Periodically, the United States revamps coin designs with the aim of improving security measures and counterfeiting possibilities. This proactive approach allows it to ensure the integrity of the U.S. dollar, but, in turn, raises questions about maintaining the validity of previous legal tender bills. It is critical to note that the previous series of $10 and $100 bills are still legal tender. The U.S. Treasury Department is not asking that the old bills be withdrawn from circulation just because the new ones are introduced. And the question we all ask ourselves: Do old banknotes still retain their full value, even with the introduction of new designs? Consequently, bills of the older series continue to maintain their full face value and are accepted in all transactions.
When $10 and $100 bills are withdrawn from circulation and criteria for recalling damaged currency
Withdrawing $10 or $100 bills from circulation is done primarily because of their poor condition; bills that are overused, torn, soiled or damaged to the point of being unfit for use are systematically withdrawn. This preserves currency in circulation in a reasonably good condition that allows for the fluidity of currency circulation.
Thus, the Federal Reserve defines as unfit bills that are:
- Disfigured.
- Dirty.
- Disintegrated.
- Flaccid.
- Torn.
- Worn.
Coins that become soiled, disfigured or worn due to the passage of time or misuse are usually removed from circulation by financial institutions and sent to the Federal Reserve for destruction and replacement. This process is done routinely and helps maintain the quality and integrity of U.S. currency.
When currency is badly debased, the Bureau of Engraving and Printing (BEP) has a mutilated currency redemption service. Mutilated currency includes bills that have been so destroyed that only half or less of the original bill remains, or the condition of such currency raises questions about its value. Typically, the causes are fire, water, chemicals or other calamities.
The BEP’s Mutilated Currency Division has a free mutilated currency evaluation and redemption service: individuals or institutions holding mutilated U.S. currency may submit a claim to the BEP for evaluation. The BEP will reimburse the full face value of the destroyed currency if the claim is honored.
How to file a mutilated coin claim through the BEP’s Mutilated Coin Division
To file a mutilated coin claim, follow the steps listed below:
- Do not handle the coin: Handle the damaged coin as little as possible to avoid further deterioration.
- Prepare documentation: Include a letter stating the estimated value of the coin and an explanation of how it was mutilated.
- Send the claim: Send the coin and documentation to the Mutilated Coin Division of the BEP (Federal Reserve).
The examination process can take six to 36 months, depending on the complexity of the case and the workload of the examiners.
Key points about damaged and mutilated currency: legal tender and replacement processes
- Old $10 and $100 bills: They remain legal tender and are not being withdrawn solely for new designs.
- Damaged currency: Notes unfit due to wear and tear are withdrawn from circulation by financial institutions.
- Mutilated Currency: Severely damaged bills may be redeemed through the Mutilated Currency Division of the BEP.
For more detailed information, see the Bureau of Engraving and Printing’s Mutilated Currency Redemption page. By staying informed about these processes, you can ensure your currency remains valid and know the proper steps to take if you find damaged or mutilated bills.
