Is a Ripped Dollar Still Good? What to Do With It

A ripped or damaged dollar bill can cause concern about its value. While a damaged bill does not automatically lose its worth, certain procedures exist for handling such currency. Understanding these guidelines helps ensure your money’s value is retained, whether the damage is minor or severe. This guide outlines the steps to take, from basic exchanges at local banks to formal redemption processes for highly damaged notes.

Immediate Usability and Basic Exchange

Minor damage to a dollar bill, such as a small tear or heavy wear, might allow it to be accepted by some merchants. However, relying on this is generally not advisable, as individual businesses have discretion. The most common solution for slightly damaged currency is to exchange it at a local bank. Banks regularly handle currency considered “unfit” for circulation due to normal wear, such as being dirty, limp, or worn.

When exchanging currency at a bank, financial institutions look for criteria to validate the bill. More than half of the original note must be present, and its value should be clearly determinable without special examination. Both serial numbers should be legible to confirm authenticity and denomination. If these conditions are met, most commercial banks can exchange the damaged bill for a new one, depositing it with the Federal Reserve.

Official Redemption Criteria

The U.S. Treasury sets specific standards for redeeming damaged currency, ensuring consistency across financial institutions and government agencies. Currency is redeemable at face value if more than 50% of the identifiable note is present, along with sufficient remnants of any security feature. This primary criterion covers most accidental damage where a significant portion of the bill remains.

A provision also exists for redemption if 50% or less of the identifiable note is present. In such cases, the method of mutilation and supporting evidence must demonstrate to the Treasury that the missing portions were totally destroyed. This typically applies to currency damaged by fire, water, chemicals, or other catastrophic events. Intentionally defacing, mutilating, or destroying U.S. currency is illegal under federal law (Title 18, Section 333), and will not be redeemed.

Submitting Mutilated Currency to the BEP

For severely damaged currency, known as “mutilated currency,” that cannot be exchanged at a local bank, submission to the Bureau of Engraving and Printing (BEP) is the appropriate course of action. Mutilated currency includes notes burned, water-damaged, brittle, disintegrated, or otherwise damaged so their value is questionable or less than half remains. The BEP offers a free service for examining and potentially redeeming such currency.

To submit a claim, include a letter explaining how the currency became mutilated and an estimated value of the damaged notes. If possible, provide supporting evidence, such as an affidavit from witnesses or bank officials, especially if less than half of the bill remains. Package the currency carefully to prevent further damage; for brittle notes, this may involve placing them in cotton and a secure container without disturbing fragments. If the currency was found in a container, it is best to send the entire container to the BEP.

All submissions must include a completed and signed BEP Form 5283. Mail the currency and form to the BEP’s Mutilated Currency Division. For U.S. Postal Service (USPS) shipments, use P.O. Box 37048, Washington, DC 20013. For private carriers, the street address is 14th and C Streets, SW, Washington, DC 20228, Room 344-A. Processing times for mutilated currency claims can vary, ranging from approximately six months to three years, depending on case complexity and BEP workload. The BEP will communicate the decision and method of payment if the claim is approved.