So if I go into a store and ask to buy a money order and pay for it on my credit card, why is it my job to think about whether the store is making a good business decision? By that logic, why ever pay for something at a store with a credit card, since the owners lose up to 4% or potentially more on the transaction?

For whatever reason, some stores and merchants have decided that incurring credit card fees as part of the cost of doing business is, in fact, good for business overall. A business pays roughly the same percentage of the purchase to the CC company whether I'm buying milk, money orders, or gasoline and has decided that the cost to them for doing so is worth the profit that they are earning on the transaction overall. The profit earned on a money order sale is the fee they charge you for using that service. They may also decide that taking a loss on the money order sales is worth it to get that customer in the store to buy other stuff for all you know. It's a common enough practice.

It is ultimately up to the business to determine if they can make money accepting credit cards as payment for their products or not. If you feel that your local mom-n-pop shop has overlooked this and want to help them out, then you should explain this in detail to them, by all means.

I don't think that Mike's post above is wrongly 'holier-than-thou' or whatever others are insinuating, but I do not think that it is particularly informed. I think it's good to have this debate, but in the end, it is up to the merchant to seek what is best for the merchant and the customer to seek what is best for the customer.

Q: Is buying a money order with a credit card an illegal transaction? If so, where?

peace,
~Ben~