The Counterfeit Conundrum: Why Fake Cash Hurts Everyone

What harm can a little fake cash do, right? While receiving a dud note now and then may seem like more of an irritation than a catastrophe, counterfeit currency actually poses a very serious threat both to individual businesses and the wider economy. Today the LJ International team digs deeper into the woes of counterfeiting, as well as how money counters can help you reduce the effects of this crime on your business.

Does Counterfeiting Really Matter?

Counterfeit currency has major effects both on the person receiving the fake note and the wider economy. Of course, depending on the size of the loss, receiving a batch of ‘dud notes’ can be irritating or even catastrophic for the individual or business’ bottom line. Sadly, most countries will not reimburse citizens who find fake currency, either, even when it’s confiscated. 

But the introduction of fake cash into the wider economy actually helps to devalue the currency overall, and subtly increases inflation. In turn, this leads to higher prices for goods and services. With many countries now reliant on paper notes, the impact can be surprisingly large, and can even lead to decreased investment confidence in currencies with counterfeiting issues.

In fact, South African legislation is currently being examined for its effectiveness in counteracting counterfeiting, hoping to improve our governmental response to the risks. Currently, we have two Acts in place, allowing for both punitive measures and up to 15 years imprisonment! 

South Africa’s Counterfeit Measures

Our current approach to combating widespread counterfeiting in South Africa is a multi-agency one. Key players include the South African Reserve Bank, the South African Mint, and the South African Note Company, alongside the Departments for Constitutional Development and Constitutional Development and even Interpol. The idea is to not only track, identify, and punish counterfeiting rings, but also to address social and economic factors that contribute to allowing the crime to flourish. The sooner new counterfeiting operations can be addressed, the less of an economic effect the crime will have.

How Can I Limit Counterfeiting in My Business?

While public engagement and the wider macroeconomic view is all well and good, how can you limit the effects of counterfeiting closer to home- your lost revenue?

Note counters and money counting machines remain the front-line of counterfeiting defence for businesses of all sizes. Even a small and basic model offers you the ability to check, sort, and weed out dodgy notes in real time, with reduced theft risk and more reliable results. Most note counters are designed to seek out and confirm the anti-counterfeiting measures put in place on legitimate banknotes through technological tricks. This includes checking for UV markings (only present on the older ‘Big 5’ banknote series in SA), magnetic threads, and other security features.

It’s always a good idea to invest in a money counting machine that checks more than one security feature, as some counterfeiting operations can be smart indeed. While the chances of a counterfeit note meeting all security benchmarks are slim, UV markings in particular can and have been spoofed- one of the reasons only older notes retain this feature. It also pays to stay up-to-date on current counterfeiting trends and keep your staff educated on the manual checks they can do at the point of sale, too. The earlier in your sales funnel you detect the fake, the more chance you have to reject it before you lose revenue. The Reserve Bank regularly makes a list of the features available for everyone to learn.

Counterfeiting has terrible impacts both on the personal and macroeconomic scale, so the more you can do to offset the risk, the better. If you’re keen to find a note counting solution that’s right for your business, LJ International is always here to help and advise, so don’t be afraid to reach out to us today about the perfect solution for your business.