Mutilated Currency: How US Damaged Bill Redemption Works

Worn vs. mutilated: which one is yours?

The first decision is purely a categorization question. The federal government draws a line between "worn" and "mutilated" currency, and each category has a different redemption channel.

• Worn (or "unfit") currency: Notes that are dirty, faded, limp, or torn but still clearly identifiable as a specific denomination, with most of the bill present and recognizable. These can be exchanged at almost any bank or credit union for new notes of equal face value.
• Mutilated currency: Notes that are damaged badly enough that you cannot easily verify their value just by looking — for example, charred, fused, partially destroyed, or fragmented bills. These must be evaluated by the Bureau of Engraving and Printing's Mutilated Currency Division, not by a bank.

A useful rule of thumb: if you can hand the bill to a cashier and they can clearly see the denomination and security features, it's worn. If a cashier wouldn't accept it because they can't tell what it is, it's mutilated.

Worn currency: the bank route

For worn but identifiable bills, the simplest path is your own bank. Banks routinely send unfit currency back to the Federal Reserve in exchange for fresh notes, and they pass that exchange through to customers as a normal transaction. You generally don't need to fill out a special form for a few worn bills — you just deposit or exchange them like any other cash.

If a business refuses a worn but legitimate bill, your bank or credit union is the next stop. Branches occasionally treat very large quantities or unusually damaged notes as a special case, but for most everyday situations the swap is unremarkable.

Mutilated currency: the BEP claim route

For seriously damaged currency, the right destination is the Bureau of Engraving and Printing's Mutilated Currency Division. The BEP examines damaged notes, determines how much can be authenticated as US currency, and reimburses the claimant for the recovered value. There is no fee for this service.

To qualify for redemption, more than half of an original note must generally be identifiable as US currency. If less than half is present, the BEP will accept the claim only if the remaining portion can be clearly proven to be the surviving part of a single note rather than potentially two halves of two notes. The proof requirement is strict because it prevents people from sending in halves of two different bills and claiming the value of two whole bills.

What counts as mutilated

The BEP's process is designed for situations where bills cannot be identified at a glance. Common examples include:

• Currency damaged in a house fire — charred, melted, or fused into a brittle stack.
• Bills recovered from flood or sewer water and now decomposing.
• Notes accidentally washed and dried, then torn into fragments.
• Currency partially eaten or destroyed by rodents, insects, or pets.
• Bills buried for long periods and recovered with significant decay.
• Notes damaged in vehicle accidents, explosions, or industrial mishaps.

If your bill simply has a tear, a stain, ink markings, or a corner missing but is otherwise intact, that is still worn currency, not mutilated currency, and the bank route applies.

How to package a mutilated currency claim

The BEP publishes specific packaging instructions so that fragile, fragmented currency arrives intact and can be evaluated. The general approach is:

1. Do not tape, glue, or clean the notes. Adhesives and cleaning agents make examination harder and can destroy authentication evidence.
2. Preserve the existing arrangement. If burned bills are stacked together, leave the stack as-is. If fragments are wedged in a container, send the container.
3. Use a rigid outer container. A box rather than a flexible envelope helps prevent further damage in transit.
4. Cushion fragile material with cotton or soft padding, not foam peanuts or shredded paper that could mix with the fragments.
5. Include a written cover letter with your name, contact information, an estimated face value, and a brief description of how the damage occurred.
6. Provide bank account information for direct deposit if you want to receive payment electronically. Otherwise, the BEP issues payment by Treasury check.
7. Send the claim through a trackable, insured mail service. The package is ultimately at your risk until it arrives.

Always confirm the current submission address and procedural requirements directly on the BEP's official website before mailing. Government addresses and forms can change, and the official source is authoritative.

What to expect after submitting

Mutilated currency examinations take time. The BEP receives a large volume of claims, especially after major fires or floods, and processing can stretch from several months to a year or longer depending on the backlog and the complexity of the claim. Examiners must physically inspect each note, identify denomination and series details, and confirm authenticity before approving payment.

If the claim is straightforward and the BEP can authenticate the recovered value, you receive payment for the verified amount. If portions of the submission cannot be authenticated — for example, fragments that don't clearly belong to identifiable notes — those amounts are excluded from the payment.

Common mistakes that delay claims

• Cleaning the currency before submission. Even gentle cleaning can wash away ink and security features that examiners need to see.
• Trying to "reassemble" fragments with tape. Adhesives are removed during examination and can pull off ink in the process.
• Sending charred currency loose in an envelope. Pieces grind against each other in transit and arrive as dust.
• Forgetting to include contact information. The BEP cannot return payment if it cannot identify the claimant.
• Submitting only worn currency to the BEP. The BEP is for mutilated cases; routine swaps belong at a bank and will not be processed faster by going federal.
• Mixing fragments from different incidents. Separate claims are easier to evaluate and reduce the chance of disputes about which fragments belong to which note.

Mutilated collectible notes

One important caveat: if you suspect a damaged bill is a collectible — for example, a historic $500 note or an early $2 bill with a red seal — submitting it to the BEP for face-value redemption may not be the right move. Collectible notes can be worth more than face value even in damaged condition, and a partial bill could still be of interest to specialty buyers. Before sending anything in, photograph the note thoroughly, check the series and seal color, and consider asking a reputable currency dealer or grading service for an opinion. The history of US paper money is a useful starting point for identifying older note types.

Decision checklist

1. Can a cashier identify the denomination at a glance? Yes → bank exchange.
2. Is more than half the original note clearly present and identifiable? Yes, but heavily damaged → BEP claim.
3. Is less than half present? BEP claim with strong evidence that the fragment is the only surviving piece of a single note.
4. Could the note be a historic or collectible issue? Pause and check before submitting for face value.

If you're unsure which path applies, asking your bank first costs nothing. They can usually tell you within seconds whether they'll handle the swap or whether the note needs to go to the BEP. For broader background on how the BEP fits into the US currency system, see our resources page.