How to Detect Counterfeit Money: Ultimate Guide

Watermarks in currencies are a characteristic security feature of authentic banknotes. Real watermarks are:

• Only visible when you hold it up to the light
• Visible from both sides of the bill, and
• Found in different areas, depending on the denomination

Generally speaking, if there is no watermark or the watermark is visible without being held up to the light, the bill is likely a counterfeit.

When evaluating the most recent $5 bill design, hold the note up to the light to see three numeral 5s to the left of the portrait and on the right edge; in the previous design, the watermark depicts Lincoln’s portrait.

On new $10, $20, $50, and $100 notes, the watermark is a replica of the portrait and is located to the right of the printed image.

Tilt the note 45 degrees and look for color-shifting ink on the numbers (denomination) in the lower right corner of a $10, $20, $50, or $100 bill.

Animation of color-shifting ink transitioning from copper to green on the $20 bill
(Source: Federal Reserve Bank Atlanta)

In addition to the color-shifting denomination, the 2013-style $100 bills feature a color-shifting bell in the inkwell. While the inkwell remains a copper color, the bell shifts from copper to green when viewed from a different angle.

The bell in the inkwell appears copper when viewed straight-on (right) and shifts to green when tilted (left).

The security thread is one of the most distinctive security indicators of an authentic bill. If you hold a genuine bill with a denomination of $5 or more up to the light, you will see a security thread running vertically across the bill to the right or left of the portrait.

Image of the security thread in a $20 bill as seen under a UV light. (Source: Wikipedia)

That said, the ultimate test involves viewing the bill under an ultraviolet (UV) light to confirm the security thread glows the correct color. This extra security measure was originally added to provide a quick way for bartenders to check the legitimacy of a bill. Based on these features, fake bills will either lack a security thread entirely or have a security thread with text, location, and/or color that does not match the denomination.

Security Thread Features for Each Denomination

Unlike other notes, the most recent $100 note design has a 3-D security ribbon woven into the paper to the right of Benjamin Franklin’s portrait. By moving the bill, you can see images of bells and 100s shift as you move. Tilting the note back and forth makes the bells and 100s move side to side; tilting the bill side to side causes them to move up and down. This 3-D security ribbon reportedly cannot be duplicated by counterfeiters, making it an easy way to confirm the authenticity of a $100 bill.

Blue security ribbon on the $100 bill Source: uscurrency.gov educational materials)

Authentic US currency is printed using extremely detailed, die-cut printing plates capable of creating impressively fine lines. Because of that, counterfeit printers are rarely capable of duplicating the level of detail.

To spot a counterfeit bill, take a close look at the printing quality—especially the borders—to see if there are any blurred areas. If you notice significantly blurry borders, printing, or text, it’s an automatic red flag for counterfeit money.

Blurry printing on a fake 20-dollar bill (Source: uscurrency.gov training course)

Genuine US currency of $5 denominations and greater is characterized by microprinting. This super-fine text is difficult for counterfeiters to reproduce with their less advanced equipment. For that reason, counterfeited bills may exhibit unreadable microprinting when viewed under magnification.

Close-up of “USA 20” microprinting to the right of the portrait on a $20 bill (Source: uscurrency.gov educational materials)

The location—and text—of microprinting on US currency varies by denomination, so look out for these features when checking the most recent version of each note for authenticity.

Denomination-specific Microprinting

The paper used by the Federal Reserve for US currency is made up of 25% linen and 75% cotton; it has been supplied to the US Bureau of Engraving and Printing by Crane and Co. since 1879. In addition to their composition, authentic bills feature small red and blue security fibers evenly distributed throughout the material of the bill.

Counterfeiters attempt to reproduce this effect by printing red and blue threads onto fake bills in a similar pattern. But, a close look often reveals that the “fibers” are merely on the surface level—and indicates you have a fake bill on your hands. All Federal Reserve notes are printed on paper with embedded security fibers.

Close-up of red and blue security fibers embedded in $20 bill (Source: uscurrency.gov educational materials)

By running your fingers across portions of the bill, you’ll be able to feel this raised texture that’s not present in most counterfeit currency. The best place to check is along the shoulders of the people on the bills; you should be able to feel bumps and ridges. This is one of the simplest ways to spot a fake bill and should be part of staff training for those starting a retail store.

Related: How to Start a Retail Business

A final check when evaluating the authenticity of a bill is to compare the serial number and the series year printed on the front of the note. The serial number, which includes a unique combination of 11 numbers and letters, appears twice on the front of each note—on the right side and in the upper left corner. On an authentic bill, the first letter of the serial number corresponds to the series year printed to the right of the portrait.

