How to Spot Counterfeit Money

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The counterfeit money industry costs any government a good bit of money and time in investigations. The US government and its mints are constantly trying to improve paper bills to make counterfeiting more difficult. Making bills that are impossible to counterfeit is not possible since fakes can be passed on unsuspecting cashiers, but making the…

The counterfeit money industry costs any government a good bit of money and time in investigations. The US government and its mints are constantly trying to improve paper bills to make counterfeiting more difficult.

Making bills that are impossible to counterfeit is not possible since fakes can be passed on unsuspecting cashiers, but making the process more difficult and costly is an option.

how to spot counterfeit money
Something doesn’t look right here!

Being able to spot counterfeit money that you have been given is an important skill especially if you use a lot of cash for your spending.

Why? Because if you walk out of a store or bank with fake bills and come back later, there is no way they will swap out the fake money.

You will have to turn it back into a bank and usually be required to fill out a report so an investigation into where the fake currency came from.

In short, accepting fake bills from an unsuspecting cashier can end up costing you money, so you need to be aware of what to look for.

How to Tell the Difference Between Real and Counterfeit Money

Here are a few things to look for on paper bills that are given to you from a bank or store that will show whether or not the bill is fake.

Watermarks

Paper bills now have watermarks built into them that can be seen when held up with bright light behind the bill. The watermark is a smaller version of the large portrait on the bill.

Security Thread$100 bill 3D security ribbon

All new currency has a security thread embedded into the paper of the bill. You can see the thread when you hold up the bill to a light.

Additionally, really small text is written on the thread that identifies the bill. For example, the US $10 bill’s security thread will have text that reads “US TEN” on it.

The new $100 bill takes this a step further with a 3D security thread that alternates between the number 100 and the Liberty Bell when tilted.

Crisp Printing

counterfeit money has poor print quality
Left is real; Right is fake

If you don’t handle paper money often, you may not realize that authentic currency has a different feel from simple printed paper. The paper that US currency is printed on is not sold commercially, and the ink is slightly raised on the paper when printed.

You can feel the difference between a copy and a real bill because of the slight texture of the authentic.

Another area of crisp printing focuses on the actual images on the bill. There is a lot of small text and intricate detail on real currency that can be difficult to duplicate on a fake.

Look for blurred or “flat” images that don’t seem to pop off the paper.

Colored Fibers in Paper

US currency - colored fibers in paper
Left is real; Right is fake

If you look closely at real currency you will see embedded blue and red fibers in the actual paper. This is nearly impossible to duplicate so fakes either leave it out or try to print blue and red miniature dots to fake it.

Color Changing Ink

The ink on newer bills changes colors when you look at it from different angles.

Simply move the bill in your hand to different viewing angles and you should see the color change. (The colors used to change from green to black; they now change from copper to green.)

Compare to Another Bill

One of the easiest way to compare if one of the bills you were just handed is real or not is to compare to one you already have on you.

If you get $5 back from paying cash for lunch and have a $5 bill in your wallet, take out the other five to compare it against the one you were just given if you suspect a fake. Both bills should look and feel the same.

How To Spot A Counterfeit $100 Bill

Several years ago, the US Bureau of Engraving and Printing updated the $100 bill, which is the most frequently used and circulated form of US currency outside of the US. The new $100 bill went into circulation in February 2011.

This was the first update to the $100 bill since 1996 and the latest in a series of updates to other US notes, including the new $5 bill, $10 bill, $20, and $50.

Fun fact: an estimated 2/3 of all $100 bills in circulation are used outside the United States. It is also the most frequently counterfeited US bill outside the US (the $20 bill is the most frequently counterfeited bill within the US).

new $100 bill

New $100 Bill Security Features

The new $100 bills are the most advanced bills the US has produced to date.

Visit the interactive notes page at NewMoney.gov for a hands-on view of the new $100 bill. Or check out the new features here:

3-D Security Ribbon. There is a blue security ribbon that runs vertically through the new $100 bill. When the bill is tilted, the ribbon alternates between showing 100s and the Liberty Bell.

When the bill is tilted from side to side they move up and down and when the bill is tilted back and forth they move side to side.

$100 bill zoomed in on 3D security ribbon

Bell in the Inkwell. The new $100 bill features color-shifting ink. The inkwell in the bottom right of the bill has a Liberty Bell embedded in it and both appear to be copper color from the front.

As you shift the bill, the Liberty Bell appears to change to a green color and the inkwell remains a copper color, making it seem as though the bell is disappearing.

$100 bill zoomed in on the bell in the Inkwell

Additional Security Features On New $100 Bill

  • Portrait watermark. There is currently a watermark on the $100 bill. This can be seen on both sides of the bill.
  • Embedded security thread. This is different from the new 3-D security thread which is located to the right of the portrait. This security thread is located left of the portrait and is similar to the current security thread. It glows pink under UV light.
  • Color shifting 100. Located in the bottom right corner, the color shifting ink changes from copper to green in color, similar to the bell in the Inkwell.
  • Large 100 on reverse side. The large 100 on the reverse side of the bill will help those with some visual impairments. I didn’t see it mentioned anywhere, but I wouldn’t be surprised if the 100 features microprinting.
  • Microprinting. There are multiple placements of microprinting on the new bill; these are difficult to forge.
  • Raised printing. The new $100 bills feature an enhanced intaglio printing technique that results in raised printing, giving the bill a unique texture.

backside of $100 bill

Top image, iStockPhoto, additional images public domain from NewMoney.gov. More info about counterfeit money from the Secret Service.

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About Kevin Mulligan

Kevin is a debt reduction champion with a passion for teaching people how to budget and build wealth for retirement. He’s building a personal finance freelance writing career and has written for RothIRA.com, Good Financial Cents, Moolanomy, and many others.

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  1. Jersey Mom says

    It certainly looks very different. I hope it succeeds in deterring counterfeiting… at least for awhile.

    • Ryan says

      To my knowledge the US Treasury Department has never printed a $200 bill, but there have been $500 bills in circulation. They were infrequently used, however, and were removed from circulation. They are big collector’s items now and fetch a substantial markup over their face value.

      That said, I don’t know what kind of market there would be for a $500 bill in the US. I’m sure it would be big overseas (where the majority of $100 bills circulate), but it would also be another target for counterfeiters and an instrument of exchange for drug dealers and arms dealers. I’m not sure it’s worth adding it to the circulation at this point.

  2. krantcents says

    Most counterfeit money is really bad. The ones that are good, you can develop a sense for most of it and use the tools of the trade. There are special lights to reveal the treads or run your fingers over the engraved words. Counterfeit money is a cheap representation of our currency. If they did everuthing right it would cost them a lot of money.

  3. Jon @ MoneySmartGuides says

    I still have the pen that you use to check for fake bills from when I worked at a bank It’s great – it looks like a highlighter. You draw a line and if the line stays colorless/yellow, it’s real. If it turns brown, it is fake.

    When I was overseas, they use coins more so than here in the US and the bill sizes vary depending on denomination as well. As a foreigner, I was completely lost, but I guess if I used it everyday, I would get used to the various sizes.

    • Ryan Guina says

      All great points, Jon. I lived in the UK for a few years, and the money is very different over there – just as you mentioned, they use coins much more frequently (the smallest bill is a 5 pound note, and they have one and two pound coins). The bills are also different sizes. The Euro is similar in that regard. The money in Australia is made out of a polymer and is more durable than our notes, and much more difficult to forge. It’s probably more expensive to create, but a similar process might be an avenue the US needs to go to in the future.

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