Have you ever wondered what to do with a torn banknote? Do retailers legally have to accept damaged money? And how can you get your money back for worn or damaged banknotes?
The Reserve Bank of Australia (RBA) has a policy of removing damaged banknotes from circulation. A banknote which is damaged enough to be removed from circulation is classified as ‘unfit’. You can download the RBA’s Banknote Sorting Guide here.
This image gives a general overview of a banknote which would be classed as ‘unfit’, but which can continue to be used until the RBA pulls it out of circulation. Banknotes in this category are worth their full value.
Incomplete banknotes have significant pieces missing. They are not always worth their full value, as the RBA has to assume that both pieces could be presented for value separately. If less than 20 per cent of the banknote is missing, you can swap it at a bank for the full value. If between 20 and 80 per cent of the banknote is missing, the value of the banknote is in proportion to how much is left – e.g. half a $10 note would be worth $5. Anything less than 20 per cent of a banknote is worth nothing.
You are under no legal obligation to accept a damaged banknote, either as payment or change. Be wary of accepting damaged banknotes, as they are not always worth their full value.