For Americans, and probably most people outside of Vietnam, you usually don't think twice about the condition of the currency you use in your daily transactions. I am not sure of the specific guidelines, but I know that if you have around two-thirds of a bill the bank will change it for a new one in the U.S. It seems that these days it helps to have an account with the bank you are trying to exchange the bill from, but in genereal, it is not something we often fret over.
In Vietnam, most currency, and all currency of any real value, is made of polymer or plastic. The State Bank of Vietnam made the conversion about five years ago, though I don't remember the exact year. The first problems I read about the polymer dealt with people in rural / farming areas trying to dry out their plastic currency by ironing it. Needless to say,a hot iron and plastic don't mix well together, and people learned quickly not to do that.
Something an expatriate learns quickly, that all Vietnamese people already know, is don't accept Vietnamese money - the Vietnamese Dong - that has been ripped, or torn, even if it has been taped back together. It is nearly impossible to pass these along after you come into possession of one. As a matter of fact, you might as well just pocket it and take it back with you to your homeland as a souvenir.
It is almost a game here. People take every opportunity to pass these off to some other person, like a hot potato. It seems the easiest way to get rid of one is to pass it off to a taxi driver at night when getting out of the vehicle. But you better do it fast, because you don't want to get called back on it. Beware, that taxi driver is playing the same game with you, trying to pass you ripped bills in change in the same manner. The manner and method of passing on these cursed bills is endless, but one thing is for sure: It can't be easy to get the bank to trade them in for new bills. If it was, there wouldn't be this "game" going on.
Just another example of TIV - This is Vietnam.
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