What to Do With Ripped Money?

We know and use money in many ways; it’s pretty fair to say that our lives are practically impossible without its presence. Unfortunately, we sometimes have money in our pockets, bags, or just in our hands when we slip those out and damage them enough for not functioning. Not only that, but the banknotes also tend to rot when stored in an unsuitable environment for more extended periods. When such situations arrive, the first question is, what do you do with torn money?

What to Do With Ripped Money?

If you have ripped money and more than half a paper note is present, you can exchange it for cash at the bank. However, if your ripped money is high damaged, you have to mail your mutilated money to the Department of the Treasury’s Bureau of Engraving and Printing, and they will mail you back a check.

Damaged money received by the Federal Reserve System, the United States, is straightaway removed from circulation. But, that is not the only destination that money arrives at, and there are different possibilities as well. So, when you’re dealing with damaged money, you must also know what kind of default is present with the banknote.

Are you confused or wondering what happens with that spoilt bill of yours? Check out this article for more such details.

Will the bank replace damaged money?

Yes, the bank will replace damaged money and exchange it if more than half a paper note is present or if money is not extensively damaged. Mutilated money you can send via mail to the Department of the Treasury’s Bureau of Engraving and Printing, and they will mail you back a check.


Twenty-eight cash offices of the Federal Reserve System are responsible for putting up the bills for circulation across the United States. These offices cover all the significant areas, be it Dallas, San Francisco, or Boston. St. Louis’s federal currency operations are based at their very own Federal Reserve Bank along with their Memphis branch.

What if my cash is torn, worn, or defaced?

When you have banknotes that are either torn, worn, or defaced, it is automatically considered “unfit” for consumption. This is because not only the Federal Reserve Bank is in charge of providing money for circulation, but it also takes the responsibility of removing currency that is unfit from the circulation belts. According to the Cash Product Office of the Federal Reserve System, worn, defaced, limp, dirty, and torn cash is, “Note that is not suitable for further circulation because of its physical condition.”

According to a representative from the St. Louis’s Federal Reserve Bank, around eighty-five percent of the banknotes they receive for circulation are fit for usage. However, they still have machines that could help point out any defaults and defects that are not meant to be present.

Just in those cases when these Reserves get their hands on the money, here’s how they identify the ripped cash:

Sifting through the bill.
Technological equipment for a quicker process.

The same representative and expert claims that when the machine identifies the damaged bill, it also justifies the percentage of the damage. They determine whether it’s fit enough for consumption. The machines are capable of detecting the highest amount of percentage when it comes to the damage.

But just as we know that the machines are unable to identify appropriately at all times, when the outcome isn’t clear or a machine cannot process the note, a human examiner takes a look at those bills.

What if you think the note in your hand is unfit to be passed ahead?

Cash Production Office says any time you feel that your note won’t function in the market, take it to a local bank operating commercially and try to get it exchanged. Until the damage exceeds 50% or the value isn’t determined, it can be exchanged, with the ripped one being sent to the Fed. by the nearby commercial bank.

What is the outcome of the currency that’s unfit for usage?

As soon as the ripped 5 dollar bill is identified, it is out of common circulation. There are different outcomes for the cash; for instance, if it goes to St. Louis Reserve Bank, it is recycled or transformed as compost. In 2018, the Federal Reserve Bank of St. Louis removed notes, i.e., several 154 million from the circulating cycle.

What if my money is burnt or deteriorated?

Such a situation can arise for any reason; it might be a fire, it might be due to getting sunk and left in water for a long while, or it might just have no explanation. But despite these issues, a common problem that persists is the fact that there is no security or identity to identify the note’s originality. As a result, it is a ‘mutilated’ form of currency, and the Federal Reserve Bank won’t accept any such form of money from banks operating commercially.

For this money to be accepted, a precisely detailed examination is conducted by the pros working at the Bureau of Engraving and Printing for any identification marks left. If your money is mutilated, you should get in touch with the BEP and understand the procedure in detail from them, as well as knowing the process to register a mutilated currency claim. They then evaluate the damaged note with their unique tool to find its actual value. Once done, if approved, you’ll have the value of it back.

The agency takes care of over thirty thousand claims like these every year and takes out a whopping $30 million just in the name of mutilated currency.

What if my currency got dipped in chemicals or turned moldy?

In that case, your cash is referred to as ‘contaminated’ and is only considered to be exchanged if there is an existing value. This is because there might be a safety or health risk associated with such notes and can be spoilt due to the high presence of moisture, being around sewage/animal waste, or being exposed to a chemical capable of rotting it.

In another case that doesn’t happen too frequently, the Federal Reserve Banks consider floods also one of the reasons behind the contamination of banknotes, since the water is filled with different kinds of elements.

What do I do if something like this happens to my cash?

Just in this situation, you’re meant to be visiting the nearest local commercial bank to try to get it exchanged. So provide them with the best of information for them to understand the reason behind it. Furthermore, please call to know the procedure in detail from them.

Once the dirty money is approved for exchange, it is sent to the Federal Reserve Bank, which also doesn’t recycle it due to the number of chemicals. So its only outcome is to be disposed of somewhere safe to avoid contact with humans.

How long does money remain in circulation?

Cash is a final creation of 75 percent cotton and 25 percent linen, and a dollar bill is undoubtedly meant to be lasting for a long time looking at its constituents. But, this is not the influencing factor in circulation; it all functions based on the note’s value.

There might also be a significant difference between the life of a $5 bill and a $100 bill. The Governor of the Federal Reserve Bank says this is because of the lower amount of circulation of an enormous bill compared to smaller ones.


The next time, don’t keep wondering what you do with torn money, and follow these points mentioned above to get it exchanged (note: hold the condition of your cash in mind). It is essential to have access to cash that is safe to use in more challenging situations. For instance, Hurricane Katrina left people without light for a long time, with zero possibilities to use ATMs.

The St. Louis Federal Reserve Bank’s branch at Memphis played a significant role in keeping the economy flowing in these dire times and gave people the opportunity to get the necessities of life.



Igor has been a trader since 2007. Currently, Igor works for several prop trading companies. He is an expert in financial niche, long-term trading, and weekly technical levels. The primary field of Igor's research is the application of machine learning in algorithmic trading. Education: Computer Engineering and Ph.D. in machine learning. Igor regularly publishes trading-related videos on the Fxigor Youtube channel. To contact Igor write on: igor@forex.in.rs

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