Bank Of America Has High Money Order Fees, Teller Recommends You Go Elsewhere
Christian writes in telling us he went into Bank of America looking for a cashier's check or money order, and the teller was so embarrassed of his bank's high fees — for customers, mind you — he recommended Christian look elsewhere. He writes:
I recently moved and started a checking account with Bank of America. I needed to send a friend who is incarcerated some money for commissary so he can buy food.
I went to BoA and asked for either a cashier's check or money order whichever was cheaper as the prison will accept either. The cashier told me that it would be $7.00 for a Cashier's Check or
$5.00 for a Money Order. Sympathetically she suggested that I go to the post office and get a money order there for $1.10These are the changes BoA applies if you have an account. If you don't have an account they will simply refuse to provide either a money order or cashier's check.
Props to the BofA teller for the customer service that went above and beyond. So, Consumerists, is Bank of America alone on these exorbitant fees, or have any of you found yourselves in similar situations while trying to give prisoner friends money for cigarettes and shivs — uh, I mean food?
(Photo: The Cornballer)
Post a comment
Comments:
The Albertsons near me charges $0.25 /$1000 for money orders. I think Wally World does too.
Wells Fargo was going to charge $7 for a money order, but then suggested I get a cashier's check, which was free.
My credit union doesn't charge for either.
I've gotten two cashier's checks within the past 12 months at Bank of America, as a Bank of America account holder. I wasn't charged a penny for them, so it looks like it's up to the branch what they will charge.
SunTrust (and I think one other bank) has a deal with my company where employees here get "Checking At Work" accounts with SunTrust. One of the few benefits of that account is free money orders.
Of course, there are drawbacks. For instance, SunTrust sucks.
@daveplot:
Could also be the tier of customer you are. Citi charges ~$8-10 for a cashier's check, but they're free if you're a CitiGold customer.
I did the same at Citizen's bank here in New England. I had to get a money order and a form notarized. Fortunately I checked that the USPS was so much cheaper. They wanted $7-9. The notary was free.
Bank Atlantic(FL only bank) charges $5 for ther cashiers checks if you don't have an account, free or $3 depending on if the manager is there if you do have an account. By that the manager throws me free cashiers checks, got nearly a dozen BofA customers to switch. ^_^
Free checking account, new debit card when you need one, open 7 days a week. Plus they never bought any of that crap mortgage stuff so they're solvent.
How much time does it cost to prepare a money order? 5 minutes? What is the overhead for a business? Employee salary, paper, ink, accounting, security, rent, utilities, etc. Let's say hourly overhead is $100.00. That's $1.66 ish per minute x 5 minutes, over $8.00 for five minutes.
It's awesome that Albertson's charges $0.25, but their is no way that covers their costs. They clearly lose money on each money order, but the loss is likely viewed as a marketing expense to get someone in the store who may buy groceries or other items.
When someone comes into a bank for a money order, they are not likely to engage in other activites that will generate revenue.
In this case, I don't fault the bank and kudos to the teller for being kind enough to tell the customer alternatives (that the customer could have researched and found out themselves). - Wow have I just blamed the victim?
I get cashier's checks from Bank of American fairly regularly and it is free for me because I have a FistChoice Gold account. I don't have to pay any fees or have a minimum balance because it's free if you have over $100,000 with the bank, and as my parents have their mortgage with BoA and I'm linked, I meet the minimum. I always thought it was odd that that 100k was counted by deposits plus debts, not minus.
I have worked as a bank teller and it was standard for us to tell our customers to go elsewhere for a less expensive money order. It's called customer service..
Money orders were free if the money was debited from an existing account but $3.00 if you brought in cash.
My bank charges $5 for a cashier's check. We couldn't go to the post office because it was closed, and the other places we could have gone to (grocery stores) won't issue money orders in the amount we needed. It wasn't such a big deal to pay the $5 considering we had nowhere else to go.
@SkokieGuy: Another thing to consider is that the bank has to actually set aside those funds somewhere. The bank is actually losing money on the money it has to set aside for that money order or cashier's check, which may take weeks, even months, to actually be paid. That's money sitting in an untouchable account doing nothing. Bankers hate that.
