As a business owner on the Central Coast, protecting your business from financial fraud is a constant concern, and one of the oldest forms of fraud—counterfeit currency—continues to pose a threat to local business.
There is no reimbursement for accepting counterfeit bills. Once a business accepts a counterfeit note, that money is lost. Despite technological advances in currency security features, counterfeiters continually adapt their methods, making it essential for business owners to stay informed about how to identify fake bills to protect their bottom line.
Advances in technology, increased availability of scanning and printing devices, and the adoption of the U.S. dollar as legal tender in other countries have all contributed to the evolving global threat of counterfeiting.
Our coastal communities, with their tourism-driven economies and high cash transaction volumes during peak seasons, can be particularly attractive targets for those passing counterfeit bills. Business owners in high-tourist areas like downtown Santa Barbara, the Santa Ynez Valley and Paso Robles wine country, and San Luis Obispo’s downtown district should be particularly vigilant, as counterfeiters often target busy establishments where staff may have less time to carefully examine currency.
Peak seasons like Old Spanish Days, the Mid-State Fair, and the holidays are especially vulnerable times for local businesses. A couple was arrested in Ventura around New Years this year for passing counterfeit bills to retailers.
Modern U.S. currency includes numerous security features designed to make counterfeiting more difficult. Here are the key features to check when accepting cash payments:
All genuine U.S. bills $5 and higher contain an embedded security thread that runs vertically through the bill. When held up to light, this thread becomes visible and displays the denomination of the bill. Each denomination has the thread in a different position:
The thread also glows a specific color under ultraviolet light:
Genuine bills feature a watermark that becomes visible when the bill is held up to light. This watermark should match the portrait on the bill.
For example, on a $100 bill, you should see a faint image of Benjamin Franklin in the blank space to the right of the center portrait. If the watermark is missing or doesn’t match the portrait, the bill may be counterfeit. The watermark should be visible from both sides of the note.
Bills $10 and higher feature color-shifting ink on the numerals in the lower right corner. Tilt the bill to see the color change:
This feature is particularly difficult for counterfeiters to replicate accurately.
Genuine U.S. currency is printed using a process called intaglio printing, which gives the bills a distinctive texture. Run your fingernail over the portrait and you should feel fine ridges. Counterfeit bills often feel smooth or different from genuine currency.
The background of genuine bills contains extremely fine lines that are difficult to replicate. Counterfeit bills often show blurry, broken, or missing lines when examined closely.
Genuine bills contain tiny text that’s nearly invisible to the naked eye but can be seen with a magnifying glass. For example, on most bills, you can find “THE UNITED STATES OF AMERICA” printed in micro text around the portrait. Most home printers and copiers cannot reproduce this level of detail so that it’s readable.
U.S. currency is printed on special paper made of 75% cotton and 25% linen. This gives it a distinctive feel that’s difficult to replicate. The paper also contains randomly scattered red and blue fibers embedded throughout. Counterfeiters often try to simulate these by printing red and blue lines on the paper.
The newest $100 bills feature a 3D security ribbon woven into the paper. When you tilt the bill back and forth, the images on the ribbon change from bells to the numeral “100.” This is one of the most advanced security features and is extremely difficult to counterfeit.
While knowing the security features is essential, several tools can help business owners more easily detect counterfeit bills:
These pens contain an iodine solution that reacts with starch in regular paper. When marked on genuine U.S. currency, the mark remains golden or amber. On most counterfeit bills printed on regular paper, the mark turns dark brown or black.
Limitations: While inexpensive and easy to use, these pens have limitations. They only detect bills printed on regular paper and can’t identify sophisticated counterfeits printed on paper similar to real currency or altered bills (when a lower denomination is washed and then reprinted as a higher denomination).
You may want to have a magnifying glass available to inspect fine printing details, such as microprinting and other security features that are difficult to reproduce.
Limitations: If someone is not trained in what genuine security features should look like, important details can be overlooked or misinterpreted. Additionally, counterfeiters are continuously improving their printing techniques, sometimes producing fakes with convincing fine details that can fool even a close inspection.
Under UV light, genuine bills display specific glowing features:
Limitations: While more reliable than counterfeit pens, UV verification requires proper training to know what to look for in each denomination to avoid altered bills.
For businesses that handle large amounts of cash, currency counting machines with built-in counterfeit detection technology can be a worthwhile investment. These machines use multiple methods to verify bills, including:
While more expensive than other tools, these machines offer high-speed processing with excellent accuracy.
Limitations: These apps are designed to supplement, not replace, traditional methods of currency verification and should be used in conjunction with other detection tools and training.
If you suspect you’ve received a counterfeit bill, follow these steps:
As a business owner, ensuring your staff is well-trained to detect counterfeit currency is crucial. Remember, you will not be reimbursed for counterfeit currency, so your best protection is prevention through careful examination of bills.
Consider implementing these practices:
At American Riviera Bank, we remain committed to protecting our community’s financial well-being. Our staff members are trained to identify counterfeit currency and can provide guidance if you have concerns about suspicious bills or would like assistance training your staff.
For more information on identifying counterfeit currency, visit the U.S. Currency Education Program website at uscurrency.gov or contact your local American Riviera Bank branch for additional resources and guidance.
Sources
1. U.S. Secret Service, “Counterfeit Investigations,” 2025
2. Federal Reserve, “How do I determine if a banknote is genuine?” April 2025
