Quick summary
- All designs of Federal Reserve notes, from 1914 to the present, remain legal tender, but no federal law forces a private business to accept damaged cash.
- Dirty or worn bills with obvious value can usually be exchanged at a bank; notes that are half gone or worse go to the Bureau of Engraving and Printing.
- More than half of an identifiable note earns full face value; half or less requires proof that the missing paper no longer exists.
- Claims go to the BEP on Form 5283, and claims of $500 or more must be paid electronically using U.S. bank information.
- Before redeeming, check the serial number and condition, because some damaged notes are worth more to collectors than face value.
A torn corner or a bill that came out of the wash does not mean the money is gone. Most damaged cash can be spent or swapped at a bank, and even notes that are burned, chewed by a pet, or dug out of the ground have a free federal redemption path. The trick is knowing which situation you are in, because the bank route and the Bureau of Engraving and Printing route handle very different levels of damage.
Can a Torn Bill Still Be Spent?
Usually, yes. Under 31 U.S.C. § 5103, every design of Federal Reserve note issued from 1914 onward remains legal tender, which means the note is legally valid for payments no matter how old the design is. That is not the same as saying anyone has to take it. No federal law requires a private business, person, or organization to accept currency or coins, so a store can turn away a badly torn bill under its own policies. Some state and local laws do require businesses to accept cash within certain jurisdictions, so the practical answer depends partly on where you live.
When Will Your Bank Swap Damaged Cash for Free?
For routine damage, your bank is the right first stop. Currency that is merely dirty or worn, with its value obvious, is not considered mutilated at all. It can still be spent, or a bank will take it in exchange and eventually pull worn notes out of circulation. A bill with a small tear, a tape repair, or heavy creasing but clear value usually falls in this category.
Bank policies differ, so a quick call before you drive over can save a trip. If your bank declines, another bank may take the exchange, especially if you hold an account there.
Banks and depository institutions that handle large volumes of damaged cash have their own channel: they are told to contact the nearest Federal Reserve Bank for help. Mutilated notes never go to the Federal Reserve itself, and cash mailed there by a consumer will only slow things down, so the Bureau of Engraving and Printing is the destination for everyone outside the banking system.
What Counts as Mutilated Currency Under the Rules?
The Bureau of Engraving and Printing draws the line at notes that are missing so much paper that half the bill or less survives, or that are damaged in a way that makes their value hard to judge. The damage usually comes from fire, flooding, chemicals, or explosives; from animals, insects, or rodents chewing on stored cash; or from bills that petrified or broke down after years of being buried.
The service exists largely for people hit by disasters. The BEP points out that it is often of particular interest to people whose cash survived house fires, tornadoes, flooding, or similar events, and to anyone who finds money that sat for years in an attic, a basement, or the ground. On average, the BEP takes in more than 22,000 examination requests annually, and the notes involved are worth more than $35 million combined. The workload is not new either: in fiscal year 2005, the office handled more than 26,000 claims and sent reimbursements topping $97 million.
How Much of a Bill Has to Survive to Get Full Value?
Two standards decide the outcome. Full face value is available when more than half of a note survives, the piece can be recognized as United States currency, and enough of any relevant security feature remains for examiners to verify. A note that is half or less can still qualify at full value if the circumstances of the damage, backed by supporting evidence, convince the BEP that the missing paper no longer exists.
No redemption happens in several situations: when fragments cannot be identified as United States currency, when a submission shows a pattern of deliberate mutilation or an effort to defraud the United States, or when it appears to be part of a criminal scheme. In the fraud cases, the whole submission is destroyed or kept as evidence. The Director of the BEP has the final say on every redemption.
| What you have | Where to take it | What to expect |
|---|---|---|
| Dirty, worn, or slightly torn bill with obvious value | Your bank | Exchange at face value |
| More than half of an identifiable note, with security feature remnants | Bank or the BEP | Full face value |
| Half or less of a note, or damage makes the value unclear | The BEP | Full face value if the evidence convinces the BEP the missing paper is gone |
| Fragments that cannot be identified as U.S. currency | The BEP | No redemption |
The security feature requirement matters in practice. The examiner needs enough of the note’s built-in features, such as a partial security thread or watermark, to confirm the piece is genuine rather than a scrap of paper with a corner of a bill glued on.
How Do You Submit a Claim to the Bureau of Engraving and Printing?
Start with BEP Form 5283, which you complete on the BEP’s website before printing and include with your claim. The form also enrolls you in email updates that track your claim’s status as it moves along, so fill it out carefully.
Your submission should include a letter giving the estimated value of the currency and explaining how it was damaged. Pack the fragments so nothing shifts in transit, and mail them by Registered Mail with a Return Receipt Requested through the U.S. Postal Service to the BEP’s Office of Currency Standards, PO Box 37048, Washington, DC 20013.
