A report from a University of Guelph study explains that

People are more likely to spend dirty, crumpled currency and hold on to new bills. [But] in social situations, people reach for new bills even when they have older higher-denomination currency on hand.

Researcher Theodore Noseworthy explains

We tend to regard currency as a means to consumption and not a product itself. It should not matter if it’s dirty or worn because it has the same value regardless. But money is a vehicle for social utility, and it’s subject to the same inferences and biases as the products it can buy.

This suggests some design opportunities for digital money. I recently tried Square’s new service that lets you email cash to anyone (US only). The user experience was so minimalist and utterly delightful – and such a change from the dirge of PayPal (even without the frequent frustrations). If I’m sending someone an experience as part of sending them money, the quality of that experience may be something to consider (also, it’s free; also it’s a good experience for me as the sender).