Best Practices For Detecting Counterfeit Money

Want an entertaining dinner party activity? Ask people around the table if they know how to tell if the cash in their wallet is counterfeit money or not. At best, many of them will know only the most common features – the watermark, for instance, or the embedded security thread (although they will not realize the strip is meant to be looked at under UV light).

At worst, they will rely on outmoded techniques such as counterfeit-pen tests. Unless they work for the counterfeit-detection unit of the Secret Service, chances are your dinner companions will not know how to reliably spot fake money.

Remarkably, even many store owners do not know the best ways to detect a counterfeit. Meanwhile, fraudsters continually use that ignorance to their advantage, passing fakes in broad daylight.

To help improve the situation, then, we have come up with a list of Ways to Detect a Counterfeit, ranked from lowest (most unreliable) to highest (almost never fails). Let's begin at the bottom.

Counterfeit Pens

The notion that a counterfeit detector pen will save you from counterfeit money should be officially retired. The pen is built around a simple premise - a chemical reaction between starch and iodine. This fundamental test was defeated by enterprising counterfeiters years ago. The detector pen “ink” is an iodine solution, which turns a solid black when exposed to starch found in most commercial paper. Starch is a cheap way to whiten materials (there is also starch in your laundry detergent), and the thinking goes that any counterfeits printed on such paper will be immediately found. Unfortunately, there are at least three things wrong with this concept.

• Not all paper uses starch. All an enterprising fraudster needs to do is walk along the paper aisle of the local office supply store and test the pen on every brand of paper until he finds one that does not turn the ink black – and voila!
• Even if the fraudster were to use starched paper, there are fairly easy ways to prevent the chemical reaction that turns the ink black from occurring. For instance, a light coating of hairspray will form a barrier over the paper keeping starch and iodine apart.
• The detector pens will likewise miss the newest form of forgery, in the form of washed notes. Fraudsters take $1 and $5 bills, bleach them and print the pattern for $100 in their stead. Since the paper is still real U.S. dollar paper, there is no starch.

Physical Document Inspection - Checking for security features

Although few people know about it, United States currency actually has some very sophisticated security features. A few highlights:

1. Every bill of denomination greater than $2 has color-shifting ink on the lower right corner on the front side – tilt the bill back and forth and it will turn copper to green, or black to green. This “rainbow ink” cannot be found commercially, and cannot be replicated by any scanner / printer.
2. Serial numbers on fake bills tend to be noticeably brighter or darker than the rest of the bill, as well as misaligned.
3. The portraits on the front (and on some older bills the area around them) have very fine curved lines running along them. This level of detail is created using the intaglio printing method, which creates physical ink-filled grooves on the surface of the paper. On real U.S. dollars, you should be able to feel the roughness over the portraits with your finger.

Absent a counterfeit testing device, verifying physical banknote properties is the best way to check for counterfeits. That said, high–quality counterfeits, such as “supernotes” or “washed” notes can still pass many of these tests. The only sure-fire way of catching advanced counterfeits is to use some type of counterfeit detection scanner.

Counterfeit Detection Scanners 

Of course human-based testing methods are prone to human mistakes. For real precision and efficiency you need to use a currency scanner device that aids in testing a banknote. But which one should you get? There are a plethora of different devices out on the market, from watermark lamps and UV-light counterfeit detectors, to the seemingly more high-tech magnetic ink scanners, and culminating in the all-in-one commercial multi-test units that combine various combinations of the methods above. Each machine brings its own method, with unique strengths as well as drawbacks. We will go over each in detail in the coming posts, but a short preview is in order to help you decide on where to focus.

• Watermark Lamps:
  • How it Works: Bright light illuminates embedded watermark
    
    • Advantages: Easy to operate; affordable
    • Disadvantages: Fairly easy to fool; precise detection requires near expert-level knowledge of watermark details
• UV Lights: 
  
  • How it works: Activates an embedded colored security strip, which is only visible under UV blacklight
    
    • Advantages: Easy to operate; difficult to fool. Flexible tool also enables verification of other documents, such as driver licenses, credit cards, money orders, passports and much more, in addition to currency
    • Disadvantages: Requires some knowledge of dollar denominations and matching security strip color; the $100 “glowing strip” was poorly managed by the Treasury
    • , and can be a challenge to see
• Magnetic Ink Scanners
  
  • How it works : Scans banknotes for presence of magnetic ink
    
    • Advantages: Requires no human input – “idiot light” red or green tells your cashier if the bill is good or bad with “no thinking involved”
    • Disadvantages : Does not match ink to different denominations; fairly easy to fool; can give false positive (e.g. “green light”) when the incorrect magnetic feature is present, since the machine does not have advanced logics
• Multi Test Scanners
  
  • How it works: Subjects bills to multiple tests, including combinations of the above.
    
    • Advantages: Top of the line in detection efficiency; virtually impossible to fool; requires no human input
    • Disadvantages: Most expensive of the four solutions.

In short, not all counterfeit detectors are created equal, so if you are considering buying a machine to help you out at the cash register, consider what your needs are, who in your company will be using it, and what is the best for your needs.