Although retail fraud trends in the news these days seem to be all about online credit card fraud by computer hackers, and identity theft incidents to the tune of billions of dollars happening on a regular basis, not all of the news or concerns involving fraud are of such a high-tech nature. Counterfeit money, a type of fraud that has been around since at least the sixth century, BC, is still alive and well. Detecting counterfeit currency, however, remains a retailer’s responsibility.
In fact, it’s thriving. In fiscal year 2013, more than $156 million in counterfeit US currency was seized globally, and $81 million of that was seized in this country according to reports by the US Secret Service. The Secret Service estimates that about one in every 10,000 US Federal Reserve Notes, or bills, are counterfeit.
That’s a lot of fake money. One primary reason for all of this fraud is that counterfeiting has joined the high tech age with the advent of digital printing. Digital printers and copiers are so advanced now that they can turn out an uncannily accurate version of a real bill.
Criminals use these new technologies to create fake versions of currency and pass them at retail businesses. Their favorite denominations are $10 and $20, mostly because the higher denominations attract more suspicion. Yet while it’s easier to pass bills representing lower denominations, if you pass enough of them it adds up to billions of dollars in retail fraud.
The Buck Stops Here: Detecting Counterfeit Currency
The bottom line is that wherever the buck stops, that’s who ends up taking a loss on the counterfeit. Banks won’t accept counterfeit money, so a retail business that has received counterfeit currency has to take the financial hit. It can be an expensive lesson for stores and other businesses that don’t have procedures for detecting counterfeit currency.
Even with all the high-tech digital tools, however, counterfeiting is not perfect. There are still ways for both loss prevention practitioners and other retail employees to recognize fake money. Here are a few tips:
- The portrait shown on the bill should stand out from the background. President Jackson’s head on the $20 bill, for example, should not blend in with the background.
- The Federal Reserve and Treasury Seals should be clear, distinct and sharp. No blurring.
- The serial numbers shown on the bill should be the same green color as the Treasury seal. Color matching is a challenge for many counterfeiters.
- The borders of the bill should be clear, sharp, and unbroken.
- When tested with an iodine-based counterfeiting pen, the paper will turn yellow if the bill is genuine, but if not it will turn dark blue or black.
- The texture of the bill should be raised, not smooth. Many people can detect a counterfeit bill just by the feel of it. If it’s too smooth to the touch, it’s probably a fake.
- Authentic bills have a shadow of the portrait when held up to the light.
Smart businesses throughout the retail industry will train employees to take their time and really examine a bill if they suspect a counterfeit. Fraudsters 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.
This article was originally published in 2015 and was updated February 9, 2017.