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There's no mistaking a new dollar bill: the crispness, the clean feel, the smooth surface. But it doesn't take long for that dollar bill to start showing its wear and tear. Although the U.S. Currency Education Program states that a $1 bill can remain in circulation for as long as five years, while a $100 bill can remain usable for about 15 years, each currency becomes damaged over time.

But what does it take for a piece of currency to become so damaged that it needs to be taken out of circulation? The Bureau of Engraving and Printing (BEP) has specific guidelines that let you know when cash has become too damaged to remain in circulation and how it should be removed.

Not uncommon
Most people have seen and handled damaged currency. It might involve merely a small tear but it could also include a missing corner or even a bill that's been torn in half. In many cases, these imperfections are either a non-issue or easily remedied. A bill with a torn corner is still acceptable and a torn bill can simply be taped back together and used.

In fact, according to Money magazine, a bill that is at least three-quarters intact can be taken to the bank and exchanged for an undamaged dollar bill. The only restriction is that the serial number on both sides must match

But there are occasions where the money has been severely damaged and requires a special procedure to exchange and replace. It's a situation that the Bureau of Engraving and Printing works with annually. In fact, the BEP says it deals with approximately 30,000 claims for damaged money per year, totaling approximately $30 million.

What is damaged money?
The BEPs official classification of mutilated currency is:

"Its condition is such that its value is questionable and the currency must be forwarded to the Bureau of Engraving and Printing for examination by trained experts before any redemption is made. One example of mutilated currency may be bills missing relevant security features."

According to the agency, paper currency can be mutilated and destroyed in a number of ways. The most common forms of currency damage, according to the BEP, are water, fire, chemicals, insects, animals/rodents, deterioration through burying, petrification and explosives.

While bills that are at least three-quarters intact can be taken to a bank and exchanged for replacements, paper currency with more damage than that must be sent to the BEP. The bureau will issue new bills for currency that is:

1. At least 50 percent identifiable as U.S. currency, accompanied by a sufficient percentage of the remains of any key currency security features and at least half of the original currency or,
2. At least 50 percent of the note must be recognized as U.S. currency, accompanied by a note explaining the method of mutilation and evidence that supports the explanation that meets the Treasury Department's satisfaction.

The BEP currency replacement program is free to the public and the currency can be mailed or hand-delivered to the BEP.

Mutilated or damaged currency can slow down a business and lower efficiency. A cash counter like the Cummins Allison JetScan iFX® i200 currency counter and scanner not only counts bills at a rate of 1,200 per minute but clears jams caused by damaged bills quickly and easily so that you can keep your operations moving. The damaged bills are sorted for easy separation to help businesses stay organized.