Millions of New $100 Bills Defective? No, More Likely, It's Thousands

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New Hundred Dollar Bills for background
Alamy

(UPDATE AND CORRECTION:)

Turns out, the folks over at the Bureau of Printing and Engraving didn't "mash" things up in the run-up to the launch of the new $100 bill nearly as badly as had originally been reported.

The original version of this article referred to a report indicating that the government would need to destroy $3 billion in defective hundred-dollar bills. We, and other media outlets, brought news of that report to our readers. But, after speaking with representatives from the BPE, it's clear that the screw-up is on a much smaller scale, and only a tiny percentage of the returned bills will need to be destroyed.

According to a Bureau spokesperson, the "mashing" issue affecting the bills is actually fairly common, appearing in about 0.1 percent of all printed bills. Usually those bills are flagged for removal before being delivered to the Federal Reserve, but in this case, the normal quality control process failed for reasons unknown. Upon discovering that the shipment contained some defective bills, the Fed returned the entire batch to the Bureau for re-inspection.

The Bureau expects that upon re-inspection, the returned shipment of 30 million bills will be found to have the usual defect rate of 0.1 percent, and those bills will be removed; the rest will be returned to the Fed. Thus, the total number of bills expected to be destroyed is far lower than initially reported: By our math, around 30,000 bills, or $3 million worth, will need to be replaced. The cost of destroying and replacing these bills is likewise expected to be far lower than reported.

There's no doubt that the Bureau of Printing and Engraving has been facing some serious issues: The redesign project is well behind schedule, and Bureau representatives still don't know what caused this latest screw-up. But it now appears that the magnitude of this is far lower than initially reported, and we apologize for the error. While the re-inspection process will take some time, the Bureau says it still expects to hit its goal of putting the new bills into circulation by the fall.

The original article is below.

Government to Destroy $3 Billion in Defective New $100 Bills



Conservatives like to accuse the government of throwing money away, but in this case, it's literally true.

The New Yorker reports that the government's much-delayed project to introduce a redesigned hundred-dollar bill has run into another setback: About 30 million of the bills -- that's $3 billion in cash -- were found to be defective, and will have to be destroyed and reprinted.

According to the report, the Federal Reserve returned the bills to the Bureau of Engraving and Printing upon finding them to be "clearly unacceptable." The offending bills showed signs of "mashing" -- essentially, the lines weren't crisp enough.

It's unclear how the Bureau managed to print 30 million defective bills without noticing anything was amiss, especially if they were "clearly unacceptable." But it's going to be a costly error. The Atlantic Wire calculates that reprinting the bills will cost about $3.8 million, based on the fact that the new bills cost about 12 cents each to print.
(Bit of currency trivia for you: It costs about as much to print a $100 bill as it does to mint a nickel.) While that's only about 0.1 percent of the value of the defective money, it's still an embarrassing blunder. The cost to shred the defective bills, at least, is trivial: Around $18,000, based on the Atlantic's back-of-the-envelope calculations, and adjusting for inflation.

The redesigned Benjamin -- which boasts a 3D strip to combat counterfeiters -- was originally supposed to come out back in February 2011. But this is the second time it's been significantly delayed by a printing error. As Wired explains, as much as $110 billion worth of hundred-dollar bills were affected by an earlier glitch that caused a the bills to crease as they went through the presses, resulting in blank slivers on the face of the bills.

The latest screw-up doesn't just require the government to reprint millions of bills -- the New Yorker reports that the Bureau of Engraving and Printing also needs to inspect billions of dollars' worth of additional bills to determine the extent of the problem. And the Fed says it won't accept new shipments of hundreds until the problem is definitely fixed. The Bureau is now in a race to hit its Oct. 8 deadline for delivering the new bills.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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betty_brock

If you have had money stolen from your paycheck your entire working life (what your employer pays in is also YOUR money) thank a Dumbercrap.

August 15 2013 at 8:45 PM Report abuse rate up rate down Reply
T Rock

The BEP shipped the defective bills to the Federal Reserve and they were rejected at incoming inspection. The bills weren't "monetized" or sold to the US Treasury yet so they are only worth their cost to produce which is far less than face value. The Federal Reserve only pays pennies to print a bill (any denomination) so nobody is out $3 billion. The Fed is a private company, the BEP is a bureau of the government which sort of explains why they printed out 30 million bills before looking at one !

August 14 2013 at 2:45 PM Report abuse rate up rate down Reply
1 reply to T Rock's comment
setanta54s_back

thank U

August 14 2013 at 8:17 PM Report abuse rate up rate down Reply
Missy

The federal imperial government can't even print money to increase the national debt, without screwing up! obama already had all of that money spent, now what will he do? What will he do? Maybe he should look for another Treasury Secretary who didn't pay his income tax. You would think the criminal from Chicago would at least get printing us into more debt right!

August 14 2013 at 2:33 PM Report abuse +1 rate up rate down Reply
blackopsg3

I will take them if they dont want them

August 14 2013 at 2:29 PM Report abuse +2 rate up rate down Reply
teenagerinsac

Of course, these college educated dopes didn't know enough to CHECK the first few sheets before printing out 3 Billion worth of defective paper!

August 14 2013 at 2:26 PM Report abuse +1 rate up rate down Reply
YourFtr

In the Interest of excellently printed $100 Bills; Obama said that this would be "contracted" out to Iran; since they are Counter-feiting our hundred dollar bills already; in or der to buy centrifuges for their Nuclear Bombs.

August 14 2013 at 2:17 PM Report abuse +1 rate up rate down Reply
toosmart4u

If you are receiving a social security check and on medicare thank a democrat. If you want to end these two fine programs vote republican.

August 14 2013 at 2:00 PM Report abuse -2 rate up rate down Reply
1 reply to toosmart4u's comment
setanta54s_back

2smart sez
toosmart4u

If you are receiving a social security check and on medicare thank a democrat. If you want to end these two fine programs vote republican.
zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz
uuuuuuh HOW MANY TIMES will U post this sheiss ?

thank a diM ?
FOR WHAT ?
ALL THEY DO IS EMBEZZLE OUR HARD EARNED MONEY and WASTE IT ON ILLEGALS and other assorted BS programs and LOOT social insecurity.

yeah we THANK THEM daily and REMEMBER fdr and friends for ENSLAVING NOT ONLY EASTERN EUROPE
BUT
THE AMERICANS AS WELL VIA THIS MANDATORY CRAPPPPPOLA

August 14 2013 at 8:22 PM Report abuse rate up rate down Reply
rankincap

I think they should sell it collectors and auction it off,,, each $100 bill would bring a windfall. Just say a limited edition,,, but not good currancy...

August 14 2013 at 1:59 PM Report abuse rate up rate down Reply
jhiggins1123

Well, since it was still uncut sheets of uncirculated bills it wasnt 3 billion dollars. I was probably a couple thousand dollars worth of special paper and ink thats used to print them.

And just a show of more incompetence of the U.S Government

August 14 2013 at 1:55 PM Report abuse +1 rate up rate down Reply
2 replies to jhiggins1123's comment
Sonny

It says in the articel that it will cost 3.8 Million to reprint the bills................ Chump change for Obama.............. He gave 550 Million to bankrupt Solyndra!

August 14 2013 at 2:06 PM Report abuse +1 rate up rate down Reply
T Rock

And it is all in $100's - In this economy who still has $100 bills?

August 14 2013 at 2:48 PM Report abuse rate up rate down Reply
RICHARD BONNET

Why would they destroy this money? Why not add it
to all the other "worthless money "presently in circulation?

August 14 2013 at 1:45 PM Report abuse +1 rate up rate down Reply