When is an error or damaged coin not legal tender?

Zoins

A bill is no longer legal tender when it doesn't have both serial numbers, and may be for a host of other reasons.

What reasons will make a coin no longer legal tender from a damage or error perspective?

For example, does a coin need a denomination?

Slab photos by mrcpacasper.

Namvet69

Me thinks it's when the issuing entity demonitizes it. Peace Roy

TurtleCat

My recollection is that a coin is not legal tender when either the government declares it through law or when it is so worn as to be unrecognizable as anything but a metal disc. Although that last part might be more practical than specifically legal.

Zoins

@Namvet69 said:
Me thinks it's when the issuing entity demonitizes it. Peace Roy

That doesn't seem to be the way it works for bills.

TurtleCat

@Zoins said:

@Namvet69 said:
Me thinks it's when the issuing entity demonitizes it. Peace Roy

That doesn't seem to be the way it works for bills.

They don’t need to be the same.

Namvet69

@Zoins Didn't Canada just do that with a series of banknotes?

Zoins

@TurtleCat said:

@Zoins said:

@Namvet69 said:
Me thinks it's when the issuing entity demonitizes it. Peace Roy

That doesn't seem to be the way it works for bills.

They don’t need to be the same.

I didn't say they did. I'm wondering if there's something like that for coins for damage, as opposed to demonitization.

Zoins

Here's some info.

Bent and partial coins are not legal tender and cannot be redeemed for face value, only bullion value.

So a lot of plugged classic coins are no longer legal tender, just valued at intrinsic bullion value by the US government. I'm guessing holed coins aren't legal tender.

I wonder of "punched" here would mean that counterstamped and chop marked coins are also not legal tender?

Coin Procedures

Bent or partial coin is coin that has been bent or twisted out of shape, punched, clipped, plugged, fused, or defaced, but that can be identified as to genuineness and denomination. Bent or partial coin is not redeemable at face value; it is redeemable only at its bullion (metal) value as established by the Director of the U.S. Mint.

The Federal Reserve DOES NOT accept deposits of bent or partial coin.

Bent or partial coin must be sent to the U.S. Mint. You must complete a mutilated coin submission application prior to shipping the coin. For information on the submission application, including the shipping instructions, refer to the U.S. Mint’s Redemption Program Instructions (Off-site).

If you believe the coin has been contaminated, please refer to the Contaminated Coin section for information on decontaminating the coin. The Federal Reserve does not accept deposits of Contaminated Coin.

For more information about FedCash Services processing and operations, visit the FedCash pages or consult your local FedCash Services contact.

https://www.frbservices.org/resources/financial-services/cash/exception-processing/mutilated-currency-coin.html

CalifornianKing

Effectively speaking, it's demonitized when the goverment passes a bill saying it is. Also when it becomes so rare, that it does not go into circulation (think seated/barber coinage).

Zoins

Some of the discussion has been about demonitization which wasn't my intent.

My intent is to discuss error damaged coins.

This may have been my issue as this was mentioned more in the body than the title of the OP so I've modified the title.

Perhaps people didn't notice there's no denomination on the nickel?

jmlanzaf

@CalifornianKing said:
Effectively speaking, it's demonitized when the goverment passes a bill saying it is. Also when it becomes so rare, that it does not go into circulation (think seated/barber coinage).

That's not what he's referring to. He's asking (see above reference) if there is any law ALREADY PASSED that limits the legal tender status of damaged or defaced coins.

He's not asking about the government's ability to demonetize an entire currency or specific issue.

Zoins

Here's the official US Mint page referenced above but which has a broken link in the article now:

https://www.usmint.gov/news/consumer-alerts/mutilated-coin-program

CalifornianKing

@jmlanzaf said:

@CalifornianKing said:
Effectively speaking, it's demonitized when the goverment passes a bill saying it is. Also when it becomes so rare, that it does not go into circulation (think seated/barber coinage).

That's not what he's referring to. He's asking (see above reference) if there is any law ALREADY PASSED that limits the legal tender status of damaged or defaced coins.

He's not asking about the government's ability to demonetize an entire currency or specific issue.

In that case, disregard what I said.

JBK

Damaged coins are worth bullion value. Hmmmm.

It is illegal to melt copper cents but not elongate or otherwise deface them. But, they are no longer redeemable at face value, only bullion value, which is higher than face value.

PerryHall

US gold coins lost their legal tender status when their weight dropped below a certain point due to loss from circulation wear. I believe it's 2% but I'm not sure what the exact number is.

derryb

Legal tender until the other party will not accept it in its current condition or whenever is removed from service.

JMS1223

I once had a bent quarter (I found it on the street) among other coins and the bank would not accept the quarter for deposit. They accepted all the other non-bent coins including a cent that was worn down where zinc was exposed but still recognizable as a US cent. The bent quarter was not accepted on grounds that it could not properly fit in a coin roll.

dcarr

@Zoins said:

Bent and partial coins are not legal tender and cannot be redeemed for face value, only bullion value.

I don't think that is accurate. The US Mint's mutilated coin redemption program does not work off of "bullion value". For one thing, they specifically don't redeem silver or gold coins in this program. Nickel, copper, and bronze are not considered bullion.

To submit coins to be redeemed, they must be separated by denomination. When the US Mint receives them, they do not count the coins. The coins are judged for authenticity and then each denomination is weighed in total. Based on an average weight per typical genuine coin, the number of coins is inferred, and the payout is based on the total face value of that many coins

So in this manner, for example, a lump of one-cent coins fused together in a fire can be redeemed by estimating the number of coins and total face value contained in the lump.

MsMorrisine

@dcarr said:

So in this manner, for example, a lump of one-cent coins fused together in a fire can be redeemed by estimating the number of coins and total face value contained in the lump.

they didn't take fused coins.

ricko

@Zoins... Interesting question and thanks for the link.... Always good to have the documentation. Cheers, RickO

LanceNewmanOCC

@Zoins said:
Some of the discussion has been about demonitization which wasn't my intent.

My intent is to discuss error damaged coins.

This may have been my issue as this was mentioned more in the body than the title of the OP so I've modified >the title.

perhaps redeemable is more about what you are asking. if that is the official word that is used when taking coins and/or currency into an agency legally permitted to collect USA monies on behalf of the fed/gov.

Perhaps people didn't notice there's no denomination on the nickel?

i did. found them in buckets of nickels before but i'm late to the party to have said anything.

i didn't read the thread only about 80% but right now a coin is deemed legal tender by anyone/business willing to accept it for a pre-agreed to amount since the fed isn't accepting any questionable coins.

so to answer the OP title question. "When is an error or damaged coin not legal tender?"

answer: when the government deems it to not be so at their leisure and the prerequisites and requirements can change without notice and unless your army is bigger than theirs...