Damaged Banknotes Policy
The Reserve Bank of Australia aims to have only good quality banknotes in circulation. This helps to maintain confidence in Australia's currency by making it easier for people to check the security features on banknotes and therefore more difficult for counterfeits to be passed or remain in circulation.
The Reserve Bank works with banks, other authorised deposit-taking institutions (ADIs) such as building societies and credit unions, and cash centre operators such as armoured car companies, to remove damaged banknotes from circulation as soon as practicable. The Reserve Bank provides a Banknote Sorting Guide to assist ADIs and cash centre operators in this process. It is not always possible to remove damaged banknotes from circulation immediately – nor is it necessary when the damage is only minor. Minor damage does not prevent ongoing use of a banknote or affect its value.
A genuine banknote that has become worn or sustained minor damage is classified as unfit. These banknotes can continue to be used and are worth full value.
Unfit banknotes may have some of the damage illustrated below:
To maintain the high quality of banknotes in circulation, the Reserve Bank has asked ADIs to remove from circulation any unfit banknotes that are returned by their customers.
A banknote with a significant piece missing is classified as incomplete. 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 Reserve Bank’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 value of incomplete banknotes is determined as follows:
|If less than 20 per cent of the banknote is missing:||Full face value is paid.|
|If between 20 and 80 per cent of the banknote is missing:||Value is paid in proportion with the percentage remaining, e.g. $5 value for half of a $10 banknote.|
|If more than 80 per cent of the banknote is missing:||No value is paid.|
The presence or absence of specific features such as a serial number does not affect the value. Because full face value is not paid on incomplete banknotes, care should be taken when accepting incomplete banknotes. There is no obligation to accept an incomplete banknote in payment or change.
Badly Damaged/Contaminated Banknotes
Badly damaged/contaminated banknotes have significant or unusual damage, such as:
- heat damage that prevents the verification of security features or affects 20 per cent or more of the banknote;
- significant damage that casts doubt on their value or genuineness; or
- contamination from substances that prevent handling (e.g. chemicals, blood, etc).
The Reserve Bank pays value for badly damaged/contaminated banknotes based on the visual presence of a banknote. If part of a banknote remains, the value is determined on the same basis as for incomplete banknotes.