How to Know if Money Is Fake: Complete Guide to Counterfeit Recognition

Fake money isn’t just a movie plot prop. It’s real, and it’s out there, happening to regular people every day. In fact, the U.S. Secret Service removes tens of millions of dollars in counterfeit currency from circulation every year.  Maybe you sell a used iPhone on Facebook Marketplace and someone pays in cash. Perhaps you run a small shop, and a customer hands you a crisp $100 bill.  Counterfeit money still shows up in wallets, businesses, and even online transactions.

This matters because counterfeit bills don’t just cause losses. They can also drag you into legal trouble if you accidentally pass them on.  So how do you protect yourself? How do you know if money is fake when it lands in your hands? That’s exactly what we’ll cover. By the end, you’ll know how to check if money is fake, what security features to look for, and what steps to take if you ever find a suspicious bill.

How Much Fake Money Is in Circulation?

According to research from the Federal Reserve, the amount of counterfeit U.S. currency in circulation is relatively small compared to the amount of genuine notes. Estimates suggest that between $70 million and $200 million in counterfeit currency is circulating at any given time, out of roughly $2.2 trillion in genuine U.S. notes worldwide. That means only a tiny fraction — less than 1 in 10,000 notes — is likely to be fake. Most counterfeit notes are $20 bills, followed by $100 bills.

But it’s still enough to cause major headaches for businesses and individuals. If you accept a counterfeit banknote, you’re stuck with the loss, as banks or authorities won’t reimburse you. That’s why knowing how to spot fake money matters so much.

The First Line of Defense: Checking for Fake Bills on the Spot

The best way to detect counterfeit currency is to be familiar with genuine bills. Start with a simple comparison. If you suspect a bill, hold it next to another of the same denomination that you know is genuine. Although subtle, differences may quickly become apparent. Counterfeit bills often have colors that are just a little off or images that look too flat. The portrait on a real bill has fine details and shading. On a fake, it might look blurry, like it’s been photocopied.

Examining In Detail: How to Spot Fake Money

Modern U.S. notes are designed with layer upon layer of security. Counterfeiters may be able to copy one or two features, but it’s much harder to replicate them all. That’s why it’s smart to check more than one feature before you trust a bill.

1. Feel the Paper

Genuine U.S. currency is printed on a special blend of cotton and linen. It doesn’t feel like printer paper that feels slightly rough and distinct. Real bills also use raised printing, called intaglio, which you can feel if you run your fingers over the numbers or the portrait. That texture is hard to fake. A counterfeit banknote usually feels too smooth, too thin, or too stiff.

2. Check the Security Thread

Every bill $5 and above has a security thread. This is a thin strip embedded in the paper, running vertically. The security thread’s location changes depending on the denomination. For example:

• On the $20 bill, the thread runs to the left of Andrew Jackson’s portrait.

• On the $100 bill, it’s to the left of Benjamin Franklin’s portrait.

Hold the bill up to the light to see the thread. Genuine threads are visible and glow a specific color under ultraviolet light (more on that in a second).

3. Look for Color-Shifting Ink

On $10, $20, $50, and $100 bills, check the numeral in the lower right-hand corner of the front side. Tilt the note. The number should shift from copper to green when you tilt. This color-shifting ink is one of the clearest giveaways of authenticity. Fake bills often just use flat ink with no shift at all.

4. Find the Security Ribbon

While U.S. dollars don’t have the flashy holograms of euros or pounds, they do feature subtle color-shifting elements. The newest $100 bill comes with a 3D security ribbon woven into the paper, not printed on top. Tilt the bill back and forth. You’ll see tiny bells inside the ribbon that change into numbers. This motion effect is nearly impossible to replicate with regular printing, and counterfeits rarely get this right.

5. Examine the Serial Numbers

Every bill has a unique set of serial numbers. These should match (left and right sides of the note), be evenly spaced, and perfectly aligned. Crooked, fuzzy, or duplicated serials are red flags for counterfeit bills.

6. Inspect Microprinting

Pull out a magnifying glass. Genuine notes feature microprinting – microscopic text hidden in places like the portrait collar or near the security thread. On a $100 bill, for instance, you’ll see “USA 100” repeated.  On a genuine bill, they’re sharp with clean detail, even under magnification. On a counterfeit note, these tiny details are usually missing, smudged, pixelated, or unreadable.

