I turned my back for one second, and Rocco (African Grey Parrot) grabbed some cash and began shredding.
I assume I could take this to my bank and trade it in, but is it legal tender at a store?
If you can get a store to accept it, sure. But they don’t have to if it’s damaged to any serious degree. If there is 51% of the bill intact, you can get it replaced at just about any bank.
DO NOT ATTEMPT TO SPEND IT! It is a felony to pass mutilated currency.
PM me and I’ll give you the address to send the worthless paper to where it will be incinerated. Sort of.
Or yeah, take it to a bank and they’ll replace it.
I had a parrot who, in one unsupervised half hour, reduced a wooden mirror frame to matchsticks, and shredded a half dozen hardback books, including my first edition Silmarillion.
Or, if you want, you can send in the currency to a group within the Bureau of Engraving and Printing. They see this (and worse) all day long.
See if the store will take it. They don’t have to give it to anyone else with their change, but they can put it in with their bank deposit and the bank will take it from there.
Don’t try to spend it. Cashiers don’t need to deal with it and get yelled at by idiot managers.
Take it to a bank. Any bank. They know how to deal with it and it gets collected for return to the Federal Reserve.
I used to work armored, picking up from banks, and every now and then we’d pick up small bags of mutilated or counterfeit currency from whatever centralized location their area banks sent them to. For example, US Banks sent it all to one bank downtown just a couple of blocks from the federal reserve and since they were on our route, we picked it up and then transferred it to our regular FRB route truck.
(We used to service an ATM in the FRB a couple of times a year, since it was within our route, but we never picked up and delivered cash there.)
I had a bank refuse to accept a torn bill because all 4 corners weren’t there. I didn’t have all the pieces. I still have the bill - I am planning to try another bank.
This. I’ve used bills more damaged than that and other than maybe an odd look or two never had any issue. If I have several or higher denomination or odd-ball stuff (like a pile of $2 bills — don’t ask; I have an interesting life) I will usually hit a bank. But for one fiver or even say 4 of them? Just put them in my wallet and spend them first.
Well, my bank was happy to help me, but it took a long time. The exchange took seconds, but then the tellers gathered around (small town bank, I was the only customer) to tell stories about weird currency damage. I also had to pay the pet picture tax.
That looks like pretty minor damage compared to some of what the government is willing to work with.
There was a podcast episode a while ago about Mutilated Currency Division: Episode 781: The Money Fixers : Planet Money : NPR
That bill seems trivially damaged in comparison.
I hope you broke the bird of that hobbit afterwards!
Yep, that’s what my store does - mutilated bills, shredded bills, once bills that appeared to have bloodstains…
And yes, that’s a possibility - that doesn’t happen at my store, but it certainly could at others (I’ve also heard stories about cashiers being yelled at for accepting $2 bills and dollar coin. Again, not a problem at the store I work at, but some people are indeed idiots).
Rocco is usually very well behaved, but he’ll sporadically exhibit his mischievous side. He once flew over and picked up a very nice, $125 glass pipe. Bastard knew it was my favorite. When I tried to take it from him he flew across the room. And he repeated that until I begged him to give it back. Once I begged, he was cool, gave it back gently. 
Dude, the bird was telling you he just wanted a toke too!
Anything is, if the store agrees to accept it.
As I recall, the treasury (via a bank) will exchange for you any bill that has a part of both serial numbers. If you have a bill torn in half, you need both halves with matching serial numbers showing. That is to keep you from turning in a half a bill for a dollar and going back the next day with the other half.
Theoretically, you can snip out the two numbers onto narrow strips, and turn them in for a new bill, because there is nothing left behind that can be redeemed… Conversely, a fresh new bill with the serial numbers surgically removed cannot be redeemed.
Howevere, it IS a criminal offense to intentionally or negligently deface or mutilate money, so you better have a good cover story for the bank manager. They might want to see the parrot.
I thought it was illegal to refuse U.S. legal tender (i.e. dollar coins and $2 bills). There’s several stories of people buying cars with pennies, but I recall some business refusing payment in small change.
Also, I think that at least two of the corners of damaged currency be be present, though it’s not specified here:http://bep.gov/services/currencyredemption.html
"Services
Redeem Mutilated Currency
The BEP redeems mutilated currency as a free public service. Lawful holders of mutilated currency may receive a redemption at full value when:
Mutilated currency is currency which has been damaged to the extent that:
Its condition is such that its value is questionable and the currency must be forwarded to the Bureau of Engraving and Printing for examination by trained experts before any redemption is made. One example of mutilated currency may be bills missing relevant security features.
Currency can become mutilated in any number of ways. The most common causes are: fire, water, chemicals, and explosives; animal, insect, or rodent damage; and petrification or deterioration by burying.
Free Public Service
Clearly more than 50 percent of a note identifiable as United States currency is present, along with sufficient remnants of any relevant security feature and clearly more than one-half of the original note remains; or,
Fifty percent or less of a note identifiable as United States currency is present and the method of mutilation and supporting evidence demonstrate to the satisfaction of the Treasury that the missing portions have been totally destroyed.
Every year the Treasury Department handles approximately 30,000 claims and redeems mutilated currency valued at over $30 million. Your money is important. However, please know that heavy volume and the precise nature of the work may result in lengthy wait times. Please follow the submission instructions carefully to help us process your claim in the most efficient manner."
It is not illegal for a business to refuse certain currency or coin as payment, as you are not selling a debt with them. They are free to set their own policies for accepting cash. They can refuse to accept large bills or ridiculous amounts of small change.
If you owe back taxes, and want to pay it with pennies, that’s a different matter.