TL;DR: the marginal difference is so small that it doesn’t matter. Do whatever you feel is more convenient for yourself / the cashier. If you can lump together multiple MOs in one transaction, or have some small value debit gift cards to get rid of, get the maximum value of the MO.

Given the TL;DR, why am I writing this post? For the math of course!

Say you have 2 $500 Visa gift cards that you have acquired through mysterious means, and you are at your favorite place to get money orders. The fee for a money order of value between $500.01-1000 is $1.60. The question is, should you purchase a $998.40 money order with total value of $1000, or a $1000 money order for a total cost of $1001.60.

In the first scenario, you do some mental math, tell the cashier the exact figure that you want, swipe both your gift cards and are done. You’ve used both gift cards and now have a $998.40 money order.

In the second scenario, you tell the cashier you want a $1000 money order, swipe both cards, and now you have a lovely $1.60 fee to take care of. Now the question is, how do you pay for that $1.60 fee? Cash? Non-points earning debit card?

If you pay with a non-points earning method, you’ve earned no additional points, and it’s probably taken more time to do that 3rd swipe. Seems pretty pointless to me (Hah! See what I did there?)

What if you paid with a points earning debit cards, that gives say, 1 point per dollar. You’ve now earned 1 point, possibly 2 points for an additional return on $1000 of 0.001 points per dollar. Was that worth the extra time to you? Say that extra swipe took 10 seconds, and you value your free time at $20 an hour. That extra swipe’s opportunity cost was 5.5 cents.

What if you had a random $20 gift card that you got by, say, a mail-in rebate and you don’t have many other convenient liquidation options for that small of a debit gift card? Sure you’ve spent some extra time, but you’ve also helped liquidate part of that random gift card which you had no other way of liquidating. I say go for it. However, now you have to keep track of the leftover value on that random gift card.

What if you were buying more than $1000 of money orders with more than $1000 of gift cards? Say you had 4 $500 gift cards. However, your local favorite money order source only lets you buy 1 money order at a time. So if you got a $1000 money order, you would have $1.60 leftover to pay. Should you put that $1.60 on another $500 so you can liquidate it? Say you did, you now have a $498.40 gift card, which is a harder number to keep track of. And you would have fully liquidated it on the next money order anyways. So this doesn’t make any sense either.

The calculus changes a little bit for places where you can buy multiple money orders at a time in 1 transaction, which means you can pay for the actual value of the money order with your gift cards, and the fees as a leftover lump sum. I haven’t figured out how to do this at my favorite money order location, but then again I’m not a heavy hitter, I just do like $3,000 at a time. But in this case, you can state nice round amounts to the cashier, and just take care of the leftover fees in one go. I say go for those nice round numbers. But what’s the overall difference if I got 3 x $1000 money orders vs 3 x $1000 minus the money order fee? That’s that’s 3 x $1001.60 – $3000 = $4.8 in fees. So in either case, you got rid of all your gift cards, but earned 5 extra points. Not too big of a difference!

Overall, I value my time more than 1-2 pennies worth of points, and I don’t like annoying cashiers! You just have to be very precise when stating your amounts and be good at subtracting the amount of the fee from the money order value, which I found not to be a problem. Unless you are able to lump multiple fees into one charge, I would just get the money order with the fees subtracted from the maximum face value of the money order.

Just some food for thought when you are on your manufactured spending runs!