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What do you do with mutilated currency notes?

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Sometimes, we are not very observant and we end up having mutilated or torn currency notes with us. Either from where we go to buy stuffs or banks. What do you do with currency notes that have been mutilated if you are in possession of such?
 
I have never had such experience because I am naturally a very observant and selective person. I check every funds that enter my hands, I reject the bad ones and accept the good ones simple. However, if it ever happens, I'll just give it out to someone else because I know I don't accept it so I wouldn't expect another person to so.
 
Sometimes, we are not very observant and we end up having mutilated or torn currency notes with us. Either from where we go to buy stuffs or banks. What do you do with currency notes that have been mutilated if you are in possession of such?
I use to bundle all my mutilated notee and take it to banks and they do collect it without complain. Sometimes, if i want to buy stuffs, i put it in between bundle of notes!
 
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