A customer came in and deposited a $500 MoneyGram money order. The teller did not check the date on the money order, and it was returned unpaid containing the following stamp, "PAYMENT STOPPED - STALE ITEM. Service Charge Contract on Back. Resubmit for Only $455.00".

The service charge wording on the back basically stated that after one year of issuance, MoneyGram charges a $1.50 per month service fee that is to be subtracted from the amount of the money order. What is does NOT state is who is responsible for submitting this for payment for the lower amount. Are we as the bank supposed to re-present the item and change the amount to $455? Or does the payee/our customer have to resubmit to MoneyGram and they issue a new, lower amount money order to negotiate?

Of course, I cannot find anything pertaining to this on the MoneyGram website, and calling them didn't help either. Has anyone else come across this before that could let me know how they handled it?

Charge it back to the customer and let them worry about it.

We charge the item back for the full amount. If our customer wants us to redeposit it for them, it is at the lesser amount (clearly written in a non-obstructive area on the face of the money order). I have not heard of any coming back. they can of course deposit it themselves for the reduced amount.

We did charge it back to the customers account for the full amount, but when he got the notice in the mail he came back to the bank and wanted to redeposit the substitute check for the lower amount. I'm glad to hear that you have had redeposited them at the lower amount and they have not come back a second time.