Don’t Let Money Go to Waste: RBA Offers Refunds for Torn, Burnt, or Damaged Money

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Discover the surprising value hidden in your damaged Australian banknotes – even torn or incomplete – and how they could be worth more than you think.

Every Australian carries that one stray banknote in their wallet that’s slightly too damaged to use.

Perhaps it has a hole in the corner, faded ink, or even torn in two, with hopeful attempts to stick it back together using tape, hoping a cashier or vending machine will accept it.

However, the Reserve Bank of Australia (RBA) states that even cash ripped in half and legally unusable still holds value.

Turn Your Tattered Treasures Into Valuable Pieces—Rba’s “Money Math” Can Bring Worth Back To Your Torn Banknotes

The RBA gladly accepts any damaged or “incomplete” banknotes and compensates you for their worth.

The amount you receive depends on the extent of the damage.

According to the RBA’s policy, the value of each piece of a banknote is proportional to the remaining part.

“As such, the total amount disbursed for all the submitted fragments ought to correspond to the nominal worth of the initial banknote,” the bank said.

To claim compensation for damaged money, return it to an authorised deposit-taking institution (ADI), such as a bank branch, credit union, or building society.

The money will be evaluated on a “grid” to determine its worth.

If less than 20% of the banknote is missing, you’ll receive its total value.

For banknotes with 20% to 80% missing, the payment will be proportionate to the percentage missing. For example, half of a $10 note is worth $5. It becomes worthless if more than 80% of the note is missing.

The RBA advises that these banknotes may not be worth their total value due to the possibility of separate pieces being presented for compensation.

You can also claim directly to the RBA by delivering the contaminated banknotes in a sealed and labelled bag to your bank, along with a completed form explaining what happened to the money.

Banknote Redemption Goes Viral: Tiktokers Discover Hidden Value In Torn Bills, But Beware The Penalties!

Australian TikTok users, commenting on Chris Kohler’s TikTok video, revealed that only a few bank tellers were aware of the RBA’s reimbursement system.

A former bank teller mentioned that returns happen frequently. If less than 20% is missing, customers receive new money instantly, while the bank sends the rest away.

Another user, claiming to work at a bank, referred to them as “mute” notes and recommended taking them to a bank. They shared their experience of handling shrunken and ironed notes at the branch.

Between 2014 and 2021, the RBA processed around 110,000 damaged banknotes and made approximately $44 million in payments.

The bank has dealt with notes affected by mould, heat-induced shrinking, sun damage, accidental boiling, and even notes damaged by ants.

Surrendered damaged money is shredded into tiny pieces and then processed into plastic pellets for recycling.

A TikTok user humorously remarked that it “puts a new meaning to splitting the bill,” while others saw it as an easy way to get change for larger notes.

However, intentionally destroying an Australian banknote is illegal under the Crimes (Currency) Act 1981. Violators face a maximum penalty of a $5000 fine, two years in prison, or both.

The same punishment applies to those deliberately selling damaged money, knowing it is against the law.

The RBA aims to remove damaged notes from circulation promptly to prevent counterfeiting. Crisp and high-quality money makes it easier to spot counterfeit and fraudulent currency.

So, dig out that completely useless, ripped bill from the back pocket of your wallet and take it to your bank. After all, what good is money in your pocket if you can’t spend it?

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