Why Do Cashiers Mark Bills With a Pen?

Cashiers commonly mark bills with a pen in various retail and service settings. This routine action, often performed quickly, serves a specific purpose in safeguarding financial transactions. While it might seem like a simple scribble, this practice is part of a broader effort to maintain the integrity of cash flow within businesses.

The Primary Reason for Bill Marking

The primary reason cashiers mark bills is to detect counterfeit currency. Businesses face significant financial losses when unknowingly accepting fake money, as they lose the value of the bill itself along with any goods or services provided. The Secret Service reported that counterfeit money caused businesses losses totaling millions of dollars in a recent year. Banks are required to confiscate any counterfeit bills presented for deposit without reimbursement, meaning the business bears the full loss.

Accepting or distributing counterfeit money, even unknowingly, can also harm a business’s reputation and lead to distrust among customers and suppliers. If a cashier suspects a bill is counterfeit based on the pen’s reaction, the bill is confiscated and not returned to the customer. This prevents the fake currency from circulating further, and law enforcement may be involved to investigate the incident.

How Counterfeit Detection Pens Function

Counterfeit detection pens contain an iodine-based solution designed to react with different paper compositions. Genuine United States currency is printed on a unique blend of cotton and linen fibers, which does not contain starch. In contrast, most regular paper, often used by counterfeiters, is wood-based and contains starch.

When the pen’s iodine solution is applied to a genuine bill, the mark will appear as a pale yellow or remain virtually unchanged. If the pen is used on a counterfeit bill printed on starch-containing paper, the iodine will react with the starch, causing the mark to turn a dark brown, black, or blue color. This chemical reaction provides a quick visual indicator for cashiers to assess a bill’s authenticity.

Additional Security Features of Currency

While counterfeit detection pens offer a quick initial check, they are not foolproof and have limitations. Sophisticated counterfeits, such as those made by bleaching lower-denomination genuine bills and reprinting them with higher values, can sometimes bypass the pen test because they use authentic currency paper. Relying solely on these pens can leave businesses vulnerable to more advanced counterfeiting techniques.

Genuine U.S. currency incorporates multiple security features to deter counterfeiting and aid verification. These include:

Watermarks: faint images visible when held to light, often mirroring the portrait on the bill.
Security threads: embedded vertical strips that glow a specific color under ultraviolet (UV) light and contain microprinted text, with each denomination having a distinct thread placement and color.
Color-shifting ink: changes color when tilted, typically seen in the numeral on the lower right corner.
Microprinting: tiny, almost imperceptible text.
Raised printing: gives genuine bills a distinct tactile feel due to the printing process.
Unique serial numbers.
Small red and blue security fibers embedded throughout the paper.