If you are not near a branch, but you want to deposit cash to your bank account, or if your bank does not have branches, you can use a loading network to transform your cash into digitally-stored value.
One of the most common solutions for this problem is the MoneyPak. Green Dot, the purveyor of the Green Dot Card as well as the Rush Card and the GoBank account, owns and operates the MoneyPak product. You may have seen a MoneyPak card on a j-hook at a local drug store, gas station, or dollar store. My experiences underscore the widespread availability of MoneyPak; in my zip code alone, twenty-six locations sell MoneyPaks. While other networks still exist, they do not have the same coverage as MoneyPak. For example, only six stores (all Food Lion grocery stores) have the rival Reloadit product on their shelves.
MoneyPak generally costs more than any other loading service, so if you want to save a few dollars you could look elsewhere. Reloadit costs $3.95, for example. PayPal and MoneyGram also charge $3.95. A MoneyPak costs $5.95 to load up to $500.
How It’s Done
Go to a store that offers MoneyPaks.
1. Once you have entered the store, select a MoneyPak from a j-hook rack. Most stores locate the MoneyPak display inside the gift cards and prepaid debit card section.
2. Take the MoneyPak to the register.
3. Prepare to provide the cashier with the amount of cash you want loaded onto your card account, plus the fee of $5.95. For example, you will need $205.95 to load $200 to your account. Likewise, you will need to pay $25.95 to load twenty dollars. If you want to load a sum of between $500.01 to $1,000, you will have to pay $11.90 plus the amount of the load.
4. The cashier will give you a receipt. Importantly, you will see a code on the back of your MoneyPak package. Keep this because you must have it to recapture your deposit.
5. Go to the MoneyPak website. If it is your first time, you will need to register. You will have to supply Green Dot with your telephone number and create a password. As a condition of registering, MoneyPak will send a confirmation code by text message to your phone.
6. Provide your MoneyPak code.
7. Enter the 16-digit number on the front of your debit card.
8. Your account should be credited shortly.
Your funds are not FDIC-insured until you have completed the transfer from MoneyPak into your card account. This detail stems from the recently-established federal rule governing prepaid debit cards and not the internal corporate policy of the reload networks.
There are other ways to transform your cash to a digital value. The easiest option would be to utilize the “Reload@theRegister” service. Except for specific stores that offer a discount, Reload@theRegister costs $4.95.
You can deposit through PayPal. Once you have registered inside the PayPal app, you can generate a QR code with an amount corresponding to a specifc sum of your choosing. After doing so, the consumer takes the QR code to the register where he or she then gives cash to the cashier. As there is a debit card associated with the PayPal app, the money can be credited electronically.
Why is there a charge to load cash to my card?
Loading networks use your 16-digit card number to identify the destination of your funds. As a result, they send that money across through the VISA or MasterCard network. Either network will assess a fee (known as “interchange,” payable by the load network, to move these funds. Green Dot’s profit shrinks as the amount of the load increases, as the interchange is partially a function of the size of the transfer.
Are there Risks with Using MoneyPak?
Strictly speaking, a consumer who uses the service as it is intended to be used will not have a problem. The technology works.
On the other hand, MoneyPak has become a vector point for fraud. A few years ago, in recognition of the scope of the problem, Green Dot suspended its MoneyPak program.
The trouble usually relates to what is known as “victim-assisted fraud.” In this scheme, a person with malicious intents convinces an innocent but gullible person to buy a MoneyPak and then reveal the code. For example, a person might convince a victim that a relative has an immediate financial emergency. The perpetrator would say that he or she can receive the funds on behalf of the relative if only the victim will communicate the code. Typically the fraudster will ask the money to be deposited to a prepaid debit card. Individuals who prey on senior citizens have used the MoneyPak to their gain many times.
In their testimony, Green Dot gave a good example of the typical scam:
However, as the Committee has documented, this method of reloading a card is being exploited by scammers who target seniors with confidence scams. Such scams are designed to convince the senior that they have won a prize or some other similar enticement and that the way for the senior to collect the prize is to buy a MoneyPak for a specified amount of money and then provide the secret PIN number associated with that MoneyPak to the scammer. This is the equivalent of handing a stranger your bank debit card and telling them your secret PIN. As the Committee knows, the scammer immediately uses that secret PIN to empty the MoneyPak. At that point, the money is gone and the scammer is gone.
To this day, Green Dot makes it a priority to assist consumers who have been hurt by fraud. In 2014, Green Dot testified to the Senate Committee on Aging about the issue of seniors being scammed in Moneypak-related frauds. Again, the company has been proactive to convey their concerns to the public. In working with Green Dot's upper management - including their CEO - I have always come to the conclusion that the company is an excellent corporate citizen.
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