For many years, the Federal Reserve Banks have influenced the quality of circulating currency by setting high standards for the used currency they return to circulation after fitness sorting. Since July 2004, the Federal Reserve has published fitness guidelines (PDF) for distinguishing between notes that are fit and unfit for further circulation, including visual examples to further support detection and sorting operations.
As new policies are enacted, and the Federal Reserve Banks continue to encourage recirculation of fit currency, we have refined these guidelines to reflect changing industry practices, technology, and the overall quality of currency in circulation. In addition, the Federal Reserve closely monitors the fitness of circulating currency to ensure the quality of circulating currency is maintained.
In light of current policies to recirculate fit $10 and $20 notes, depository institutions and other cash handlers are encouraged to use these guidelines to adjust sorting practices and/or work with equipment vendors and third-party service providers to make necessary adjustments in equipment to align with current guidelines. Ensuring your equipment is accurately calibrated may help your institution correctly identify fit versus unfit $10 and $20 notes, potentially avoiding assessment of cross-shipping fees. Visit the Currency Recirculation Policy section for additional details related to cross-shipping fees.