What to Do With Ripped or Damaged Money?

When paper money becomes torn, worn, or otherwise compromised, its value is often retained and can be exchanged for new notes. Understanding the proper procedures for handling such currency is important to ensure its full value is not forfeited.

Determining Redeemability

The United States Treasury provides general rules for determining if a damaged banknote remains redeemable. A primary criterion is that more than 50% of the original note must be identifiable as genuine currency. This means that if a banknote is torn in half, and you possess more than half of it, it generally retains its full face value.

Other factors also play a role in assessing redeemability, such as the presence of security features like the security thread and watermark, as well as identifiable serial numbers. Currency with minor damage, such as a small tear or a piece of tape, can be exchanged relatively easily. However, notes that are severely compromised, perhaps due to fire, water, or decomposition, might require a more specialized process for redemption.

Exchanging Damaged Currency

For banknotes that retain a significant portion of their original design and security features, commercial banks are the first point of contact for exchange. You can bring the damaged note to your bank, where tellers will examine its condition and authenticity. Banks verify the note meets general redeemability criteria, such as having more than half of the original note present.

Upon successful verification, the bank will usually exchange the damaged currency for new notes of equal value. While banks are generally willing to provide this service, they are not legally obligated to exchange damaged currency. Some institutions may have internal policies regarding the condition of notes they will accept for immediate exchange. This process provides immediate resolution for minor damage.

Submitting Mutilated Currency Claims

When currency is so severely compromised that it cannot be exchanged at a local bank, it falls under the category of mutilated currency, requiring expert examination. Claims for such currency are handled by the Bureau of Engraving and Printing (BEP). This process is necessary for notes that are fragmented, charred, water-damaged, or otherwise significantly altered.

To submit a claim, gather all fragments of the damaged currency, carefully preserving them in a secure package. Include a detailed letter explaining how the currency became mutilated, its original denomination, and your contact information. The package should then be sent via insured mail to the BEP for safe arrival and tracking. The processing time for these claims can vary significantly, often ranging from several months to over a year, depending on the complexity of the damage and the volume of submissions. Once examined, the BEP will notify you of their determination, typically issuing a check for the determined value of the currency.