Every Australian has that one stray banknote floating around in our wallet that is just a bit too mangled for use.
Maybe it’s got a hole in the corner, or the ink has rubbed off, or it has been torn in two – and possibly stuck back together with tape in the hope a cashier or vending machine will take it.
But even cash that is ripped in half and legally unfit to use is still worth something, the Reserve Bank of Australia says.
In fact, the RBA will happily take any damaged, or “incomplete” bank notes off your hands and pay you for what that note is worth.
As for how much that is, it all depends on how bad the damage is.
The RBA’s policy is for the “value of each piece of a banknote to be proportional to the part of the banknote remaining”.
“In this way, the combined value paid for all the pieces presented should be the face value of the original banknote,” the bank said.
In short: if all you have is half a bank note, it is worth half of its value – as Nine News finance editor Chris Kohler explained in his TikTok video.
To lodge a claim for damaged money, all you need to do is return the cash to an authorised deposit taking institution (ADI) – a bank branch, credit union, or building society – where it will be assessed on a “grid” to determine how much it is worth.
If less than 20 per cent of the bank note is missing, the full value of the note is paid.
If between 20 and 80 per cent of the banknote is missing, the value is paid in proportion to the percentage missing – for instance, half of a $10 note is worth $5.
If more than 80 per cent of the note is missing, it is worthless.
“These banknotes may not be worth full value because the Reserve Bank needs to take into account the possibility that pieces of the banknote may be presented for value separately,” the RBA advises.
Claims can also be made directly to the RBA by delivering the contaminated bank notes in a sealed and labelled bag to your bank and completing a form explaining what happened to the money.
Australian TikTok users commented under Kohler’s TikTok video, seemingly none bar a few bank tellers knew about the RBA’s reimbursement system.
One former bank teller said returns happen “quite often”, that customers will get shiny new money on the spot if less than 20 per cent is missing, otherwise the bank will send it away.
“Yep, they’re called ‘mute’ notes,” another user, who said she worked at a bank, said.
“Just take it to a bank. We eventually send them back [to the RBA]. I’ve had shrunken (sic.) ironed notes come through the branch!”
The RBA says it has processed around 110,000 damaged banknotes between 2014 and 2021, and made around $44 million in payments.
The bank has dealt with notes that have gone mouldy, shrunk due to heat, experienced sun-damage, been accidentally boiled, and even notes damaged by ants.
It said the surrendered damaged money is shredded into tiny pieces and then put through a machine that turns it into plastic pellets to be recycled.
One TikTok userjoked it “puts a new meaning to splitting the bill”, and some said it would be an easy way to make quick change for larger notes.
“From now on if I don’t have change I’m cutting up [$]50s,” one user wrote.
But intentionally destroying an Australian bank note is illegal under the Crimes (Currency) Act 1981, and the punishment will cost way more than it is worth – a maximum fine of $5000 fine or two years in prison, or both.
The same punishment applies for anyone caught deliberately selling money that you know has been damaged under the Act.
The RBA wants to remove damaged notes from the system as soon as possible, to help prevent counterfeiting, as crisp and good quality money makes the dodgy, fake stuff easier to spot.
So fish out that completely useless, ripped up bill from a pocket at the back of your wallet and take it to your bank. Because what is the good of money in your pocket if you can’t even spend it?
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