USD Bank notes rejected for cosmetics

[longway]

Why do Banks and Money Changers reject USD bank notes with VERY minor blemishes? I understand looking out for counterfit bills is important but it's not supposed to be a beauty contest. All agree these notes are good (not counterfit) and worth what their face value states but because of a slight crease or an almost invisible blemish will not be accepted as legal tender. I've watched the agents examine the individual bills and it looks ridicules. If PH money was graded the same way virtually all of it would be worthless. Does anyone know the logic behind this practice?

[Kingpin]

4 hours ago, longway said:

Does anyone know the logic behind this practice?

"Logic"? Wrong country.

[Joey G]

7 hours ago, longway said:

Does anyone know the logic behind this practice?

A few things have changed.  At one time USD's were sometimes used even between businesses (and people) when it was convenient.  A lot of USD's used to float around in commerce. Not so much going on any more if at all.  With the advent of plastic and phone charges... foreign currency is a PITA for banks.... and must be wrapped/packaged almost perfectly for banks to accept it for international currency exchange. 

If you think this is bad go to Europe and see what they charge to exchange USD... they don't want them... and the fee's are exorbitant.

 

 

 

[BrettGC]

I wonder if it would be different if the US adopted polymer bank notes?  Or is it just a sign of change in general?

[longway]

21 hours ago, Joey G said:

 

If you think this is bad go to Europe and see what they charge to exchange USD... they don't want them... and the fee's are exorbitant.

Do the Phi banks give the same scrutiny to notes from other countries? ie. British Pounds, Aussie dollars, Korean notes, etc. ?

 

 

 

[hk blues]

1 hour ago, longway said:

 

I've only exchanged HK dollars and GBP here one time each - the notes were in good condition but far from pristine but I got them changed no issue.  Both were in SM City forex though so maybe they are less strict than banks.

[JJReyes]

Banknotes will be exchanged by US banks on behalf of their customers with a clearing house under certain conditions.  One requirement is each note must be at least 50% or 60% intact.  The example would be notes partially eaten by termites.  These are eventually burned and replaced by a Federal Reserve bank.  I believe the Philippines uses a clearing house located in Hong Kong and redistributed to other countries in the region as requested.  It seldom makes it back to the United States.  For this reason, they want pristine notes.  Otherwise, the bank has to ship it to the United States which is an expense to be avoided.  You have airfreight charges, insurance, special handling, etc.  

Years ago, while working as a consultant for the Bangko Sentrale, we were shown the destruction process for old currency.  Staff at the counting room wore masks, goggles, protective clothes and rubber gloves.  The reason is mold in some of the old banknotes.  Two holes are drilled into each bundle.  Armored trucks are used to transport them to an incinerator facility in Quezon City which is also the location for the printing of new banknotes.  Each step requires certification by two officials.  

[Kingpin]

2 hours ago, JJReyes said:

while working as a consultant for the Bangko Sentrale

Maybe you can answer this: The BSP buys and sells gold...except the Visayas branch. Any idea why?

Edited August 1, 2023 by Kingpin

[JJReyes]

No.  The consulting work with BSP was a time period before we left the Philippines right after the assassination of Ninoy Aquino.