Yeah, now that kind of makes sense for the buyers. And I guess the seller converts his cash into paypal money he can spend online. If he can sell enough to one buyer (as per your example), he would make all of 25 cents on the deal. 
It’s the ridiculousness of the proposal that makes it perfect for the larger covert transaction it facilitates. Nobody with any sense will buy a noncollectible bill for more than its face value, so unintended participants are rare.
I have the hardware to effect a particular purpose, but I am less skilled than my pal “Snuffy” in determining several critical inputs to use that hardware to optimal effect. So Snuffy does his thing and places his work product someplace in the real world or on the web. Anyone who casually stumbles across that work product wouldn’t know what to make of it unless they knew what it was and how to access it. Now, the enterprise in question is “dodgy” by federal legal standards, so for security purposes members of the organization never meet or correspond directly. What we need is a way to connect dots and to place and retrieve work product.
Enter the simple dollar bill and its serial number. We just snake an ordinary bill, use all or part of the serial number, or some other feature unique to this bill (torn corner, deep wrinkle, random doodle, etc.), as the seed to an algorithm that can in turn be used to locate an object, generate/assemble a password, or develop target coordinates. It’s a fairly common mechanism for secretive communication, and it can be incredibly complex, especially if there is corresponding hardcopy that can expand the meaning of a given symbol in a given position in the bill’s serial number.
Uh-huh.