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While wasting time on Facebook I ran across this advertisement:

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"Get your hands on a $2 Bill in uncirculated condition for only $1"

In the back of my head, something's telling me it isn't legal to do what the sponsor is advertising: I think it is illegal to sell currently circulating U.S. currency for less than its face value.

Is my memory right or wrong?

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  • Is the advertisement just about buying the currency for less than face value or is there some associated item for sale?
    – Bob Baerker
    Oct 1 at 0:54
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    I would think that it wouldn't happen other than for tax evasion reasons. However, your add probably is $1 + more than $1 in shipping/handling. Oct 1 at 1:02
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    You give them $3, they give you $2 change...
    – DJohnM
    Oct 1 at 6:08
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    Is there any reason you think it would be illegal?
    – user253751
    Oct 1 at 8:31
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    @BobBaerker small print: "In addition to your special limited-time offer, you'll also receive a handpicked trial selection of fascinating coins from our no-obligation Coins-On-Approval Service, from which you may purchase any of none of the coins - return balance within 15 days - with option to cancel at any time". I wonder if those returns are postage-paid...
    – AakashM
    Oct 1 at 10:48
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18 USC Ch. 17 contains the laws against doing things to US currency and coins, and sale of currency is not included. So it is legal to set currency for an amount above or below face value, the former being more common. There might be some illegal aspect to the particular offer (money laundering, fraud – implying that they are real money, counterfeiting) but no law regulates the "sale" of US currency.

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  • It might also be an attempt at getting rid of damaged goods, where "uncirculated" = "the cashier didn't take my pile of cotton mash, so I'm trying to get at least something out of it" Oct 1 at 15:43
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    or an attempt to get people into numismatics.
    – Trish
    Oct 1 at 15:47
  • @Trish normally you'd sell fancy coins above their face value, not below Oct 1 at 15:49
  • @JohnDvorak unless it is de-valued coinage or they are super common. You can buy a kilo of kopeks for less then their monetary value, which isn't much to begin with, and to try to get bills into amateur "collectors" hands 1:1 or below face value mass sales are common.
    – Trish
    Oct 1 at 15:59
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    @JohnDvorak: en.wikipedia.org/wiki/Loss_leader Oct 1 at 17:20
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Obviously, selling U.S. currency for less than face value is not a sustainable business proposition. It is so suspect without strings attached, that it would attract attention as way to launder stolen currency otherwise. At any rate, generally, the law doesn't punish you for engaging in self-punishing transactions.

One presumes that there are some strings attached to the offer - at a minimum setting up an account to facilitate future transactions in a "loss leader" transaction, and possibly a tie in with some other purchase (possibly with a right to cancel or return the goods at no extra charge except possibly shipping) that makes the whole transaction nothing more than fanciful way to describe a $1 coupon on the transaction as a whole.

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Sure. Banks do it all the time when they charge fees for withdrawing currency from ATM machines. Even if you believe that they are charging fees for a "service", the same can be said about any transaction. They also sell rolls of coins for more than the nominal value of the coins.

One may want to argue that banks sell it for more than the nominal value rather than less.

But then the counterparty is doing the opposite.

Anyone buying currency for more than its nominal value is actually selling currency for less than its nominal value.

That answers the actual question.

But the ad, which brought the question on, may have some slight of hand. It's not clear to me what they mean by "uncirculated condition." When it comes to currency, "uncirculated" actually means that it hasn't been issued and cannot be used as legal tender. By saying "uncirculated condition" rather than "uncirculated", the ad (almost certainly deliberately) introduces an ambiguity into the question of whether the currency may be spent legally.

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    In numismatics "uncirculated" is one of the standard terms for condition, better than "very fine" meaning with no detectable wear on it at all. See thesprucecrafts.com/uncirculated-coin-definition-768197 Oct 1 at 19:57
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    @grovkin - your definition of “uncirculated” does not match common usage at all. It means a bill in a condition that indicates not has apparently not been handled, folded, etc. For example you can buy sheets of uncut bills from the U.S. Treasury that are uncirculated but definitely issued as legal tender. Oct 1 at 20:06
  • "Buying currency for more than its nominal value is actually selling currency for less than its nominal value." This makes no sense to me. If I go to a coin collector and buy a valuable $1 coin for $10, I'm not selling my $10 bill for $1, I'm exchanging it for an asset that's worth $10. You're suggesting that someone who buys a rare, collectible penny is selling a large sum of money for one cent, but that makes no sense - the penny is worth more than its nominal value, the price of it isn't worth any less than nominal because I happened to spend it on something that has a nominal value. Oct 1 at 20:17
  • @DavidSiegel that would be "mint" rather then "uncirculated." The link your provided does not mention that an "uncirculated" has to have been issued. When there are misprints (more common with stamps), they are not issued, but they may be sold off uncircluated.
    – grovkin
    Oct 2 at 1:06
  • @NuclearHoagie what an asset is "worth" is determined through a negotiation. If you owe taxes and the government ceases your rare penny, I would not expect the penny to offset more than $.01 in taxes.
    – grovkin
    Oct 2 at 1:09

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