF. The refund is carried out via a payout letter, not a physical postal order. You'll then need to take that letter to a post office branch, provide valid ID and will get a refund in cash.

Avoid postal order scams

The Post Office or Royal Mail never send email notifications to say a postal order has been received. If you receive an email like this the Post Office website urges you to report it to the police.

Visit our consumer rights section for more ways to avoid scams

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The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.