The thing that I'm curious about is why they would refuse to sell one to a non-customer. You buy them with cash, so why wouldn't they want to collect that fat fee from all comers? The only thing I can think of is counterfeit money--but that doesn't make much sense, as all cash transactions have that risk, it's rare in the US and a bank is more prepared to avoid that than most businesses.
I never understood how ghetto stores could offer money orders for 50 cents while banks offered them for a whopping 3 to 5 bucks.
Go to the grocery store or quick shop and get a money order for 50 cents or a dollar. Never get one at the bank. I don't know what my bank charges for M.O.'s or cashier's checks; I do get three free cashier's checks a year so that's what I do on the rare occassion I need something like that.
Five minutes? I don't know where you're buying money orders, but at the post office it takes about 45 seconds. (Now the line, on the other hand ...)
Also, I have to disagree with your cost analysis--practically evrything you mention (except the paper and ink) is a sunk cost--i.e., they pay those costs whether somneone is buying a money order, or the tellers are standing idle.
I've always gone to the post office for money orders, because most of them are free up to a certain amount. Whenever I buy tickets, etc., online, I go with money orders because it's just like cash except I'm not burdened by carrying around cash.
When I was still Wamu, back in the day, they wanted to charge $5 per money order. I quickly stopped.
warning credit union plug
As long as I withdraw from my credit union account the cashier's checks are free. Usually they'll make it out to the intended party and add on my name as an alternate so that if I don't end up needing the cashier's check (eh who knows) I can always bring it back.
I always get mine at the CVS next door to BofA for $.99 instead! However, sometimes if I ask a teller to waive the fee 'this one time,' it works. I've encountered some really wonderful tellers at Bank of America and some reeeaaaaal S**t-heads...
This has been happening at banks for years. I remember that I needed a money order several years ago (can't remember what it was for). Anyway, the teller at the bank advised me that it was a lot cheaper to get one from 7-11 or Turkey Hill. At the time, the bank charged $3, and the one I bought cost me $0.45. So it wasn't a huge savings, but it was indeed a savings.
@SkokieGuy:
No, the bank doesn't incur $5 of expenses just to print the money order. On the other hand, I don't think the bank cares much about selling money orders - most people who buy money orders buy them because they don't have a bank account. Other stores sell money orders for less because they want people to come in and buy other stuff.
Years ago I had an account with Wachovia and needed to get a money order for $6000. Teller told me it would be $10. I said I wasn't going to pay it. She said there was nothing she could do. I told her to give it to me in cash. She complained I'd empty her drawer. I said it's not my problem. All of a sudden she waived the fee and the M.O. was free. Amazing what can be done isn't it.
Or who you have them made out to. My credit union charges if you want it made out to someone else, but it's free if it's made out to you. When I took money out of my savings account to put the down payment on my house, I had it made out to me and then just signed the back.
I have worked as a teller in two banks. One was primarily commercial and noone gave a damn about paying the fees (which were similar to the ones in the story). But one was a local bank with mostly private accounts and we would regularly tell folks to go the post office or the drug store for money orders. We'd practically beg them not to get them from us. Bank checks, I believe, were free to customers but they had to be over a certain amount. The money order though....there was no excuse to pay us for them.
Same thing happened to me years ago when I was with 5/3. They wanted something like $20 (no crap) for a money order and the teller suggested I go to WalMart and pay the 79 cents. Now, my credit union does them for free. Hooray Credit Unions!
I used to use money orders a lot in the early days of eBay purchasing, before I got a credit card. My experience with major canadian banks is that almost every account package includes a certain number of free money orders, and that even if you're not a member of that bank, you can buy a money order for $3-5. The post office will sell you one cheaper.
My heart really goes out to you guys when I read the customer service hassles you have to go through... but keep in mind, the reason you're in this mess is because you voted in multiple governments bent on deregulating the banks. It's pretty much direct cause and effect.
@MichaelBrazell:
Postal money orders are never free. They cost exactly $1.10 or a $1.50, depending on amount (where APO money orders cost an exta 30 cents):
@GMFish: The price of goods sold has nothing at all to do with cost. It has everything to do with profit. A bank doesn't like money orders because the are a hassle and the CSR at BoA told the customer basically "we don't want to sell money orders", which is true. But if BoA must sell them, then they're going to charge a ton of money for the hassle. The local convenience store sells them because it brings more customers in to the store & they can do the transaction pretty quickly. Banks also have to be careful to watch for money laundering (money orders are a perfect way to launder money) but convenience stores don't have to track this as much.
