To check for counterfeit money, run three quick tests on the bill in your hand: feel it for the slightly rough, raised ink of genuine currency; hold it up to a light to check the watermark and embedded security thread; and tilt it to see whether the numeral in the lower right corner shifts from copper to green. Real U.S. bills are printed on a 75 percent cotton, 25 percent linen blend with security features that standard printers and copiers cannot reproduce. The $100 is the most counterfeited denomination, followed at a distance by the $20, so those are the two bills worth inspecting most carefully.
Feel the Paper First
Start with your fingers before your eyes. Genuine currency paper is a cotton-linen blend with tiny red and blue fibers scattered through it, and it feels crisp and slightly rough. Ordinary printer paper feels smoother, thinner, or flimsier by comparison. If a bill feels waxy or flat the moment you pick it up, that alone is worth a second look.
The roughness comes from intaglio printing, where heavy pressure forces the paper into engraved metal plates and leaves the ink sitting slightly raised on the surface. Run a fingernail across the portrait, the borders, or the large denomination numbers, and you should feel a faint texture like fine sandpaper. That texture survives years of handling.
On the current $100 note, the most obvious raised printing sits on Benjamin Franklin’s shoulder on the left side of the bill. Run a finger up and down that area and you should feel a distinct roughness. A flat, glossy shoulder is a warning.
Hold the Bill Up to a Light
Every denomination from the $5 up has features embedded inside the paper that only show up when light passes through the bill.
The Watermark
Look at the blank space to the right of the portrait. You should see a faint image built into the paper itself. On most denominations the watermark matches the portrait on the front. The $5 is the exception: its watermark is a large numeral “5” rather than a small Lincoln. Because the watermark is part of the paper, it shows from both sides. A watermark that is missing, that doesn’t match the denomination, or that only appears on one side points to a fake.
The Security Thread
Still holding the bill to the light, look for a thin vertical strip embedded in the paper. Each denomination $5 and above has one, and each sits in a different position across the bill. On the $100, the thread runs to the left of Franklin’s portrait and reads “USA 100” in a repeating pattern. The unique position matters: if a counterfeiter bleaches a $5 and reprints it as a $100, the thread will still be in the $5’s location.
Under an ultraviolet light, each thread glows a specific color: blue for the $5, orange for the $10, green for the $20, yellow for the $50, and pink for the $100. If you handle cash often, a cheap UV flashlight is one of the fastest ways to verify a stack of bills.
Tilt the Bill
On bills of $10 and higher, the large numeral in the lower right corner is printed in color-shifting ink that changes from copper to green as you change the angle. Real ink shifts obviously; a copier or standard printer produces a flat color that stays the same no matter how you hold it.
The $100 carries two more tilt-based features that no other denomination has. A blue 3-D security ribbon is woven into the paper to the right of the portrait. Tilt the bill side to side and the bells and “100” images on the ribbon appear to move up and down; tilt it up and down and they shift side to side. Because the ribbon is physically part of the paper, no printing process can replicate it. Just to the right of the ribbon, a copper-colored inkwell contains an image of a bell that shifts from copper to green as you tilt the note, so the bell appears and disappears inside the well.
Check the Microprinting
Tiny text is printed in several spots on each bill, small enough to look like a solid line to the naked eye but sharp and legible under a magnifying glass. On the $20, “USA20” runs along the border of the blue “TWENTY USA” ribbon near the portrait, and “THE UNITED STATES OF AMERICA 20 USA 20” runs along the border below the Treasurer’s signature. On a counterfeit, this text is usually blurry, broken, or missing, because consumer-grade scanners can’t capture detail that fine. A basic magnifier is enough to check.
Tools Worth Using, and Where They Fail
If you handle a lot of cash, a few inexpensive tools speed up verification. Each has a blind spot worth knowing.
Counterfeit detector pens contain an iodine solution that reacts with the starch in ordinary paper, leaving a dark mark, and stays light or clear on the starch-free cotton-linen of real currency. The pens run about five to ten dollars. Their critical limitation is “washed” bills: counterfeiters bleach genuine low-denomination notes and reprint them as $50s or $100s, and because the paper is real currency stock, the pen reads it as authentic. The Secret Service has noted that the iodine test does not catch bleached-note counterfeits. Treat the pen as a filter for amateur fakes on regular paper, never as your only check.
A UV light catches what the pen misses. A bleached $5 reprinted as a $100 still glows blue under UV, and its thread is in the $5’s position, not the $100’s. Handheld UV lights sold for currency checking run about $10 to $30.
A magnifying glass lets you inspect microprinting when a bill’s feel or color seems slightly off but you can’t put your finger on why. Sharp, clean text is real; blurred or absent text is a fake.
Businesses processing high volumes of cash often use counting machines with built-in authentication. Higher-end models scan both sides of each bill under white light, infrared, and ultraviolet, flagging counterfeits automatically. Prices run from a few hundred dollars for basic units to over a thousand for commercial-grade machines.
What to Do With a Bill You Think Is Fake
If a bill fails any of the checks above, do not hand it back to the person who gave it to you, and do not try to spend it yourself. How you handle it from here matters for both legal and investigative reasons.
- Set the bill aside without handling it more than necessary, and place it in an envelope or plastic bag. Extra fingerprints make the Secret Service’s job harder.
- If someone passed the bill to you in person, write down their physical description, clothing, any vehicle information, and the direction they went, while the details are still fresh.
- For individuals, the Secret Service recommends turning suspected counterfeits over to your local police department. Your bank can also confirm whether a bill is genuine. Police and banks forward confirmed counterfeits to the Secret Service.
Banks, casinos, and other cash processors use a separate route, submitting suspect notes directly to the Secret Service’s Counterfeit Currency Processing Facility on Secret Service Form 1604.
Once you surrender a suspected counterfeit, it will not come back to you if it’s confirmed fake. Genuine notes get returned; confirmed counterfeits are kept permanently, and you will not be reimbursed for the face value. Whoever is holding the fake when it is detected absorbs the loss.
When Passing a Fake Bill Becomes a Crime
Knowingly passing, possessing, or concealing counterfeit U.S. currency with intent to defraud is a federal crime punishable by a fine, up to 20 years in prison, or both. The phrase “intent to defraud” is doing real work. If you unknowingly receive a counterfeit in change and later spend it at a grocery store without realizing it’s fake, you have not committed a federal crime.
The calculation changes the moment you suspect the bill is fake. Trying to spend it anyway, to avoid eating the loss yourself, is arguably the intent the statute requires. Surrender a suspicious bill instead of hoping the next person won’t notice.
Who Ends Up Paying
The government does not reimburse counterfeit losses, and counterfeiters are rarely caught quickly enough to recover funds. Whoever holds the bill when the fake is spotted loses that money.
For a business that accepts a counterfeit during a transaction, the loss is a business expense. In most situations, an employer cannot dock an employee’s wages for accepting a counterfeit unless the employee acted with dishonest intent. If you run a cash-heavy operation, a UV light or automatic authenticator is cheaper than repeated losses.
A business can generally treat counterfeit losses as a theft loss, deductible in the year the loss is discovered. Theft losses for business property are reported on Section B of IRS Form 4684, and any insurance reimbursement reduces the deductible amount. For individuals, personal theft loss deductions have been severely restricted since 2018 and are now available only for losses caused by a federally declared disaster, so a counterfeit you receive in a personal transaction will not generate a deduction.
Some commercial crime insurance policies include endorsements covering counterfeit currency losses, paying out when a business unknowingly accepts a fake during normal operations. Whether your policy includes that coverage depends on the endorsement and your insurer, so check with your provider if you handle significant cash.