How Torn Can a Bill Be and Still Be Exchanged?

When paper money becomes damaged, its value might seem lost, but this is not always the case. United States currency, even when torn or otherwise compromised, can often be exchanged for new bills. There are specific guidelines and established processes for redeeming damaged currency, depending on the extent of the harm. Understanding these procedures is important for anyone holding currency that has seen better days.

Understanding Redeemable Currency

Determining whether damaged currency can be redeemed hinges on its condition and the ability to identify it as genuine U.S. tender. A foundational guideline for redeemable currency is the “50% rule.” Generally, if more than half of the original note is clearly present, it can be exchanged at face value. This rule ensures that a significant portion of the bill remains for identification.

For a note to be redeemable, specific features must be identifiable, including serial numbers, security features, and the denomination. If less than 50% of the note remains, redemption requires supporting evidence that the missing portions were completely destroyed. This helps prevent fraudulent claims.

It is helpful to distinguish between “damaged” or “unfit” currency and “mutilated” currency. Unfit currency includes bills that are merely worn, soiled, limp, torn, or defaced, but still have clearly more than half of the original note intact, and their value is not questionable. Mutilated currency, in contrast, refers to notes damaged to the extent that 50% or less remains, or whose condition makes their value uncertain, thus requiring specialized examination. Causes of mutilation can include fire, water, chemicals, explosives, or even damage from animals or prolonged burial.

Exchanging Slightly Damaged Bills

For currency in the “unfit” category, such as bills with minor tears, tape, or general wear, the exchange process is straightforward. Most commercial banks will accept these notes from their customers, allowing for quick replacement.

When presenting a slightly damaged bill, the bank will verify its authenticity and assess the damage. If more than half of the original note is present and its value is apparent, the bank can exchange it. Banks send these worn notes to the Federal Reserve for removal from circulation.

Submitting Mutilated Currency

Severely damaged, or “mutilated,” currency cannot be exchanged at a local bank. It must be sent to the Bureau of Engraving and Printing (BEP) for examination. The BEP’s Mutilated Currency Division provides this service free of charge.

The submission process requires careful handling. Do not disturb fragments; if found in a container, leave them there. Remove any coins, as they can cause further damage. All submissions must include a completed BEP Form 5283.

In addition to the form, a letter should be included that explains how the currency became mutilated, its estimated value, and your contact information. For claims totaling $500 or more, providing bank account and routing information allows for electronic payment. The currency and accompanying documents should be sent via registered or certified mail for security.

Mail submissions via USPS to: Bureau of Engraving and Printing, Mutilated Currency Division, P.O. Box 37048, Washington, DC 20013. For private carriers, use: Bureau of Engraving and Printing, Mutilated Currency Division, 14th and C Streets, SW, Washington, DC 20228. The BEP employs trained specialists for examination. Processing times range from six months to three years, depending on complexity and workload. If redeemable, a check is issued; otherwise, a letter of explanation is provided.