Thanks to the honest teller!
@daveplot: i have a regular checking account, and it cost me nothing to buy either a cashier's check or money order. When i went to the on-campus Wachovia several years ago, i paid cash and it was free (for a $5ish money order)
USPS money orders are the best. They cost $1.10 up to $500 and $1.50 up to $1,000 and are completely hassle free to buy and use. Plus, you can cash USPS money orders at the post office for no fee, which makes it much better than trying to deposit or cash at a bank.
I was forced to have USBank cut me a cashier's check to pay for my re-fi (lender requirement), and yes $7, even though I have an account. I was blown away, but what could I do? I had to have the check. Bastards.
@treimel: They're probably paranoid about getting caught in the middle of some kind of money-laundering or counterfeiting scheme.
Just a guess, who really knows how BoA comes up with their policies?
If I had done what the teller did, I probably would have been written up if not fired. My manager is hardcore about NEVER directing the customers anywhere else (even if they have a far better deal on something than we do) and trying to do everything we can to sell the overpriced stuff to the customer.
Even if a customer asks us if it can be had for cheaper elsewhere we're supposed to respond with "I don't know"
This regularly happens to me at Citibank. Once a year, I'll need a money order for something. I'll go to Citibank, they'll tell me it is $5, not matter what the amount, and recommend I go to a grocery store instead. Then I think to myself, "Oh yeah, that's the same thing I did last year. Thanks, Citibank!"
When normal associates don't make enough money to care about maximizing the profit of a big company, this is what you get. And I like it.
I don't know how it works at Albertson's, but at WalMart, to get the $0.25 money orders you have to use a self-service kiosk that can also handle other sorts of financial transactions, if you want to buy one through a cashier, they charge you around $0.79.
US Bank was at $5 last I remember but its been a few years since I went back to Credit Unions. Now I don't get charged a thing for a Money Order or Cashier's Check. Plus I still get 3.75% interest with a minimum $1,000 balance in my checking + a few other small restrictions.
Credit Unions FTW.
My CU has one free cashiers check/month and after that they are $3 I believe.
I don't think they do many MO's with WalMart so close.
.46 there.
My local BOA regularly recommends this as well. I despise Bank of America for their ridiculous fees, but the tellers have always been friendly and helpful to me.
The "CASHIERS CHECKS" tag is mis-spelled as "CAHSIERS CHECKS"...
@dragonfire81: You know, I always think that if I ever open a store of some sort, I'm going to ask employees to give that kind of information if they have it. Customers like honesty. I know I myself try to frequent places where employees are honest more often.
"Do you offer money orders?
We offer money orders in most states. To find the exact fee for your account, please call the number on your statement or checks, or the number for Bank of America in your local telephone directory."
From the BoA website.
A certain account balance or type is generally what determines the fee amount and if there will be one at all.
Off topic, but this is as good a place as any to ask. What's the difference between a money order and a cashier's check? I've always wondered about that.
@dragonfire81:
He's obviously never seen "Miracle on 34th STreet." Seriously--it's just short-sighted. I had that happen to me at a hobby shop, where they didn't have what I wanted and I knew there was another one close by. Well, I asked the owner (as he's ringing up a sizeable order, mind you) where the other shop was. He looked straight at me and claimed not to know. Turns out, it was literally less than a block away. He had lied straight to my face. Well, needless to say, the "other guys" got all my business from that day forward, and if you know trains, you know that really added up to quite a bit. Dumb policy.
@Xerloq wants to...: The grocery store I worked at charged $0.60/$500 money orders. My credit union wants $5. Its pretty normal, unfortunately.
@SkokieGuy: It doesn't take five minutes to process a money order. The cashier takes and counts the funds, punches the amount into the money order machine, feeds in the form, hits a button, puts the carbon in the drawer, hands the rest of the form to the customer. Done.
And not even a real teller runs $100/hr in costs.
You would think it would only be BoA that does this but i smell some other banks are in on this too