On a money order, the buyer is referred to as the remitter. For instance, if someone needs to ship a payment but doesn’t have any checks, they can buy a money order. That person then becomes the money order’s sender.
In addition to money orders, cashier’s checks, teller checks, and some traveler’s checks all have a remitter line. A retailer or seller who demands a remitter payment, or another type of payment besides cash or a personal check, typically does so to reduce risk. Payments made by remitters are nearly never returned for insufficient cash.
A vendor or merchant may ask for a remitter payment for a number of different reasons. Remitter payments give merchants the security of guaranteed funds, as was already mentioned.
In most cases, this is preferred when transacting business with strangers. For instance, if the two parties have never done business together, the seller of the car may request that the buyer show guaranteed cash.
Money sent to inmates is frequently sent using money orders and cashier’s checks. Remitter payments are preferred over cash and personal checks for a number of reasons, not the least of which is that they are less likely to be counterfeited and do not incur additional fees for the merchant or seller to cash.