Ideally, you would have gotten bills back from the machine (if configured with something called a cash recirculator), but those aren't common.
And as a Canadian, I thought you'd be used to dollar coins ;) . The USA is pretty much the only developed country that uses bills for amounts that small-- which is a thorn in the side of the cash operation of places like NYC Transit.
There is a $2 bill, except people think it's rare and take it out of circulation, then making it actually rare and causing headaches for the US Treasury.
It sounds like the Japanese 2000 yen note (although that's worth about $20). I was given lots of them when I changed money before a trip to Japan, but had some trouble using them because no one seemed to believe it was real money. A bus driver actually had to ring through to someone to verify it.
Similarish issue with 500 EUR notes. Foreigners sometimes get stiffed with them overseas because nobody wants to take them, including the money changers' suppliers. In Europe, you can only convert them at central banks, but usually they'll be accepted if you buy something big enough.
That's more like the US $100, which is not accepted usually because
- they are a high denomination bill and people who attempt to counterfeit money like to copy those
- they are not encountered often, and so staff can be unfamiliar with how to verify their authenticity
- as the highest denomination US note, it is very hard to get it out of your till and back as change, and meanwhile it has probably taken a bunch of bills you do often need to give back out of the till
Because they are more reliable and easier to clean. Machines rarely reject coins, they often reject legitimate bills. At least the ones I have used in Germany and Mexico.
The Canadian in me was very disappointed.