Retail Counterfeit Detection – How to Protect your Business

For as long as human beings have traded using currencies, there have been those who have made their living less salubriously, through counterfeiting. Forgers and counterfeiters are not to be underestimated – these are clever, skilled fraudsters, with absolutely no scruples or conscience as to how their actions will affect your business. If you take hard currency, electronic payments, or any other form of payment for a service or product, then counterfeiting detection should be a key concern.

As we’ve become more technologically advanced, we’ve created new and more complex ways of trying to beat the counterfeiters. It’s sometimes difficult to keep up, but thanks to innovative and robust detection methods, counterfeiters are having a much harder time trying to pass off forged currency on unsuspecting businesses.



Not just a big business problem


Counterfeiting isn’t just confined to the world of high finance. The smallest shopkeepers can be vulnerable to counterfeit currency – and in fact, they are more likely to be targeted by criminals. Even honest, genuine members of the public can act as unwilling portals for counterfeit currency without even knowing it. Once it’s in circulation, it can be very difficult indeed to tell if that ten-pound note or even that pound coin is real or a fake.


However, businesses can do something to protect themselves against counterfeit currency and fraudulent transactions. Let’s take a look at the most up to date methods currently on offer to help you track and catch the counterfeiters, as well as best practice and training methods so that everyone is aware of what to look for when a counterfeiter comes through the door.


Point of Sale counterfeit detection in Retail – how to spot that dodgy ten-pound note


Shops, especially small shops, are at most risk of point-of-sale counterfeit currency. Forged currency can be incredibly difficult to spot, but no forger in the history of counterfeiting has ever produced the ‘perfect’ dodgy note or coin. The Bank of England publishes a regularly updated booklet, dealing the key visual indicators to look for when examining banknotes and coins (with the latest version including tell-tale signs for the new polymer notes). These include things such as:

  • The exact dimensions of all current UK banknotes
  • Positioning of key details such as metallic images, colors of borders, and foil patches
  • The tactile qualities of notes, such as raised print, and fine details such as micro-lettering
  • Ultra-violet features that cannot be seen with the naked eye but can be picked up by banknote checking machines


For existing paper notes, you need to look out for watermarks and holograms, as well as ultra-violet features and raised print. Copies of the latest version of ‘Banknotes – Take a Closer Look’ can be downloaded for free at www.bankofengland.co.uk


Technology to help you spot counterfeit currency at the checkout


A quick visual look may enable you to identify really obvious counterfeit notes, but it may be much harder to spot a ‘good quality’ fake. This is where the next line of defense comes in – Counterfeit Detector pens and Banknote checkers.


Counterfeit Detector pens – These contain a specially developed chemical that reacts with fake notes. The most common method is that if a pen is used on the watermark of a paper note and the note is fake, the mark will turn black. The trouble is that these pens commonly do not work on polymer notes, only paper currency. However, the simple act of using a detector pen can also have quite a powerful psychological effect on a counterfeiter, as the fear of discovery can prevent them from even trying to pass you a counterfeit note in the first place.


As the UK moves over to polymer notes (with the next issue – the new £20 – due in 2020), these pens may have to adapt to keep up with the new types of notes or become obsolete. As it is they still have a place at the till and offer a quick, easy, and very cheap deterrent that makes them particularly popular with smaller shops.

Counterfeit note detectors – small, portable, and affordable, these handy devices use ultra-violet light to detect the watermark in a note. If the note is fake, then it will generally glow purple. (Again, this is applicable to paper notes only.) Banknotes include markings that are invisible to the human eye but show up under ultraviolet light with a wavelength of 365 nanometers. A good quality detector will quickly illuminate any UV markings so that a till operator can compare them against the current Bank of England guidelines.


More up-to-date note checkers also work with the new polymer notes, and will even check foreign currency as well as UK banknotes. They’re cheap, easy to use, and rely on tried and tested technology. UV counterfeit note detectors are the minimum any small business that accepts hard currency at the point of sale should be used to identify and reject fake notes.