If you prefer to deliver in person, claims are accepted only at the BEP’s Washington, DC facility, in Room 344A at the building where 14th Street meets C Street in southwest Washington, DC 20228. Drop-off windows run from 8:00 a.m. to 11:30 a.m. and again from 12:30 p.m. to 2:00 p.m. Eastern Time on weekdays, skipping federal holidays and days the facility is shut. Enter through the visitor entrance of the Annex building on 14th Street SW, the side of the street where the Department of Agriculture stands, and sign in at the security desk. Every in-person and mailed submission must include a complete, signed Form 5283.
The service costs nothing for individuals, businesses, and financial institutions alike. You pay only for your own shipping.
Collector’s tip
Photograph every fragment before it goes in the envelope and list the estimated value in your letter. If the package is lost in transit or the examination raises questions, your records and the Registered Mail receipt are what you will fall back on.
How Are Claims Processed and Paid?
The Mutilated Currency Division works through claims in the order they arrive, and the BEP has said replies to letters, phone calls, and emails may be slower than normal. Patience is part of the process, and the email updates tied to Form 5283 are the easiest way to follow along.
Payment happens electronically. Under Executive Order 14247, redemptions go out as electronic payments, such as ACH transfers, so claimants no longer receive a paper Treasury check. A claim that arrives without the correct bank details on Form 5283 will sit until the BEP has the information it needs. On top of that, rules at 31 CFR Part 100 set an extra condition for larger claims: claims worth $500 and up are payable only by electronic transfer, and they require account information from a bank located in the United States. Missing payment details can cause substantial delays, so double-check the routing and account numbers before you print the form.
Should You Redeem a Damaged Bill or Keep It Collected?
Redemption pays face value, so check whether the note is worth more than face before you mail it away. Serial numbers are the first thing to look at. Notes with fancy serial numbers, such as low numbers, repeats, or radars, can attract collector premiums, and our guide to spotting fancy serial numbers on bills shows what to look for. Star notes are the other candidate, since the star in the serial number marks a replacement note and some runs are scarcer than others. If you are unsure what the star means, see our comparison of star notes versus regular bills.
Condition shapes the decision too. A common, heavily damaged modern note is usually worth exactly face and should simply be redeemed. A scarce or unusual note may be worth an outside opinion first, and a dealer or currency specialist can often give a quick read before you commit.
What Mistakes Should You Avoid With Tape, Flattening and Cleanup?
Several well-meant repairs make claims harder instead of easier:
- Do not throw any fragment away, even scraps that look worthless. The examiner counts what is present, and a piece you considered junk may be the remnant of a security feature that settles the claim.
- Do not try to rebuild a bill with household adhesive tape. Tape can obscure the paper, ink, and security features the examiner needs to identify, and removing it later can cause more loss. Send the pieces as they are and let the professionals fit them together.
- Do not wash, iron, or flatten burned or water-soaked notes. Heat and moisture do further damage to fragile paper. This is the same logic behind our advice on why you shouldn’t clean your coins: original surface, even if ugly, carries the information that establishes what the item is.
- Do not split fragments across multiple packages or shipments. One claim, one package, one letter keeps the file together.
- Do not mail anything to the Federal Reserve. Consumers send mutilated currency to the BEP only.
If you are not sure whether a bill counts as mutilated, the safe move is to ask your bank first. A note they cannot exchange is a note that belongs in a BEP claim.
What About Damaged Coins?
Coins follow a different track. The Federal Reserve directs people with mutilated coins to the U.S. Mint’s website for information, since the Mint, not the BEP, handles coin redemption. So if your damaged find is a melted, corroded, or bent coin rather than a bill, start there rather than with the BEP forms.
Damaged paper money is rarely a total loss. A note your bank accepts costs you a short errand, and a note it cannot accept goes to the BEP for free examination and, in most legitimate cases, an electronic payment of the full face value into your bank account. Take a few minutes to photograph what you have, check the serial number, and complete the form correctly, and even a bill that looks like a loss usually comes back as money. If the damaged notes turned up alongside worn change, our article on what happens to worn-out coins explains where that side of the cash drawer goes.
Collector questions
Does a store have to accept my torn bill?
No. Federal Reserve notes are legal tender, but no federal law requires a private business to accept cash, so stores can set their own policies. Some state and local laws do require accepting cash, and those rules vary by jurisdiction.
Is there a fee to redeem mutilated currency?
No. The BEP’s Mutilated Currency Division provides this redemption service free to individuals, businesses, and financial institutions. You pay only for shipping if you mail your claim.
How long does a mutilated currency claim take?
The BEP processes claims in the order they arrive, and replies to letters, calls, and emails may be slower than normal. Completing BEP Form 5283 signs you up for email status updates as your claim moves along.
What about damaged coins?
Coins are handled separately from paper money. The Federal Reserve directs people with mutilated coins to the U.S. Mint’s website for information.
Coin values change with demand, condition and metal prices. This guide is general information, not an appraisal or investment advice.
