Is Counterfeiting really a Big Deal?

Here at LJ International, we often mention spotting counterfeit currency as one of the big benefits of our note sorter machines. While it’s obviously frustrating to lose a note here and there to fraud, is counterfeiting really the Big Deal it’s made out to be? Yes, it is- and today the LJ International team looks at counterfeit money detectors.

Economic repercussions

Counterfeiting can actually pose quite a threat to the economy. Maybe you see only R100 here and there, but that fake note you found was part of a larger ‘batch’ of dud notes, on a far greater scale than you may imagine. Criminals deliberately pass them into circulation in small amounts here-and-there to avoid detection.

This helps contribute to a reduction in the value of ‘real’ money, much in the same way the government over-printing notes would- there’s an artificial increase in the money supply that cheapens the buying power of the Rand. It also helps contribute to distrust of paper money. And, of course, the losses. You could carry the brunt of the R100 loss directly, as will many other shopkeepers and store owners, or maybe it will be found at the bank, who passes the loss on to you down the line.

Uninsurable Risk

Counterfeiting issues also lead to an issue known as ‘uninsurable risk’. When it’s seen that a government’s central bank isn’t reacting to things like counterfeiting, it creates a sentiment of distrust for that currency and their overall economic systems. If the central bank- the driving force for all currency-related activity- becomes viewed as untrustworthy, investment slows, loans are not given, and other drivers of economic growth grind to a halt. The last thing a growing economy like South Africa needs!

South African Legislation

In SA, we have two statutes protecting citizens from counterfeiters. These acts carry prison terms of up to fifteen years! But it’s not enough just to punish. We also have multi-agency plans in place to help combat ‘live’ counterfeiting. These agencies include everything from our Justice Department and the South African Reserve Bank through to the South African Note Company and the Mint, as well as Interpol itself. Through sharing of information and expertise, as well as addressing social issues that encourage counterfeiting, attempts are made to solve the issue before it happens.

The earlier counterfeiting schemes can be identified, the more their effect on people like you and I can be limited. This is, of course, why retailers and other invested parties are informed about new security features on notes and so on. 

How can I identify counterfeit notes?

To date, note counting machines are still the fastest, most effective way to identify counterfeit notes, as they have the protection inbuilt. They are created to check common security features, from UV lighting to magnetic thread and paperweight/size detection. Did you know that, of all the security features present, making sure the exact paper composition is correct is one of the most important? It’s the one thing to date that’s really difficult to duplicate.

Of course, this isn’t the only step you can take to protect yourself. Make sure staff are trained to visually inspect notes for security features. You can also consider a UV counterfeit detector at the til or sales point. These aren’t foolproof, as many fakes can spoof UV markings, but it helps weed out some fakes. Do note that legitimate ‘Mandela series’ notes don’t have UV markings anymore, however.

Counterfeit notes can be a massive economic problem if not adequately handled by a government. Protect yourself and your business with a note handling machine with built-in counterfeit detection today. The LJ International team can help you find the perfect match, so don’t hesitate to get in touch!