What does "pay the bearer on demand" mean?

As told by the previous poster, a bank note historically is a promissory note, issued by the central bank of the country. It promises to pay it in Gold equivalent to the "purchasing power" of the currency. This relates to the paper currency as a replacement for gold as the exchange material. Since Governments are more stable these days nobody ever goes and demands gold. And not only that we have come a long way from the Gold Standard and no government can really pay up its citizens in Gold! The notes in circulation in any country far exceed the Gold Backing available. The story of money is pretty interesting.

You find this phrase on banknotes issued by the Bank of England. The point is that banknotes are just the same as IOUs - they don't have any value themselves; the value is in what they represent. Historically, it used to mean that, if you went to a bank and presented the note, they would give you the equivalent value in coins or gold. So if you go to an English bank with a £10 note, they are technically supposed to give you £10 worth of gold or £10 worth of coins. Of course, in the real world, that can't happen because there just isn't enough gold lying around. So what it really means nowadays is that if the banknote is damaged or extremely old, you can swap it for a new undamaged one of the same value.

I'm not 100% on this but it means whomever presents the check can cash it or deposit it. The check is payable to no one specifically just whomever posesses it. I know here that can lead to alot of fraud problems as some programs used to pay your rebates in such a method. I figured that's why I never got my Walgreens rebates yrs ago because that's how they sent the rebates out in the mail that either someone went thru the mail & stole them or whatnot as I'd send them to either my home or my mother-in-laws and I still would never recieve them.