Counterfeit cash and small business owners

All small business owners know that cash is king, but what to do when that cash is fake? Here’s how to protect yourself and your business from counterfeit currency.

Think back a few years. Remember when we were all excited about the new polymer notes that were being introduced? We marvelled at how you couldn't tear them; they were transparent; the holograms were so cool!  All of those changes were not merely aesthetic, they also provided some very specific security features that were designed to make Canadian bank notes more challenging to duplicate. 

 

The Bank of Canada takes safeguarding Canada’s currency seriously and is always looking for new and innovative security features to protect us from counterfeits. Fake money doesn't just affect the poor person (or business) who gets stuck with it on the receiving end – it also undermines public confidence in our currency, which is necessary for maintaining a vibrant economy.

 

About 40 per cent of all retail transactions are still settled in cash, and most counterfeit bills enter circulation at the point of sale. The best way small businesses can protect themselves from counterfeit loss is to reject phony notes in the first place. If they do come into possession of a fake bill, it won't be replaced by the Bank of Canada, and the business will have to bear the loss itself. Therefore, it makes good sense for business leaders to familiarize not only themselves, but also their staff, so everybody at that workplace can discern real from fake notes before the bogus bills get into their tills.

 

To help with this, the Bank of Canada offers free courses and webinars to train people on how to check bills to verify their authenticity. It also publishes a number of excellent manuals, quizzes, and even one-page summaries that can be easily displayed next to a till for quick reference. All of these resources are free and are an excellent way for businesses to reduce their risk. Find more information on the Bank of Canada site.

How to deal with suspicious notes

Assess the situation and ensure that you are in a safe environment.  If you feel that you might be threatened if you refused the bill, just accept it and call the police once the transaction is completed. Otherwise:

  1. Politely refuse to accept the note, return it to the customer and explain that you think it might be counterfeit. Be courteous – it's very likely that they hadn’t realized it was fake.
  2. Ask the customer for a different note (or form of payment), and check that note as well.
  3. Advise the customer to take the note to a local police station. Officers there will verify its authenticity, and if it's real, the customer will get it back.
  4. Follow up with the police yourself to let them know that someone tried to pass a counterfeit note to you.

Keep the conversation going

Have you learned how to identify counterfeit bills yourself?  Post a comment below.

Disclaimer

The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.

About the Author

Laura Britton

Laura Britton, CPA is the principal accountant at LG Britton, CPA Professional Corporation.