Chances are, unless you collect them, you have had a Star Note in your possession and did not notice it. After all, most of us don’t scrutinize currency serial numbers. If you have one, you may have wondered how much your Star Note is worth.
The average Star Note does not have a standard value because each note is unique and has variable qualities that factor into its overall worth. Those variables include date issued, when the designation was assigned, and how many of its kind were put into general circulation.
Each of these variables defines a Star Note, its role in the overall currency strategy of the United States, and its value. Below, we’ll go through these factors in order to find out how each one affects the value of a Star Note.
What Is A Star Note?
To understand why a Star Note has value beyond its currency value, you must first understand what it is and how it interacts with the overall currency strategy of the US Federal Reserve. The Federal Reserve determines how much currency should be in circulation at any given time and it uses this figure to help control interest rates, which affect each of the following:
- Available funds for borrowing
- Short-term interest rates
- Overall economic growth
- Attempts to avoid a recession
The money to be put into circulation must be printed in a tightly controlled environment. Each denomination has an assigned total for a print run. During the process at the Bureau of Engraving and Printing (BEP), printed currency or currency that is in the process of being printed is occasionally damaged.
When a sequence of currency or singular note is damaged, it must be replaced, because of the role it plays in the overall Federal Reserve monetary strategy. To replace it, a substitute note is printed and put into circulation.
That note has a “star” designation printed on it, which indicates it is a replacement. The number of Star Notes printed equals the number of defective notes in a series. There are two types of Star Note, each designated at specific stages of the printing of currency. This is important because it helps determine the value of that note or sequence of notes.
These are Star Notes created for mistakes or damage on a bill that happens during the printing process. The BEP will substitute Star Notes for every damaged piece of currency. It will not have the same serial number as the larger, non-damaged sequence.
Star Notes created during the cutting process, when sheets of currency notes are separated by individual denominations and/or notes, are called Regular notes. These appear much more frequently than a printing error and because of that, are much more common.
Each type of Star Note is part of the BEP’s quality control process. The BEP prints a quantity of Star Notes that equals the number of errors discovered in a print or cutting run. While the number of errors in a print run determines how many Star Notes are printed, the BEP will print a maximum of 3.2 million.
Under The Limit
Because most currency print runs have a low error rate, Star Note print runs are usually much smaller than the maximum limit. Once any errors are accounted for and a Star Note is assigned to a specific serial number, the Star Note replaces the damaged note in the currency supply and is circulated according to Federal Reserve policy.
A Star Note will hold its denomination value, meaning a $5 bill that is legal tender will be worth at least $5. Additionally, Star Note values are based on the principle of scarcity, plus two other factors: Age and condition.
What Affects The Value Of A Star Note?
In economics, there are two basic cost drivers: Supply and Demand. If the former is low and the latter is high, prices rise; if the former is high and the latter is low, prices drop. With Star Notes, the relative scarcity of the occurrence of the note drives its value.
That means the size of the Star Note print run for the specific note in question will greatly affect its value. A Star Note from a larger group of Star Notes will be less valuable than a Star Note from a smaller run.
Which Is More Valuable?
Factoring into the Star Note value is where it was inserted in a currency run. A Sheet note is much rarer than a Regular note as printing errors are restricted to a specific print run. A cutting error can happen to any note at any time during the “bursting” process and the number of errors will usually be greater. This makes Sheet notes more valuable than Regular notes.
Also affecting value is how many Star Notes were inserted into a currency print run. A Star Note from a run of 3.2 million, for instance, will be less valuable than one from a run of 1 million.
Also, how many bills were printed in total affects scarcity. For example, a small run of 1 million total bills will have a smaller and rarer run of Star Notes as opposed to a large run of total bills and a correspondingly larger number of Star Notes.
Star Note Mint Date
When a Star Note was created also affects its value. As with most currency, the older the mint date, the more valuable the currency. A Star Note from the 1990s, for example, will be more valuable than a Star Note from 2015, because of its collectability.
Generally, collectors want coins that are older.
As with any collectible, the condition of the item affects its price. While older coins or other collectibles gain value if they look weathered, some collectibles hold their value more if they are in good condition.
Any paper-based collectible is more valuable the better condition it is in. This makes getting an absolute value for any Star Note, except those in “mint condition,” difficult. Discussing the criteria for determining value with a collector or coin dealer can help you assess the value of your note.
In the end, however, the relative condition of a note will be up to whoever you are selling the note to and their assessment of its status. You can always negotiate regarding the condition and try and convince a buyer that your Star Note is in better condition than they think.
Grades of condition, while possessing some flexibility, are fairly standardized. The different grades of condition for paper currency are available online. The standards also loosely follow those of other paper collectibles, like baseball cards. A good idea if you do not agree with a currency condition assessment is to get another assessment done by another collector or dealer.
Dealers, it should be noted, will more likely have a rigid system for determining both the condition of the currency and the other variables that help determine overall value. This is because a dealer is stuck with whatever they purchase. If they bought an over-priced item, they lose money unless they can sell the item at the overpriced amount.
Selling To Collectors
With a collector, it is a different story. A collector that wants to buy your Star Note wants it for their collection. There is a premium value that is solely determined by how much the collector wants your item.
A collector will also be more open to a slightly overpriced item because they most likely want to hold onto the item for a long time. The Star Note will only increase in value over time, but the monetary value of a collection to most collectors is secondary to the collection itself.
Types Of Star Notes
A Star Note has a star symbol printed adjacent to its serial number. On Legal Tender and Silver Certificates, the star is placed where the prefix (first letter in the serial number) is located. On Federal Reserve Notes, the star is in place of the “block letter” (the last letter).
While this will not affect the absolute value of your Star Note, if you are selling to a collector, and if they only collect a specific type of Star Note, the price you could sell it for might be negotiable.
A Star Note’s value is determined by how prevalent it is, the date it was printed and its condition. The first two factors are inflexible, but the latter is usually negotiable.
An owner of a Star Note can look up its value in several online directories and get the baseline value of that particular note. That price, however, because of the variables, is not uniform for all Star Notes, because of the role the condition of the note plays in determining value.