7. Use Ultraviolet Light

Counterfeit detection often relies on UV technology. With a UV light, you can reveal features invisible to the naked eye, as some bills have fibers embedded that glow under ultraviolet light. Genuine notes glow in specific colors under UV light scanners:

• $5 bill: blue

• $10 bill: orange

• $20 bill: green

• $50 bill: yellow

• $100 bill: pink

If a note doesn’t glow at all, or glows the wrong color, it’s likely counterfeit currency.

Advanced Machines & Tools You Can Use at Home

Even without advanced detectors, you can use informational resources and simple tools at home or work to help you check if money is real, if you ever have doubts, such as:

• UV light pens and lamps for quick checks.

• Counterfeit pens (iodine-based)—useful but not foolproof. Many modern fakes pass this test.

• Magnifying loupes for fine detail.

• Currency detector machines for businesses handling large cash volumes.

• Official guides like the U.S. Currency Education Program show you all the latest security measures.

Banks, large retailers, and foreign exchange platforms like ours go even further to detect counterfeit money. Professional machines combine multiple checks—magnetic ink, infrared features, UV light—to verify authenticity in seconds and are common in places where large amounts of cash change hands.

• Counterfeit Money Detector Machines: Devices that scan UV, magnetic ink, and infrared features. They’re fast and more reliable than manual inspection alone.

• Counterfeit Detection Pens: Cheap and easy. These pens react to the paper’s composition. If the mark turns dark, the bill is likely fake. But keep in mind that counterfeiters sometimes use real bleached bills to trick these pens, so this method is not 100% reliable alone.

• UV Light Counterfeit Detection Tools: Handheld ultraviolet lights are small but effective for checking security features. UV light scanners are larger, more reliable versions often used in retail or banking.

• Infrared & Spectrum Tests: Under infrared light, genuine notes may reveal patterns that disappear or transform. These are high-level tests mostly used by banks and labs.

• Polymer Substrate Fingerprinting: Some countries (like Canada or Australia) use polymer notes with transparent windows. These have unique “fingerprints” in their coating. U.S. dollars are still cotton-linen, but polymer detection techniques are growing globally.

• AI Image Analysis: Cutting-edge research uses machine learning to scan and detect subtle inconsistencies in counterfeit banknotes. That’s not something you’ll carry in your pocket or that is mainstream yet, but it shows where counterfeit detection is heading.

Red Flags of Counterfeit Bills

Not every fake is high-tech. In fact, most counterfeit notes in circulation are sloppy. Here’s what to look for:

• Colors that look flat or washed out

• Portraits that look blurry instead of detailed

• Borders that bleed into the background

• Missing or misplaced security features

• Strange feel or smell - counterfeit banknotes may feel stiffer, smoother, or even smell chemically treated.

If a bill just looks or feels “off,” trust your instincts.

Common Myths About Detecting Fake Money

There’s a lot of bad advice floating around regarding how to spot fake money. Let’s clear up a few.

• "If the bill feels thick, it’s real.” Not true. Paper thickness varies with wear.

• “Counterfeit pens never fail.” Wrong again. As mentioned, fake notes printed on bleached real bills can fool these pens.

• “Only big bills get counterfeited.” Actually, $20 bills are the most common counterfeit notes in circulation.

• "Old bills are safe." Also not true. Older designs are easier to counterfeit because they lack modern features.

• Shiny = it’s real. Counterfeiters are good at adding shiny foil or holograms. What they can’t easily replicate are the layered security measures, like the UV glow or the color-shifting ink.

What to Do if You Suspect Counterfeit Currency

So, what if you find yourself staring at a bill that feels wrong?Because yes, there’s a right and wrong way to handle that situation. First, don’t panic. Here’s what to do next if you actually find yourself holding a fake note:

1. If you’re in a shop or business setting, politely refuse the bill and ask for another form of payment. Don’t hand it back to the passer if you suspect that might put you at any risk.

2. Don’t try to pass it along or spend it. That’s illegal. Using counterfeit currency, even accidentally, can make you liable.

3. Write down details. Note when and where you received the bill, and from whom, if possible. This information helps track down counterfeiters.

4. Handle carefully. Try not to fold or crumple it to preserve evidence. Place it in an envelope.

5. Take it to a bank to confirm authenticity. Local banks have trained staff and equipment to authenticate notes.

6. Report a counterfeit to local authorities. In the U.S., the Secret Service is the primary agency for counterfeit investigations, and police departments, banks, and cash processors will submit suspected counterfeit currency to USSS. If you represent one of these entities, you can find more details on submitting suspicious currency to the Secret Service here.

