If a damaged or misprinted note is discovered before the third printing stage,
in which the serial numbers are applied, it is simply discarded and destroyed.
But if a defective note is found after the serial numbers have been printed,
it must be replaced by another note so that the count of notes issued will remain accurate. Until about 1910, the BEP would actually print a replacement note with the same serial number (including letters) as the defective note; however, as production levels increased, this became rather time-consuming.

To speed up the process, star notes were introduced.
The BEP first prints a small quantity of notes with star serial numbers,
and then uses these to replace any damaged or misprinted notes discovered
during the main print run. The serial number on a star note is not related to the
serial number of the defective note it replaces; indeed, a defective note may even
be replaced by a star note from a different series, or (in the case of Federal Reserve Notes) from a different Federal Reserve district.

Even after the introduction of star notes, however, the BEP continued to use the old method of individually printed replacement notes in some instances. For any notes which were printed in extremely small print runs, it was simpler to reprint each defective note than to prepare a tiny number of star notes in advance. Therefore, no star notes were printed for the small-size National Bank Notes, $5000 or $10000 Federal Reserve Notes, or $10000 or $100000 Gold Certificates. None of these have been in production since the 1940s; and since that time, the BEP has been
using the system of star replacement notes for all denominations
and types of U.S. currency.

We have one of the largest brick-and-mortar inventories of consecutive star note packs.