Ken Ryan knows firsthand just what impact accepting a counterfeit bill has on a small business.
As the franchise owner of six Great Canadian Dollar Stores in Greater Victoria, Ryan has dealt with the realities that come with being scammed.
“It sure hits businesses hard. When you accept a fake 50 and they buy $30 worth of merchandise, you lose that fake $50 bill, you lose the $20 you gave back in change, and you lose $30 worth of merchandise,” he said.
Having been burned by counterfeit money in the past is the reason his stores have a ‘No $100 bills’ policy. Before accepting a $50 banknote, two employees have to verify its authenticity.
“We have deterred – I’ll bet – a couple hundred dollars where the staff aren’t sure if it’s real,” he said.
That’s why the businessman is looking forward to November, when Canada’s new banknotes begin to get rolled out. Starting with the new polymer $100 bills, the Bank of Canada will aim to replace the 219 million bills currently in circulation with what’s being described as a “state of the art” bill.
“Every seven to eight years we have to come out with new banknotes to stay ahead of counterfeiting threats,” said Isabelle Jacques, senior analyst in the currency department at the Bank of Canada. “Counterfeiting levels are at historical lows in Canada, but the idea is that low counterfeit rates today don’t mean, low rates tomorrow – so we’re staying ahead of counterfeiters.”
The polymer notes are much more durable than the currently used paper money. Though they cost nearly twice as much to print (19 cents each), they are expected to last 2.5 times longer than current bills.
Several security features are also integrated into the bills to help minimize the threat of being forged. Among those features is a large transparent window directly on the bill, raised ink, transparent text, and hidden numbers.
“People should be able to verify (the authenticity of) the banknote with the naked eye,” Jacques said. All the denominations will have the same security features.
The $100 bills will be rolled out first, followed by $50s in March 2012, and $5s, $10s and $20s by the end of 2013. Jacques says big bills come first because there are fewer high-denomination bills in circulation, so the transition will be smoother.
“They’ll feel significantly different. It’s a very smooth, durable material. It’s virtually impossible to tear them,” she said. “And it will survive in the washing machine.”
Det. Const. Janet Milligan, with the financial crimes division at Saanich police, says the new bills are a “huge positive” in the combat against counterfeit money.
“It’s going to be almost impossible for it to be counterfeited. Not only is it made of polymer, with the new security features, it’s going to be a long time before we see attempts at these being counterfeited,” she said.
But Canada’s older currency, the bird series of the ’90s especially, is legal tender and because it has few security features, it remains problematic for businesses.
Banks are responsible for removing old banknotes from circulation, as will be the case come November, and are expected to exchange any old bills with new ones.
Counterfeiting affects smaller denominations, which are sometimes favoured by crooks trying to take advantage of stores that post signs saying they won’t take large bills.
“That turns those businesses into targets because the counterfeiters think, ‘Ok, maybe they’re not checking the (validity of) smaller denominations,'” she said. “But the security features are all the same on all the bills.”
According to statistics from the Bank of Canada, counterfeiting peaked in 2004 when 553,000 fake bills were passed, resulting in a $13 million loss to the economy. Last year, 54,000 were passed resulting in a $2.6 million loss.
The Bank of Canada is currently conducting an education campaign with law enforcement and businesses, to prepare the public for the introduction of the new bills, and explain the new security features.
Two of Ryan’s stores have already had a presentation. “It’s great that someone is coming out prior to the new bills being introduced and showing us … what to look for,” he said.
Come November, his dollar stores will tear down the “No $100 bills” signs and begin accepting the new banknotes.
“I’m looking forward to the rollout,” Ryan said. “I wish all the bills were happening sooner, but I’m glad they’re doing something about the counterfeits.”