Why Trust Matters in Currency Exchange

The impact of fake bills goes beyond one bad transaction. If you accept a fake 100 dollar bill, you lose $100. If you’re a business, those losses can add up. Stores lose revenue and trust when counterfeit notes slip through. If you pass it on, you could face legal consequences. On a bigger scale, widespread counterfeiting undermines trust in currency itself. That’s why governments invest so heavily in anti-counterfeiting technology, and why we take it seriously at US First Exchange.

Here’s where peace of mind comes in. If you’re exchanging currency — whether for travel, business, collecting, or investment — you shouldn’t have to worry about fake money and counterfeit bills. That’s why licensed and registered platforms like US First Exchange exist. We don’t just move money; we protect trust. 

That means using strict security measures and advanced De La Rue machines, renowned for their accuracy in verifying NID notes to authenticate every bill. With us, you can buy and sell global currencies with confidence, knowing the money in your hands is real.

Security Measures Businesses Can Take

If you run a store, restaurant, or any business that handles cash, counterfeit detection should be part of your daily operations. Here’s how to tighten up:

• Train staff on the main security features of U.S. notes (and other currencies if needed).

• Keep a UV light or UV light scanner at the register.

• Use counterfeit detection pens as a first step, but confirm with other tools.

• Have a clear procedure for handling suspicious bills.

By combining training with tech, you drastically reduce your chances of being stuck with counterfeit money.

Protect Yourself By Learning How to Tell If Money Is Fake 

Counterfeit bills aren’t going away anytime soon. But with a little knowledge, you can protect yourself or your business. Learning how to know if money is fake doesn’t mean memorizing every security feature ever invented, but knowing the handful of checks that counterfeiters struggle to copy. It also means understanding the limits of tools like counterfeit pens and knowing what to do if you find yourself holding one.

Remember:

• Know how to spot fake money by checking paper, ink, and built-in features.

• Use tools like counterfeit detectors, UV light, and pens wisely.

• Always report counterfeit currency if you find it.

• Work with trusted platforms like US First Exchange when buying or selling currency to avoid risk in the first place.

The best defense against counterfeit currency is simple: stay alert, know the features, and trust reputable sources for your money. While this guide focuses on U.S. dollars, remember that different currencies use different techniques. Canadian bills are polymer and have transparent windows. Euros use holograms and foil strips. Some Middle Eastern currencies include advanced color-shifting foils. Stay informed accordingly.

FAQs

Anything else on your mind?

Can ATMs Detect Fake Money?

Yes, most modern ATMs can detect fake money using technologies like ultraviolet (UV) and infrared (IR) light, magnetic ink detection, and by checking the banknote's size and thickness. While the chances are low, if a counterfeit bill slips through, the bank will likely find out during a later audit, deduct the amount from your account, and might contact authorities. Conversely, if an ATM rejects a bill, it's likely due to damage or it being a poor-quality fake. 

How to Detect Fake Money with a Phone?

Use your smartphone’s camera, zoom, flashlight, and a careful eye if you suspect a fake note to check:

• Detail quality (blurry or uneven printing, fuzzy portraits)

• Serial numbers (do they match, are they evenly spaced?)

• Presence/placement of features (watermark, thread location) when backlit with a flashlight

• Color-shift behavior (by photographing at angles)

• Microprinting clarity, if you can capture a clear close-up using micro modes.

Compare side-by-side with an official image of the same denomination (U.S. Treasury / Federal Reserve images are best) and compare details. Use a trusted app only as a second opinion. Some apps claim to identify counterfeit notes by analyzing photos. They can be helpful, but they’re not foolproof. Don’t rely on them alone and always take a suspicious note to your local bank for authentication.

How to Check If a $20 Bill Is Real?

Hold it to the light to see Andrew Jackson’s watermark clearly, check the security thread that glows green under UV, and tilt the note - the lower right “20” should shift from copper to green. A counterfeit 20-dollar bill will lack the glow or details in the watermark or fine print.

How to Tell If a $50 Bill Is Counterfeit?

Look for the Ulysses Grant watermark under the light, the yellow glowing thread under UV light, and raised printing on the portrait. When tilting the note, the number “50” in the lower right corner should shift from copper to green.

How to Detect Counterfeit $100 Bills?

Tilt the note. The blue 3D security ribbon (the bells should change to 100s and move), while the large “100” in the lower right corner should shift from copper to green, thanks to color-shifting ink. Hold the bill to the light, and check the watermark – you should see a faint image of Benjamin Franklin to the right of the portrait. A fake 100 dollar bill will usually miss at least one of these