🚀 go-pugleaf

>Today I tried to use a $5 bill at a merchant at work and they told me
>they couldn't accept it because their bank wouldn't accept it. Note:
>the bill was 3/4 complete. So I went downstairs to fifth third bank
>branch and they told me categorically that they couldn't exchange it
>unless the serial number (which is the same) was on both sides on the
>bill. Then I went into a National Bank branch across the street and
>asked the teller what I should do about this bill and she flat out told
>me that they couldn't accept it. Only when I explained my understanding
>of the law did the manager proceed to take the bill from me and
>exchange it without question and at no time did they explain why they
>initially refused the exchange.
>
>I told them that my understanding was that if the bill was > 50 percent
>complete that they are expected to exchange it.

A long time ago I thought the rules were:  2/3 or more you got the
full amount, 1/3 to 2/3 you got half, and less than 1/3 you got
nothing.  The key here is that you can't sometimes double your money
by cutting bills exactly in half and exchanging both halves.  (It
is possible to tear paper so 55% of one side and 45% of the other
side is visible, and the other half is the same.  I don't know if
bills will tear that way).  And you have to deal with the US Treasury
(directly) here; banks aren't required to do it.

Now it appears the rule is "clearly greater than 50%".
http://www.bep.ustreas.gov/section.cfm/8/39

>I was quite surprised that on this occassion a merchant (manager)
>didn't know the law and secondly that two banks at first tried to say
>they couldn't accept something that by law they are required to accept.

A merchant is only required to accept cash *in payment of a debt*.
The key word is *DEBT*.  If you were trying to pay your credit card
bill, they have to take (at least undamaged) cash because it's legal
tender.  If you brought an item you wanted to buy and some cash to
the checkout counter, they are not required to accept cash (undamaged
or not).

I don't know of any rules that are different for banks than other
merchants in this area.  I don't think banks are required to accept
cash as a deposit (and some Internet banks may not).

Would you want to accept something that you WEREN'T SURE you would
be able to get full value for?

My rule is that if I don't think it's going to work in a bill-changing
machine, I won't accept it.  That means if one corner is torn off
so I can't see any of the denomination in that corner, forget it.
I also won't accept it if it's obnoxious: e.g. has been sprayed by
a skunk, dipped in oil, or was fished out of a port-a-potty.  If you
clean it up then I might accept it.