Currency has been changed over the years many times to make it harder to counterfeit. That’s necessary, because the technology available to counterfeiters has become vastly more sophisticated. Think of the high tech scanners, printers, software, etc. that are in easy reach of most people now, compared to what counterfeiters would have had to use decades or centuries ago.
So, how can one ascertain if a given bill is counterfeit? (We’ll assume it’s a fairly recent bill that incorporates the latest changes.)
First off, a good thing not to do is to rely on those counterfeit detector pens that so many retailers and others have fallen for.
The pens contain iodine. Iodine reacts with starch by turning it black. So basically the pens function as starch detectors. High quality paper, such as that used for currency, does not contain starch. Cheap, low quality paper does.
Question: What would any counterfeiter worth his salt use? Cheap paper with starch that can be easily detected, or better quality paper without starch? Answer that question, and you’ll know to roll your eyes when you see the serious looking Wal-Mart manager authoritatively run the magic pen over a high denomination bill and scrutinize the result.
All the magic pen does is make people overconfident that any money that doesn’t turn black is genuine, which leads them to not bother examining it very closely beyond doing the pen trick, and thus leaves them far more vulnerable to counterfeiters than if the magic pen had never been invented.
So let’s assume we’re dealing with counterfeiters operating at a level above Beavis and Butthead (who attempted to counterfeit money by photocopying nickels for ten cents per copy).
Compare a suspect bill to a genuine bill of the same denomination and series, looking for differences, not similarities. First, consider the portrait on the bill. It should have a lot of detail and stand out distinctly from the background. If it is flat and lifeless, that’s a sign the bill is counterfeit. The sawtooth points on the Federal Reserve and Treasury seals should be sharp and clear.
The lines in the border and scrollwork of a genuine bill will be clear and unbroken, not blurry. The numerals in the serial number will be clear and distinct and evenly spaced, and they will be of the same color ink as the Treasury Seal. Plus of course the serial numbers will match each other (but not those of any other bill–if you have two suspect bills with the same serial number, you know they’re phony).
Held up to the light, a watermark should be visible from either side of the bill. For denominations of $10 and above, the watermark is the same as the portrait; for a $5 bill it is a “5.” (The $1 bill does not have one.)
On bills of denominations of $5 and above, there is a tiny vertical plastic strip embedded in the bills with printing. The strip glows if held up to a black light. The same denomination bills also have printing so tiny it can only be seen with a magnifying glass, yet it is still very clear and non-blurry.
If you tilt a genuine bill of denominations of $10 and above, you may be able to detect a slight shift in the color of the ink.
A genuine bill will have tiny red and blue fibers embedded in the paper. A counterfeit bill either won’t have these at all, or they will be printed on rather than a part of the paper.
Genuine bills even have a distinct feel. Both the composition of the paper and the ink used to make currency is special and confidential. It’s hard for counterfeiters to come very close to duplicating the feel of a real bill. The fact that the ink is slightly raised on a genuine bill is a further complicating factor.
An excellent counterfeiter can do a decent job of reproducing some of these features, but it’s almost impossible to really nail all of them. With close examination, you should be able to identify almost all counterfeit currency.
“How to Detect Counterfeit US Money.” wikiHow.
“Know Your Money: How to Detect Counterfeit Money.” United States Secret Service.
James Randi, “You’ve Seen It.” Swift: Online Newsletter of the JREF.