Backpackers, flashpackers and other long-term travelers have to be on their toes when it comes to safety and security issues on the road. Obviously, not enough awareness and common sense can get you into trouble and too much concern will make you overly paranoid. As a traveler, you prepare for the worst and hope for the best. One thing I never expected to run into was counterfeit currency.
When you first step foot in a new country, one of the first things you need to do is get the domestic currency. As a smart traveler, you likely hit up the travel exchange in the airport/train station or find a bank recommended by the guidebook. Backup options include the random ATM or any bank you can find that will let you exchange one currency for another.
Two travel mates of mine spent a day last week at the famous Silk Market of Beijing. Running low on cash, one of them hit the closest ATM, which happened to be in the subway station. She withdrew a fair amount of money, planning on being in China for another 25 days, and thought nothing of it. Two things to note before I continue: 1) The bank notes are in 100 Yuan bills (just shy of $15 U.S.) and 2) the subways are secure locations with a lot of security and even do bag checks.
The first indication of a problem happened that later night when she tried to pay for our cab. He wouldn’t accept any of her bills and we got away with what small change we had on us. A couple hours later at Beijing’s only speakeasy, she tried to use another of her bills and that’s when the server told us that it was counterfeit.
We got a brief lesson on how to tell the real bills from the fake ones and quickly realized that the rest of her money was counterfeit as well. Because she’d taken out much more than she had on her, we decided to call it a night and head back to the hostel so she could check the rest of her money, which, much to her relief, turned out to be real. 500 Yuan (about $74 U.S.) of 3000 in total was fake. Keep in mind, this was all from a bank’s ATM in a secure location.
HOW TO TELL REAL FROM FAKE:

One counterfeit 100 Yuan bill (top) and one real 100 Yuan bill (bottom) shows how difficult it is to tell the real from the fake.
For Chinese Yuan, there are a number of ways to tell the phony money from genuine bills.
1) The first, and most common method, is by feeling “Mao’s Collar”. The print on the bill around the collar on Mao’s neck has a very specific texture to it and feels very rough. The fake bills feel very smooth.
2) The best method is to purchase a small, purple light which is very common and used for viewing a box that only shows up under the light (see pictures). The box will show the value of that bill under the light. The bogus bills do not have the box.
3) With the Mao side facing you, in the upper right corner there is an oval shape just under the value of the bill. If you hold that up to the light at a sharp angle, you should see a number equal to the value of the bill.

Purchase a cheap light for about 10 yuan or less and use it to tell the difference between real and counterfeit currency in China
Those are the three main ways to check for counterfeit bills. The counterfeits even had watermarks and holograms so be careful! To be safe, the best advice is to change money only at legitimate sources and only use ATMs from the biggest banks. Usually your guidebook will recommend where to change money. I went out the next day and purchased one of those lights. They’re inexpensive, easy to use and a reliable way of making sure you don’t run into problems.
How does the story end? My friend eventually met with five representatives from the bank who came to the hostel. She explained where she got the money and how she found out it was counterfeit. They brought her gifts and apologies but did not give her authentic money for her fakes. Unfortunately, it was just under the amount required to claim it on her travel insurance. In the end, she paid about seventy-five U.S. dollars for a souvenir book, some moon cakes and a story to tell.
Have any experience with counterfeit currency while on the road? What happened to you?

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