How much of a paper bill can be torn off and still have the money remain legal tender? I tried to use a dollar with about 1/6 of it torn at the corner, both serial numbers intact and it was refused. Was this legal, or did they have to accept it?
Well, strictly speaking, the ubiquitous “they” don’t have to accept anything. A common disclaimer is the right to refuse service blah blah blah. Money is accepted based on common consensus to accept it, there’s no law that says you HAVE to. You could try to operate entirely on a barter system, if you wanted, or circulate your own currency. If you can get other people to go along with it, you have a functional economy. Good luck in that, but it’s possible.
Anyway.
Chances are, it still would’ve been acceptable, in a strictly legalist sense, but still not required to accept, if you can dig that distinction.
Well, this was at a seven-eleven. I am sure as a corporation they are required to accept all paper money since otherwise would open the door to rampant discrimination (will take paper money from whites but not blacks, for example). The question then is really at what degree of damage does paper money no longer become legal tender?
I worked at 7-11 for 8 years. We accepted any paper money with at least 3 corners intact. Where I now work, the policy is the same. I believe, however, that a bank will take virtually any bill, and simply exchange it for you, then send it to the BEP for destruction…
hrh
Nope. Lots of places (especially convenience stores after dark) refuse large bills–usually nothing larger than a fifty, occasionally nothing larger than a twenty.
The Secret Service (Part of the Treasury) says
Oh, duh. Didn’t see Joe Random’s post above. Don’t know how I missed it.
Don’t “they” have to accept it as legal tender on debts? Could I pay off my debts with bills that are 55% intact and be guaranteed that they’ll be accepted?
If I had had the change I would have left the exact amount with the torn dollar and let him call the cops on me. I think that the three corner rule is a good one. Unless someone takes scissors to a bill, one with three corners is guaranteed to be at least half there. Also, if only two corners are left you refuse it because you shouldn’t have clerks making judgement calls of how much is left. This bill was clearly nearly intact. Several things really pissed me off. First, I always go to this seven eleven. Most clerks know me on sight. Second, this one had just come off the boat and could barely speak english, and he is telling me he won’t accept my U.S. currency, and lastly, I think that if I was male he would have taken it. I think I will complain bitterly to management and explain why I will not stop at that particular store again.
In what way is this relevant?
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What makes you think so?
I appologize for taking my original GQ post and adding a little pit to it. After finding out that I was unquestionably right about the fact that he shouldn’t have given me a hard time my indignation got the best of me.
If it was the boat from India, this becomes more understandable. There is an enduring myth there that paper money with almost any amount of damage is valueless. There are currency traders who take in damaged notes and exchange for a smaller amount, more or less pro rata to the damage. They can then of course go toa bank and exchange the damaged note for an intact one at no charge.
Apparently the governmen has tried to eradicate the belief and the practise for some time without success.
You wouldn’t believe the trouble the government will go to to replace damaged money. The treasury has a department just for this. I saw a thing on TV showing some woman with tweezers picking through a badly burnt shoebox filled with money. Apparently some little old lady kept her savings in the shoe box and it burnt with the rest of her house. As long as the treasury person could piece together a complete serial number and some goodly portion of the second serial number on the bill along with an indiaction of the denomination they’d replace the bill. Talk about a nightmare jigsaw puzzle!
As such I think anyone would be safe accepting a bill that had both serial numbers intact and something indicating the denomination of the bill intact (the full number visible somewhere or the spelled out number). In practice the three corners is easiest to deal with and seems usual (from my days as a waiter this was the restaurant standard where I worked).
Andrew T.: I think the guy was from India, although it could have been Pakistan. At any rate, he was clearly not well oriented to how his job as cashier should be conducted.
To answer the first question, no. The fact that the bill is described as “legal tender” only indicates that it’s official US currency, printed and backed (to some extent) by the Federal Reserve. There’s no mandate, so far as I know, that states you have to accept Federal Reserve notes to satisfy “all debts, public and private.” As I stated before, you’re perfectly free to invent your own currency, say, “Bob scrip”, and distribute it. Whether or not anyone accepts it is another matter entirely. Any currency is valued by informal consensus.
That should answer your second question by itself. Since no one has to accept Federal Reserve notes (speaking from a purely legal perspective, and all private corporate policy aside), you’re not guaranteed a damned thing. Federal Reserve notes could, theoretically, become completely valueless tomorrow, solely because everyone, or most everyone, decided to stop accepting them. This is unlikely, so there’s no need to run out and put all your money in gold, or something, but theoretically possible nevertheless, whether the notes were horribly mutilated or fresh off the press.