Serial number and series year notated on $20 bill (Source: uscurrency.gov educational materials)

Serial Years With Corresponding Serial Letters

Image of AccuBANKER LED430 (Source: Amazon)	Key features: Best for small businesses that operate largely on cash Best for quick and accurate verification of currency notes’ authenticity Has six counterfeit detection tools: Ultraviolet, magnetic ink, magnetic thread watermark, infrared, and size verification Can identify valid IDs and credit cards *Does not support mixed cash counting

An all-in-one counterfeit money validator, like the AccuBANKER LED430, includes several features to help employees evaluate the authenticity of suspect bills. This detector includes LED lights, a UV light, an integrated ruler for checking bill dimensions, a magnetic sensor to check the authenticity of the ink, and a magnifier to confirm the presence of microprinting. If you operate a largely cash business and need to quickly verify large bills based on several characteristics, this type of tool may be the best option.

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Image of Dri Mark UV Light Counterfeit Bill Detector (Source: Amazon)	Key features: Handheld, small, portable device Very affordable (~$20–$25) Best for quick and discreet checking of counterfeit money Can verify cash, IDs, and documents Come with six UV LED lights and three AAA batteries *Requires dark surroundings and training for UV light detection

To fully evaluate the authenticity of a bill’s security thread, invest in a UV light for each payment station or employee who handles cash. A small, affordable tool like a handheld UV light like the Dri Mark UV Light Counterfeit Bill Detector can help employees quickly and accurately identify counterfeit money. Consider this option if you own a bar or other business that relies on several employees to process a large amount of cash in a short amount of time.

Buy Dri Mark UV Light Counterfeit Bill Detector

Image of Dri Mark Dual Test (Source: Amazon)	Key features: Handheld, small, compact device Cheap (~$10) Battery operated Counterfeit marker on one end and UV light on the other Fast detection — less than a two seconds *Cannot detect bleached (reprinted) bills - should be used in combination with other tools or a careful visual review of relevant security features.

Counterfeit pens work by identifying fake notepaper using an iodine solution that reacts with the starch in wood-based papers. Iodine does not react with the cotton and linen fibers found in authentic bills. So, if a counterfeit bill was printed on basic paper, the pen will leave a dark stain; if the bill is authentic, it will not.

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Image of AccuBANKER D585 (Source: AccuBANKER)

Key features: Best for businesses that process larger volumes of cash 3 pre-programmed currencies (USD, EUR & GBP) Automatically detect fake bills Has seven counterfeit detection tools: Ultraviolet, watermark, magnetic ink, infrared, dimension detection, image and color spectrum Multidirectional feeding Best if employees are not well-trained on how to detect counterfeit money *High price point (~$200)

Unlike counterfeit validators that only provide tools to manually check if a bill is counterfeit, an automatic bill detector like the AccuBANKER D585 can automatically detect counterfeit bills. This kind of detection tool is best for you if your employees are not well-trained on what to look for in fake bills. It is a faster way to detect counterfeit money, but it is also more expensive than other tools, making it more suitable for businesses that have higher volumes of cash transactions.

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Authentic US banknotes have characteristic security features—watermark, security thread, and color-shifting ink, to name a few. Fake bills can have one or two of these unique characteristics but rarely all of them. Familiarize yourself with each bill’s security features. Generally, to check for fake dollar bills, it is advised to feel the paper, tilt the note, and check with light and with magnification.

If you are using counterfeit pens to check the authenticity of banknotes, fake bills will turn the ink black or dark blue. Genuine bills will turn the ink yellow. Note, though, that counterfeit pens are not as accurate on more advanced fake money. However, they still can help identify some fake bills.

Yes, it may feel similar to authentic bills. However, one sign of counterfeit money is that it feels smooth. Run your fingers over the shoulders of the portraits. Real money has bumps and ridges.

If you realize it’s fake, immediately contact the police. Follow the steps listed above as they apply to your situation. It should go without saying that you should not try to use it. If, however, you are caught accidentally trying to use counterfeit money, then work with the store owner to contact the police. Try to remember where you got the bill and (of course) pay for your purchase with legitimate bills. If you are charged with using counterfeit currency, contact your attorney.

The most common mistakes are errors in color or paper and poor printing. The easiest way is to check for color-shifting ink and to feel for the texture of the paper.

First, the bills are worthless; the government will not honor them even if you turn them in. Second, it’s a felony to pass counterfeit bills. It also hurts the economy and can contribute to inflation, which means higher prices for the things you want.

Bogus bills are more often passed along at retail stores. Banks usually have more safeguards to detect counterfeit money, so it’s less likely you’ll find them from an ATM.