You're standing at a busy register. The line is out the door. Someone hands you a crisp $100 bill that feels just a little too smooth, maybe a bit stiff. You reach for that yellow marker. You swipe it. If it stays yellow, you're good. If it turns black, someone is trying to scam you. Simple, right? Well, sort of.
The ubiquitous pen to test fake money is a staple in retail, but honestly, most people using them don't actually know what’s happening on a chemical level. They just trust the color. It’s a bit of a high-stakes science experiment happening over a cash drawer. But here’s the kicker: these pens aren't actually "detecting" counterfeit ink or complex watermarks. They are just looking for starch.
The Chemistry Behind the Swipe
Basically, these pens are iodine dispensers. That’s it. It’s the same stuff you might have used in middle school science to see if a potato has starch in it.
Standard printer paper—the kind you buy at an office supply store—is made from wood pulp. To make that paper white and crisp, manufacturers use starch as a sizing agent. Authentic United States currency, however, is not "paper" in the traditional sense. It is a blend of 75% cotton and 25% linen. Because it’s a fabric-based material, it doesn't contain starch.
When you use a pen to test fake money, the iodine in the ink reacts with the starch in wood-pulp paper to create a dark, bluish-black stain. If there’s no starch, the iodine just leaves a faint yellow or clear mark that eventually fades. It’s a binary test. Starch equals fake. No starch equals (theoretically) real.
But the world of counterfeiting has changed a lot since these pens became popular in the 1990s.
Why Your Counterfeit Pen Might Lie to You
If you rely solely on a pen, you’re going to get burned eventually. Counterfeiters aren't stupid. They know about the iodine test.
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One of the most common ways to beat the pen is "bleaching." A criminal takes a genuine $1 bill and soaks it in a chemical solution—sometimes even just standard household degreaser or OxiClean—to strip the ink. They are left with a blank piece of authentic, starch-free currency paper. Then, they print a $100 image onto that paper.
Guess what happens when you use a pen to test fake money on a bleached bill? It stays yellow. The pen thinks the paper is real because, well, technically it is. But the denomination is a lie. This is why you’ll see experienced cashiers holding bills up to the light even after they use the pen. They are looking for the security thread and the watermark, which won't match the printed face of a bleached bill.
Then there is the "hairspray trick." Some low-level counterfeiters found that coating standard paper in a heavy layer of hairspray or certain clear lacquers can create a barrier. This prevents the iodine from soaking in and reacting with the starch. It's not perfect, but in a dimly lit bar or a fast-paced retail environment, it’s often enough to pass a quick glance.
The Rise of "High-Grade" Fakes
We also have to talk about the "Supernote." These are incredibly high-quality counterfeits, often suspected to be produced by state actors with access to professional-grade presses and non-starch paper. A pen to test fake money is completely useless against these. If the counterfeiter can source paper that is cotton or linen-based, the chemistry of the iodine pen is rendered obsolete.
Honestly, the pen is a deterrent for the "lazy" counterfeiter. It stops the kid who printed a twenty-dollar bill on his home inkjet. It doesn't stop professional operations.
How to Actually Spot a Fake Without Relying on a Pen
If you want to protect your business, you have to look past the marker. The U.S. Treasury has spent millions on security features that are much harder to fake than "starch-free paper."
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The Feel of the Paper: Genuine bills have "raised printing." If you run your fingernail across the portrait’s vest or the "United States of America" text, you should feel a distinct texture. It feels rough. Most counterfeits feel flat or unnaturally smooth because they are printed using different methods.
The Security Thread: Hold the bill up to a light. You should see a thin vertical strip embedded in the paper. On a $100 bill, it says "USA 100." On a $20, it says "USA TWENTY." If you’re holding a $100 bill but the strip says "USA FIVE," you’re looking at a bleached five-dollar bill.
Color-Shifting Ink: Look at the number in the bottom right corner. On denominations of $10 or higher, tilt the bill back and forth. The color should shift from copper to green. On the newer $100 bills, there is also a 3D Security Ribbon that shows bells changing to 100s as you move the note.
The Watermark: There should be a faint image of the person on the bill in the white space to the right of the portrait. It should be visible from both sides when held to the light. If it’s not there, or if it looks like it was drawn on the surface rather than being inside the paper, it’s a fake.
The Cost of Being Wrong
For a small business, a fake $100 bill is a direct hit to the bottom line. You lose the $100 value, and you lose whatever product the scammer "bought" from you. Plus, if you try to deposit that fake money at a bank, they will confiscate it. You don't get a refund from the government. You're just out the money.
Using a pen to test fake money is better than doing nothing, but it shouldn't be your only line of defense. Think of it as a first-pass filter. It catches the amateurs. For everything else, you need to use your eyes and your hands.
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Modern Alternatives to the Iodine Pen
Since the iodine pen has known vulnerabilities, many businesses are moving toward UV lights or electronic scanners.
UV lights are great because the security threads in U.S. bills actually glow different colors under ultraviolet light. A $5 glows blue, a $10 glows orange, a $20 glows green, a $50 glows yellow, and a $100 glows pink. It’s very hard for a counterfeiter to replicate that specific fluorescent reaction across different denominations.
Electronic "motorized" detectors are even more advanced. These machines pull the bill through and check for magnetic ink, infrared patterns, and paper density. They are much more expensive than a $5 pen, but they are nearly impossible to fool. If you handle a lot of cash, especially large bills, the investment usually pays for itself by catching just one or two high-quality fakes.
What to Do if You Find a Fake
If the pen to test fake money turns dark or you notice the watermark doesn't match, you are in a weird spot.
First, don't put yourself in danger. If a customer seems aggressive, don't play hero over a piece of paper. If possible, delay the person and call local police or the Secret Service. If they leave, try to remember their appearance or get a license plate number. Do not give the bill back to them if you can help it; write your initials and the date on the border of the bill and put it in an envelope.
Handling it as little as possible is key so that any fingerprints remain intact for investigators.
Actionable Steps for Cash Handling
To keep your cash drawer safe, don't just hand a marker to your employees and call it a day.
- Train for Texture: Teach your staff to feel for the raised ink on the shoulders of the portraits. It is the fastest, most reliable manual check.
- Check the Strip: Make it a rule that any bill $20 or higher must be held to the light to verify the security thread matches the denomination.
- Update Your Pens: If you use pens, replace them often. They dry out or become contaminated with dirt and oils, which can lead to false positives or negatives.
- Layer Your Defense: Use the pen for a quick check, but use a UV light for $50s and $100s.
Relying on a single tool—especially one based on 19th-century chemistry—is a gamble. The pen to test fake money is a useful part of a toolkit, but it isn't the whole toolkit. Stay observant, trust your hands more than the ink, and always look for the thread.