Cashiers mark bills with a special pen to check whether the paper is real or counterfeit. The pen contains an iodine-based ink that reacts with starch, a compound found in ordinary wood-based paper but absent from genuine U.S. currency. If the mark stays light or amber, the bill is likely real. If it turns dark blue or black, the paper contains starch, and the bill is suspect.
How the Pen Actually Works
U.S. currency is printed on paper made from 75 percent cotton and 25 percent linen, according to the Bureau of Engraving and Printing. This blend contains no starch. Most counterfeit bills, on the other hand, are printed on regular paper made from wood pulp, which is loaded with starch.
The pen’s ink contains iodine, which forms a visible complex when it contacts starch molecules. On a fake bill printed on standard paper, that reaction produces a dark blue or black mark within seconds. On genuine currency, the iodine has nothing to react with, so the mark stays a pale yellow or light brown and fades quickly. The whole check takes about two seconds, which is why it became a go-to tool at retail registers.
Where the Pen Falls Short
The iodine test has a significant blind spot. Counterfeiters can bleach the ink off a low-denomination bill (like a $5) and reprint a higher denomination (like a $100) on the same paper. Because the paper is genuine U.S. currency stock, the pen reads it as authentic. Changes to U.S. currency since 2004, including denomination-specific security features, have made this trick easier to spot visually, but the pen alone won’t catch it.
Reliability also drops with worn or damaged money. Bills that are older or heavily circulated can absorb the ink differently, sometimes producing misleading results in either direction. Moisture and other environmental conditions affect accuracy too. A pen might flag a perfectly real but soggy bill, or give a clean reading on a high-quality counterfeit printed on the right kind of paper.
Security Features Beyond the Pen
The pen tests only one thing: whether the paper contains starch. Genuine currency has multiple built-in security features that are harder to fake, and many cashiers are trained to look for these as well.
Every bill from $5 up has an embedded security thread, a thin strip woven into the paper that’s visible when you hold the bill up to light. Under ultraviolet light, each denomination’s thread glows a specific color: blue for $5, orange for $10, green for $20, yellow for $50, and pink for $100. A bleached $5 reprinted as a $100 would still have a thread that glows blue instead of pink, and the thread’s printed text would still read “USA FIVE.”
The current $100 bill has two features that are especially difficult to replicate. A 3-D security ribbon is woven directly into the paper (not printed on the surface), and when you tilt the note, images of bells shift to the number 100 and appear to move. A color-shifting bell inside a copper inkwell changes from copper to green as you change the viewing angle. These physical features require specialized manufacturing that counterfeiters can’t easily reproduce with a printer.
How Larger Businesses Detect Counterfeits
High-traffic businesses like banks, casinos, and large retailers often use electronic detectors instead of or alongside pens. These machines run bills through multiple checks at once: ultraviolet sensors verify the security thread’s glow, magnetic sensors detect the unique magnetic properties in genuine currency ink, and infrared sensors analyze characteristics that differ between real and fake notes. Some advanced models also measure a bill’s dimensions and thickness.
These multi-sensor systems catch counterfeits that a pen would miss entirely, including bleached-and-reprinted bills and sophisticated forgeries made with high-quality paper. For businesses processing large volumes of cash, the cost of an electronic detector pays for itself quickly compared to the losses from accepting a single counterfeit $100.
What Happens When a Bill Fails
If a cashier suspects a bill is counterfeit, standard procedure is to avoid returning it to the customer. Retail and institutional policies generally instruct employees to contact a supervisor and then local law enforcement. The suspect note gets placed in an envelope to limit handling, and the cashier writes their initials and the date on the bill’s white border. A copy is made of both sides, and the bill is eventually surrendered to police, who may forward it to the U.S. Secret Service for investigation.
If the person who handed over the bill is still present, they may be asked to wait for police. If they become aggressive, most policies prioritize employee safety over keeping the note. If the person has already left, the cashier documents whatever identifying details they can remember. The business then adjusts its accounting to reflect the loss, since a confirmed counterfeit bill has no value and can’t be deposited.