Is Torn Money Still Good? What to Do With Damaged Bills
Navigate the rules for damaged currency. Understand its value, the process for exchange, and how to handle suspicious bills correctly.
It is common to encounter paper currency that has been torn, stained, or otherwise damaged through everyday use. While it might seem that such money loses its value, this is often not the case. Understanding the specific conditions under which damaged currency remains valid and the proper steps for exchange can help individuals recover the value of their damaged bills. This article clarifies the redeemability of various forms of damaged money and outlines the procedures for having it exchanged.
Determining if Torn Money is Redeemable
The redeemability of damaged currency depends on the extent and nature of the damage. For minor damage, such as small tears, folds, or slight discoloration, a bill is still considered valid for transactions. When currency sustains substantial damage, it falls under guidelines set by the U.S. Treasury’s Bureau of Engraving and Printing (BEP).
The BEP distinguishes between “unfit currency” and “mutilated currency.” Unfit currency is worn, dirty, or has minor tears, and can be exchanged at commercial banks. Mutilated currency is paper money so damaged that its value is questionable. For a mutilated note to be redeemable at full value, more than 50% of the original note must be present and identifiable as U.S. currency, including sufficient remnants of security features. If 50% or less of the note remains, redemption is possible only if the method of mutilation and supporting evidence demonstrate that the missing portions were completely destroyed.
How to Redeem Torn Money
The process for redeeming torn money varies based on the severity of the damage. For bills with minor damage like small tears, stains, or a worn appearance, most commercial banks will accept them as part of a regular deposit or exchange for new currency, provided the serial numbers are intact and the bill is identifiable. Banks can process these exchanges without special examination.
For significantly damaged “mutilated currency,” the redemption process involves the Bureau of Engraving and Printing (BEP). This includes bills damaged by fire, water, chemicals, explosives, or those torn into multiple pieces. To submit a claim, individuals must send the mutilated currency directly to the BEP’s Mutilated Currency Division, along with a letter detailing the estimated value, submitter contact information, and an explanation of how the damage occurred. It is important to package the currency carefully, disturbing it as little as possible. The BEP offers this redemption service free of charge, though processing times can range from six to 36 months depending on the case’s complexity and workload.
Handling Altered or Counterfeit Currency
Differentiate between genuinely damaged currency and currency suspected of being altered or counterfeit, as handling procedures are entirely different. Altered currency refers to genuine bills modified to change their denomination or appearance, while counterfeit currency is entirely fake. Neither altered nor counterfeit currency is redeemable for value.
If you suspect you have received a counterfeit bill, do not re-circulate it. Instead, note the details of how you received the currency, such as the passer’s description and transaction details. Contact your local law enforcement agency or the U.S. Secret Service, which investigates counterfeiting. Law enforcement agencies, banks, and cash processors will submit suspected counterfeit currency to the Secret Service for analysis and investigation.