How to Protect Your Business from Counterfeit Money

currency tester

 It’s not easy to turn a profit in any business, but it’s a lot harder if you end up selling your products for worthless currency. Counterfeit money is the scourge of many businesses, especially those that do high volume retail sales, and operate in conditions that have muted lighting (like a bar or restaurant). How big is the problem? The U.S. government seized $261 million of fake currency in 2011. That is a staggering sum, and in some ways the problem is getting worse.

The rise of digital printing technology has helped counterfeiters make more accurate versions of currency cheaply and easily. They can make copies of bills that are uncannily accurate, and if passed under the right circumstances they can be hard to detect. Businesses that get stuck with them have to report a loss, and it’s almost impossible to get restitution from the counterfeiters, who are usually long gone by the time anybody discovers their nefarious work.

Some retail businesses try to limit their losses by refusing to take any denomination higher than a $20 bill, but as many of them have found out, if you get burned enough times with $20 bills you can lose a lot of money even with that precaution. You can be sure that million dollar figure contains a lot of small denominations.

So, what can be done? Smart businesses know that the first line of defense is to train your employees to recognize a counterfeit bill when they see it. There are certain telltale signs even with the best digital printing job, and here are the ones to look for.ultraviolet detection money

  • The portrait. The first thing to look for is if the portrait stands out from the background of the currency. It’s hard for counterfeiters to create this effect, and many times a fake bill will have a portrait that blends in with the background.
  • The seals. The two main seals, of the Federal Reserve and the Treasury, should be clear, distinct and sharp. If they are blurred, it’s the sign of a fake.
  • The serial numbers. The serial numbers in the bottom right of the front of the bill should be the same green color as the Treasury seal. The size and spacing of the numbers can be a challenge for counterfeiters, but a more common mistake is that they will print multiple fake bills with the same serial numbers.
  • The borders. The borders of the bill should be clear, sharp, and unbroken. Sometimes the borders on a phony bill will be blurred, because the ink bleeds.
  • The color. Because counterfeiters don’t always use starch-free paper, a phony bill will turn blue or black when tested with an iodine-based counterfeit detector pen. The starch in the paper reacts to the iodine, turning the ink blue or black. A genuine bill will turn yellow when tested this way.
  • The texture. This is probably the most common method of detecting fake currency. If you run your fingers along the surface of a genuine bill, the texture should be raised, not smooth. If the bill is smooth to the touch, it’s probably a fake.
  • The watermark. This is another easy way for an ordinary person to identify a counterfeit bill. With genuine bills, you can see a shadow of the portrait when the bill is held up to the light. That’s the watermark. Counterfeiters often can’t duplicate the watermark, or they will sometimes have the wrong watermark on the bill (e.g., they’ll have the shadow of Lincoln’s portrait instead of Jefferson’s).
  • The paper. Again, this is another thing that counterfeiters have a hard time duplicating. Real U.S. currency has tiny red and blue fibers embedded in the paper, and if you look closely you can see them. Counterfeiters sometimes manage to put the fibers on the surface of the paper, but they are usually unable to get them embedded.

      Smart stores will train employees to take their time and really examine a bill if they suspect a counterfeit. Criminals will often try to hurry an employee, or distract them, to get away with passing the fake bill. If employees take the time to examine the bill carefully, they will often be able to spot a counterfeit. Even the most diligent employee will sometimes get fooled, however, and that’s why companies are increasingly relying on technology to help their businesses spot phony bills.   Besides the iodine based detector pens, there are other options. They include:

  • Watermark lamps. They shine a bright light to illuminate the embedded watermark. The employee still has to know what to look for in a watermark for this device to be effective, however.
  • UV lights. The UV light activates an embedded color security strip on the bill that is only visible under the UV black light. This can be very effective; however it also requires some knowledge of currency denominations and their currency strips.
  • Magnetic ink scanners. These machines are simple scanners that detect if the ink on a bill is real or counterfeit. They are easy to use, but can be fooled sometimes.
  • Multi test scanners. These machines put a bill through multiple tests, and are the most advanced and efficient counterfeit currency detection devices on the market. They are almost completely foolproof, and can spot a multitude of counterfeiting techniques. They can be expensive, but for a high volume retail business, they more than pay for themselves in preventing losses from counterfeiters. The machines come in a variety of styles and sizes, from small, portable ones to hybrid versions that are also currency counters.

Counterfeiting is as old as money itself. The Greeks and Romans had counterfeiters among them, and the problem got so bad in the U.S. after the Civil War that the Secret Service was formed to fight it.

There will always be people who try to beat the system by passing phony currency, but smart businesses will stay one step ahead of them with the latest technological safeguards.

alex reichmann

 Alex Reichmann is a currency counterfeit detection expert and the owner of ITestCash. Helping businesses protect themselves against counterfeit currency started as a family affair, with Alex’s grandfather contributing to the creation of the Dri Mark counterfeit detector pen. Reichmann can be reached at