Buy a $100 Bill for $90

This sounds like a scam right? Well, it’s happening. The Wall Street Journal published an interesting article today about the discount placed on certain bills based of age, condition, and even the signature on the bill.

In many countries, from Russia to Singapore, the dollar’s value depends not just on global economic forces that move international currency markets, but also on the age, condition and denomination of the bills themselves. Some money changers and banks worry that big U.S. notes are counterfeit. Some can’t be bothered to deal with small bills. Some don’t want to take the risk that they won’t be able to pass old or damaged bills onto the next person. And some just don’t like the looks of them.

Even hotels discriminate against certain bills:

The Stella Matutina Lodge in Goma, Democratic Republic of Congo, accepts 2001 series C-notes — the ones with Treasury Secretary Paul H. O’Neill’s signature — but says they’re only worth $90. The hotel accepts the 2003 Snow bills at face value.

Notes have always been discounted for various reasons. Before the United States had one currency, prices of notes from banks of different cities were published in local papers. The discounting there however was generally due to the transportation of the currency. A note from the Bank of New Orleans would not be worth as much in Chicago as it would in New Orleans. Interesting to see this factor combined with counterfeiting still plays a role in money.