Do Stores Take Ripped Money and What to Do With It?

United States currency serves as the primary medium of exchange for goods and services. The physical integrity of banknotes underpins public confidence and ensures smooth economic activity.

Store Acceptance of Damaged Currency

While all genuine U.S. currency is considered legal tender, individual businesses retain the discretion to accept or refuse damaged banknotes. The decision often hinges on the extent of the damage and the store’s policy.

A business might accept a bill with a small tear or minor defacement, common signs of wear. However, if a bill has significant portions missing, is heavily taped, or its authenticity is questionable, a merchant is likely to refuse it. Businesses often consider if the damaged currency can be easily deposited or cause issues during processing.

Determining Unfit Currency

The U.S. Treasury and the Federal Reserve define specific criteria for classifying currency as “unfit for circulation,” distinguishing it from merely damaged notes. Unfit currency typically refers to banknotes that are no longer suitable for everyday use due to their physical condition, such as being dirty, defaced, limp, torn, or excessively worn. These types of notes can often be exchanged at commercial banks.

A more severe category is “mutilated currency,” which includes notes that are damaged to the extent that one-half or less of the original note remains, or whose condition makes their value questionable. Examples of mutilation include damage from fire, water, chemicals, explosives, or even animal activity. For a mutilated note to be redeemed at face value, generally, more than 50% of the original note must be clearly present along with sufficient remnants of any relevant security feature. If 50% or less of the note is present, redemption depends on whether the Bureau of Engraving and Printing (BEP) is satisfied that the missing portions have been totally destroyed, based on evidence provided.

The Process for Exchanging Damaged Currency

For banknotes with minor damage, such as small tears or excessive wear, the simplest course of action is typically to exchange them at a commercial bank. Most banks will replace slightly damaged currency with new bills, provided that the serial numbers are intact and a substantial portion of the bill, generally more than half, is present. This exchange can often be done immediately, as banks regularly process and return unfit currency to the Federal Reserve.

For currency that is severely damaged or meets the criteria for “mutilated currency,” direct submission to the Bureau of Engraving and Printing (BEP) is necessary. This free public service involves a detailed examination by experts. When submitting, include a letter explaining how the currency became damaged, the estimated value, and your contact information. It is advisable to also include bank account and routing information for direct deposit of any reimbursement.

Careful packaging is crucial to prevent further damage. If the currency is in fragments, it should be secured in a way that minimizes disturbance, such as leaving it in the container where it was found if possible. The BEP recommends not attempting to restore or alter the currency with tape or glue.

Submissions can be mailed via the United States Postal Service to: Bureau of Engraving and Printing, Mutilated Currency Division, Room 344A, P.O. Box 37048, Washington, DC 20013. For private carriers, the address is: Bureau of Engraving and Printing, Mutilated Currency Division, Room 344A, 14th and C Streets, SW, Washington, DC 20228. The processing time for these claims can vary significantly, ranging from six months to over three years, depending on the complexity of the case and the volume of submissions.