Embroker Team September 2, 2022 6 min read

How Businesses Can Spot and Protect Themselves from Counterfeit Money

Man with back turned pondering how to detect counterfeit money while looking at large currency notes

For as long as money has existed, criminals have tried to counterfeit it. The phenomenon of counterfeiting predates the familiar idea of currency that we have today, namely coins and banknotes.

While it’s hard to establish the first-ever currency, seashells seem like the most likely choice. Records and archeological finds show that this seashell currency was imitated by using substitute materials such as bone, stone, ivory, and bronze.

However, while counterfeiting is a practice with ancient roots, it also has a very modern impact. Furthermore, counterfeiting techniques have become increasingly sophisticated over time, with replicas becoming almost indistinguishable from the real thing.

Due to its value and widespread use, the US dollar is the second most counterfeited currency globally. According to the United States Department of Treasury, there are between $70 and $200 million worth of counterfeit bills currently in circulation. In the first three months of 2021, US Customs and Border Protection discovered over $1.5 million in counterfeit money in Chicago alone. Another shipment of over $100,000 fake dollar bills entering the country from Hong Kong was seized in California this year.

If your business ends up accepting some of this widely circulated counterfeit money, the financial ramifications can be unpleasant. And since most counterfeit money often ends up being distributed throughout a smaller geographic area, the chances of your business accepting fake currency on multiple occasions also increase.

How to Spot Counterfeit Money

counterfeit money illustration

As we’ve already mentioned, the rate at which criminals have continued to innovate in order to combat the measures taken by legitimate institutions to stop them from producing counterfeit money has been truly astounding. New security features and banknotes developed to make counterfeiting harder have been closely followed by counterfeiting techniques to mimic real currency better.

The characteristics of the banknote, such as the quality of the paper, watermarks, ink, and print quality, are all used to make it harder to counterfeit money and easier to help people recognize authentic currency.

Let’s discuss what characteristics of money businesses should be aware of when checking to see whether the money they have received is genuine.

Check for Color-Shifting Ink

The easiest way to check if the money you received is authentic is by checking if the numbered value on the bottom right corner is printed with color-shifting ink. If you tilt the bill back and forth, you’ll be able to see that the number shifts colors, either from green to black or from gold to green. All non-one or two dollar bills printed since 1996 will have color-shifting ink added in as a security feature.

Check the Watermark

The watermark is a great way to determine the authenticity of banknotes, as it’s very hard to forge, even for the most sophisticated criminals. A watermark, typically the image of the person portrayed on the bill, can be found on all $10, $20, $50, and $100 bills printed since 1996 and on $5 bills printed since 1999. It’s embedded in the note to the right of the portrait and can be seen from both sides of the bill.

To check if the bill has an authentic watermark, simply hold it to the light. This is the only time it should be visible. If it’s visible without direct light, the bill is most likely counterfeit. Also, make sure that the watermark matches the image on the money. Counterfeiters sometimes bleach lower denomination banknotes and reprint them with a higher value.

Find the Security Thread

Like checking for the watermark, finding the security thread is yet another “hold the bill up to a light” test. You should see a thin, embedded strip running from the top to the bottom of the bill.

On $10 and $50 bills, it will be right on the portrait and a bit to the left on other bills.

Compare the Bill with Another of the Same Value

If you have a bad feeling about a banknote and suspect it may be a forgery, you can hold it side-by-side with another bill of the same denomination. While the counterfeit may be good enough to fool you in isolation, you’ll most likely notice subtle differences between the two bills when comparing the counterfeit bill with a real one.

Also, keep in mind that all bills, excluding $1 and $2 bills, have been redesigned since 1990. This is why it’s essential to compare the suspect bill to a bill from the same series or date.

Check Blue and Red Threads

An original bill will have tiny blue and red threads imprinted into the fabric. Counterfeiters may attempt to replicate this in their prints, however, their threads are typically only surface-level printouts and won’t be embedded into the bill.

Check Serial Numbers

Make sure that the serial numbers on a bill match, and examine them carefully. The numbers on counterfeit bills may be improperly spaced or misaligned. Also, the first letter of the serial number must correspond to a specific year of print. If the letter and the year printed on the bill differ, you’re dealing with a counterfeit. Here’s the letter-to-year correlation that you should see:

  • E = 2004
  • G = 2004A
  • I = 2006
  • J = 2009
  • L = 2009A

Additionally, if you suspect several bills, check if their serial numbers match, as counterfeiters may often use the same numbers.

Check the Bill’s Texture

If your employees handle money daily, they may feel that something isn’t right with the bills they receive. The paper that the actual tender is printed on can’t be bought commercially. Furthermore, its composition is a state secret.

These security features force criminals to try and replicate the paper as closely as possible. They are rarely successful, which is why being mindful of the texture of money is a great way to spot bad bills.

Real money will also have slightly raised ink. If you run your fingers over the note, you should be able to feel its texture, especially if it’s a crisp, new bill.

Check for Blurriness

Due to the printing limitations of most would-be-counterfeiters, certain bad banknotes may have pronounced blurriness in the borders, text, or portraits.

These blurry details occur because real money is printed using advanced die-cut printing plates and microprinting, which leaves crisp, fine lines. Counterfeiters try their best to keep images sharp but are often unable to do so.

What to Do If You Receive a Counterfeit Note

what to do with counterfeit money illustration

The United States Secret Service’s branch tasked with battling counterfeiters suggests businesses take the following steps if they receive and recognize a fake banknote:

  • Keep possession of the money and don’t return it to the party that passed it to you.
  • If possible, delay the person who passed the counterfeit currency without endangering yourself.
  • Observe their description and write down their license plate numbers if possible.
  • Write your initials and the date on the border of the suspect note.
  • Limit who has access to the note. Place it in a protective covering, such as an envelope.
  • Call your local police department or the local United States Secret Service field office.
  • Surrender the money to a police officer or a U.S. Secret Service special agent who correctly identifies themselves as such.

How Insurance Can Protect You from Counterfeit Money

insurance and counterfeit money illustration

Since the culprits who created the fake currency are most often not the ones who pass the money onto you, it can be tricky getting any reimbursement for losses suffered due to counterfeiting. This can leave businesses, especially those offering high-value items and services, in a position in which they may have to simply accept a serious financial hit, through no real fault of their own.

The good news is that managing and transferring the risk of counterfeiting-related losses is possible and affordable through commercial crime policies. If your business accepts cash, a money order, or a check that at first appears legitimate but is later proven to be a forgery, your crime policy will fully reimburse these losses. The following video explains briefly how Commercial Crime Insurance coverage can protect your business:

Working with an insurance broker and purchasing sufficient crime coverage will ensure that your business is fully protected and compensated, even if you accept a significant amount of bad currency.

If you would like to understand your business’s crime insurance needs better, feel free to reach out to one of our expert brokers at any time to discuss your options.



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