There seems to be a number of people who seem to think that the use of a USPS MO offers some level of additional protection to the buyer. Nothing could be further from the truth. To the buyer, the USPS MO is no different than any other MO or personal check and offers NOTHING in regards to fraud. The only difference is to the seller, who can go to the PO and cash it without having to wait for it to clear.
The only 'protection' that is afforded is the fact that it is usually mailed. If any part of the transaction involves the use of US Mail, then postal fraud comes into play, but it has nothing to do with it being a MO. The problem is that USPS isn't going to waste their time for a $100 fraud case, unless it has been reported by a large number of people. Like many things, only the widespread or high $$ fraud cases get any type of action. Even local police aren't likely to get involved if it is what they consider 'low level'.
This doesn't mean it shouldn't be reported, as their have been many situations that have been resolved just by filing the fraud report. Ebay has been a furtile ground for fraud, and many times you see feedback about reporting it to USPS and magically the merchandise shows up.
Although you probably won't get much action out of the USPS, it won't hurt to report it, and who knows, it may scare the seller enough to make the situation right. Just don't expect the USPS to do anything.
Shitty way to have to operate, but its just the way things are.