Whats this thing when you have a dollar bill but it is not accepted at banks or by cambistas because it has a tiny tear on it, or appears slightly ''warn out''? Does anyone actually know WHY they are refused, because $100 is still $100 whether it is torn or has a drawing on i or whatever! Any thoughts?

I have heard of that happening in Mexico too, it never happened to me though, has it happened to you?

I really have no idea why this is happening, because Banks are the only sources that accept torn banknotes.
(Is it because probably it's fake) Have you checked it?

In Greece we return every single torn note to the Banks, and it is accepted.
If by the way you take them a fake note that you might perhaps had no idea that you had such paper on you, you surely get into trouble!!!
They might not believe you, and even if you had one you would not dare take it to them.
JUST imagine having just a single $ 100 bank note which is torn, and you are in a foreign country......!

I will wait and see what other TPmember tell you though!

http://www.travelpod.com/members/greekcypriot

You will generally find this when trying to use US$ notes in businesses or when using cambistas. Unless the note is in terrible shape, larger banks will usually exchange them as they have proper machinery to check their validity. Don't even think about trying to change US$ 100.00 notes that are not totally pristine. In fact, keep clear of US$ 100.00 notes entirely, as these are the most forged of all.

Here's an excerpt from a Travelpoder in Potosi, Bolivia. I can't think of a better reason to use ATMs rather than hauling cash around with you:

I exchanged some American dollars for Bolivianos in Potosi with a street-side "banker" since our driver wanted only Bolivianos. American dollars are accepted in most of Bolivia, but they must be in perfect condition. I read about that in advance; while in Phoenix, I went through 300 dollar bills at the bank to come up with the best 100 dollar bills. I did the same with $200 in $5 bills. The "banker" lady in Potosi examined every $1 and $5 and rejected them if there was a 1/4 inch tear. She would only exchange US$50. Our taxi driver walked me over to another "banker" so I could exchange $50 more. The town gave me a weird feeling; I felt nervous exchanging the money. There were lots of townspeople (mostly men) wandering everywhere. It gave me a creepy feeling.

I had a couple of note rejected in Peru at the money changers. I ended up getting rid of them to a travel agent who booked a couple of flights for me. The notes were in great condition but had a 1/4 inch tear in the top so not acceptable. Dont know why.