In an effort to enhance the security of the U.S. monetary system, the Bureau of Engraving, the Secret Service, and the Advanced Counterfeit Deterrence (ACD) Steering Committee have launched an initiative to prevent stores, merchants, banks, and ATMs from accepting certain banknotes.
What is Happening?
In 2025, U.S. stores such as Costco, Walmart, Dollar Tree, and Target will no longer accept certain types of dollar bills. The reason for this change is to improve the security measures against counterfeit money. These bills will be rejected if they fall into the category of “mutilated”—meaning they are torn, discolored, or have damaged edges.
Understanding “Mutilated” Dollar Bills
Dollar bills are considered “mutilated” if they show significant damage, such as:
- Cuts
- Torn edges
- Discoloration
According to the U.S. Federal Reserve, mutilated bills may result from various factors like fire, misuse, or natural deterioration such as burying money. Once these bills fall into this category, they will no longer be accepted by major retailers and financial institutions.
What Can You Do with “Mutilated” Dollar Bills?
If you have a mutilated bill, you will need to contact the Bureau of Engraving and Printing directly. Here’s how:
- File a mutilated currency claim.
- The BEP will examine the bill using special tools to assess authenticity and determine its full value.
- Once the assessment is complete, they will issue a check to you for the evaluated amount.
New Security Measures
In addition to rejecting mutilated bills, the Federal Reserve will introduce new designs for several dollar denominations:
- $5 bill (2028)
- $20 bill (2030)
- $50 bill (2032–2035)
- $100 bill (2034–2038)
These new designs aim to enhance security with advanced features like watermarks, security threads, and more advanced counterfeit detection tools.
Detecting Counterfeit Banknotes
To ensure your dollar bill is genuine, experts suggest checking for these features:
- Light-resistant security thread with the inscription “USA”
- 3D security strip that shifts when tilting the bill
- Color-shifting ink in the lower right corner
- Watermark visible when observing the bill against light
- Microprints around the bill
- Embossed printing providing texture
FAQ’s
Can I still use mutilated bills at banks?
No, mutilated bills will not be accepted by banks or stores like Costco, Walmart, or Dollar Tree.
What should I do if my dollar bill gets damaged?
File a claim with the Bureau of Engraving and Printing by following their step-by-step guide.
Will all old dollar bills be rejected?
No, only those that are mutilated will be rejected starting 2025.