The gag dollar is a novelty toy that only appears in the episode "Pranks a Lot."
The gag dollar is similar to a regular Bikini Bottomdollar, only it is fake, cannot buy one anything, and is not counted as currency.
Role in episode
The gag dollar is first seen after SpongeBob requests Frank for a novelty item to prank the town with. Frank then holds out the gag dollar, saying that SpongeBob and Patrick could fool their friends into thinking it is a real dollar, but they turn it down in favor of Invisible Spray.