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Shop rejects $10 cash over ‘tiny’ detail

Shops are not obliged to accept damaged banknotes but that doesn’t mean the notes are worthless.

A Sydney bakery has rejected a customer’s $10 banknote because it had a “tiny tear” in it. While Aussies may run into trouble paying for things with torn bank notes, there are still ways to cash in.

Speaking to 2GB’s Chris O’Keefe, one listener revealed her mum had recently gone into her local bread shop in Ermington and tried to pay in cash. But her money was knocked back.

“She sent us a photo of it … The tear in the $10 note is tiny and I mean tiny,” O’Keefe said.

Torn $10 note
A Sydney bakery refused service to a customer who tried to pay with this torn $10 note. (Source: 2GB)

Another listener, Anthony, said a similar thing had happened to him when he tried to pay with a torn $5 note at a venue in Charing Cross.


“They wouldn’t take my $5 note because a tiny bit of the corner was missing and I actually had the corner in my hand but they wouldn’t take it, they refused to take it,” he said.

“I couldn’t buy anything. I just left because I was angry so I just walked out. I went down to the bakery down the road and they took it.”


Shops are not obliged to accept banknotes that are damaged, the Reserve Bank (RBA) says, either as payment or change. But the good news is the notes aren’t worthless.

The RBA looks after banknotes in Australia. It told Yahoo Finance that in the 2022-23 financial year, its damaged banknotes facility processed about 8,900 claims and paid out Aussies to the tune of $14.3 million.

The RBA recommends people take their damaged banknotes to their bank or other financial institution to get them exchanged.

The RBA aims to have only “good quality” banknotes in circulation. It has asked banks to remove any unfit banknotes (including ones with tears of any size or small missing pieces) from circulation.

Unfit $10 bank note
The RBA says banknotes that have become worn or have sustained minor damage as classified as "unfit". (Source: RBA)

If your banknote has a significant piece missing from it, you may not get back the full amount of the note.

Under the RBA’s policy, you can get the following back for “incomplete” banknotes:

  • Less than 20 per cent missing: Full face value

  • Between 20 and 80 per cent missing: Value in proportion to what is remaining, e.g. $5 for half a $10 note

  • If more than 80 per cent missing: Zero paid

The reason for this is because the RBA needs to take into account the possibility that pieces of the banknote may be presented for their value separately.

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