The Federal Reserve (in the US, and other country's central banks or the bank that issued the banknote) destroys it and prints new currency.
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The lifespan of paper money varies depending on its denomination and condition, but on average, it can last about 4-5 years in circulation. Higher denomination bills tend to last longer due to less frequent use, while lower denomination bills typically wear out more quickly.
The typical lifespan of a one dollar bill is 42 months. The average lifespan increases with denomination, up to 5 years for a one hundred dollar note.
Economically during a sale I would say nothing, as long as the person receiving it accepts it as consideration for your purchase as opposed to handing it back to you.