Ferromagnetic ink detection – The ink you see on banknotes doesn’t just have a particular pigment, it also has complex magnetic patterns incorporated into the design. In paper notes, there are also metallic threads woven through the paper. Ferromagnetic ink detectors can identify these patterns. They can also detect clever fakes, even if they have used ferromagnetic ink. FM ink has a particular signature, and detectors can identify specific inks, so it’s easy to spot a fake even if it looks almost perfect.

Spectrum analysis – Top-end detectors can also use spectrum analysis to ensure that a checked note conforms to the color analysis of a genuine note that it has stored in its memory. Each type of note has its own specific palette of colors, which a spectrum analyzer can detect and compare in an instant.


The human element to deterring counterfeiters - Training your staff


One of the hardest parts of stopping counterfeit currency finding its way into your cash register is dealing with the ‘human element’. How successful you are depends on how well your staff are trained to handle simple currency checks before accepting payment. If you have a very small shop and only one or two members of staff then it can be easier to instill best practice methods in their training to make sure everyone is practicing due diligence at the till. In larger stores, however, it can be very difficult to monitor how your employees are policing their tills, and whether they are practicing due diligence or not.


Training on current UV light technology should be relatively straightforward – every till operator should be able to mark an X on a banknote with a pen and note any color changes or pass a note under a UV note detector. The hard part can be ensuring that they do it every time. It only takes one lapse in diligence and you could end up with a couple of dodgy £20 notes in your till.


How to train your staff


Most shop staff are very aware of electronic fraud through counterfeit, stolen or cloned cards. But in fact, currency counterfeiting is still a huge problem, and the UK’s currency is the most counterfeited in the world. Both notes and coins can be fake, and at first glance, it’s impossible to tell which is which. Unless you’re a machine (that’s why a parking meter will accept one pound coin but reject another – the rejected one is micrograms lighter and is instantly recognized by the machine as fake!).

Counterfeit currency detection is a matter of ‘damage limitation’ rather than complete prevention. But by instilling an easy-to-follow system into your check-out procedures, you should be able to stop the majority of dodgy notes getting through.

  • Make the use of detector pens/machines compulsory – When you employ new cashiers, make it quite clear (including adding a clause to their employment contract if necessary) that the use of detector pens and UV machines is compulsory for every cash transaction, especially large amounts (where multiple fake notes can often be passed).
  • Till cameras – the use of CCTV around till areas not only acts as a deterrent to potential fraudsters but can also encourage staff to do the required checks. It is important to strike a balance, though, between reasonable observation and workplace harassment, so ensure staff are fully aware of the presence of till cameras and that they are being used.
  • Training in body language – Although it’s often innocent shoppers who are inadvertently passing counterfeit notes, sometimes fraudsters do the dirty deed themselves. A short course in body language ‘tells’ can help staff spot people acting suspiciously, whether they’re trying to pass counterfeit notes or carry out a fraudulent electronic transaction.
  • Regular staff updates on counterfeit alerts – Make sure that your staff are regularly updated on the latest counterfeit alerts from the Bank of England, and what to look for in a particular batch of counterfeit currency.
  • Internal training courses for new staff – Make counterfeit detection a key part of every new employee’s induction and training, setting out best practice methods including how to confront a customer who has a counterfeit note, detection, and due diligence.
  • Refresher courses for existing staff – It’s not just new staff that may need training – existing staff may occasionally need a refresher in how to spot counterfeit currency, especially with the new polymer notes now coming into circulation. Don’t forget that if you renew your counterfeit detectors then you must ensure that everyone knows how to use them correctly.


Expect a few notes or coins to get through


According to the Bank of England’s own figures, approximately 347,000 counterfeit banknotes with a face value of £7.5 million were found in 2016 and taken out of circulation. They estimate that around 0.5% of UK bank notes are fake. But while the actual percentage of fake banknotes may be very small, they can still have a big impact on businesses, especially small firms with slim profit margins.

Inevitably, the occasional dodgy tenner may slip through. But by practicing due diligence at the till and using the latest detectors to stop counterfeit notes getting into your end-of-day takings, you should be able to minimize the impact on your business.


To ensure that your banknotes and coins are legitimate, get the latest innovations and technology at the Anti-Counterfeit & Currency Expo (November 6-8, 2018 in Las Vegas)

Find out more about the Anti-Counterfeit & Currency Expo here.

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