Does Banknote Quality Affect Counterfeit Detection? Experimental Evidence from Germany and the Netherlands

Abstract

Reproduction permitted only if source is stated.ISBN 978-3-95729-237-7 (Printversion) Non-technical summary Research QuestionWe investigate whether counterfeit banknotes are better detected by consumers and cashiers if the quality of the banknotes in circulation is high. For this purpose, a field study was conducted amongst 250 consumers and 261 retail cashiers in the Netherlands and Germany. Participants received a set of 200 banknotes with either a high or a low average soil level, each containing 20 counterfeit notes, which they were asked to detect. ContributionCounterfeit prevention is a major task for central banks, which often maintain that it is easier for the public to detect counterfeits if the quality of the banknotes in circulation is high. We are the first to provide evidence for the link between the quality of banknotes and counterfeit detection with respect to euro banknotes. In addition, we refine the methodology of the few existing studies on counterfeit detection by investigating detection rates and the incidence of false alarms simultaneously. Results and Policy RecommendationsConsumers detect 79% of the counterfeits and cashiers detect 88%. Cashiers' detection rate is 4.4 percentage points higher when the set is clean, while banknote quality is insignificant for consumers. The effect of cleanliness on detection rates is strongest at the beginning of the test when participants are inexperienced in the task.At the same time, more genuine banknotes are erroneously declared as counterfeit in the clean sets. When determining the quality of the banknotes in circulation, there appears to be a trade-off for central banks between ensuring a high counterfeit detection rate and raising too much suspicion among the public with regard to unusual, but genuine banknotes. Both the failure to detect counterfeits in circulation and doubts about the authenticity of genuine banknotes can cause costs for the public and potentially undermine trust in the currency.In addition, our results show that participants' performance improves considerably during the test and that elderly people perform significantly more poorly in the task. These findings suggest that central banks should continue their efforts to inform the general public and cashiers about banknote security features, preferably using counterfeits seized from circulation. It might be a worthwhile strategy to target their communication campaigns specifically at the elderly. Nichttechnische Zusammenfassung AbstractCounterfeit prevention is a major task for central banks, as it helps to maintain public confidence in the currency. It is often maintained that a high quality of the banknotes in circulation helps the public detect counterfeits. However, there has not been any scientific evidence in support of this assertion so far. The present study is a first attempt to fill this research gap.To investigate whether banknote quality affects counterfeit detection, De Nederlandsche Bank (DNB) and the Deutsche Bundesbank (DBB) conducted a field study in 2014 and 20...

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“…The average individual d ’ score (a conventionally used measure of counterfeit sensitivity, see Methods ) was 1.79 (s.d. = 1.28), a value comparable to that reported in previous studies 26,27 . Neither cash handling experience nor sex had a significant effect of individual d’ scores (tested with independent samples t-test, 2-tailed; both t ’s < 1, both p ’s > 0.42).…”

فلسفة تصمیم هویة الأوراق النقدیة المصریة

“…Some of the symbols serve as facets which foster an understanding of the spirituality synonymous with Egyptians. For instance, the nation"s residence associate the Eye of Horus with various provisions such as royal power, adequate protection coupled with healing and eventually paving the way for exceptional health [27]. Other images such as djed pillar act as symbols of the strength as well as the stability affiliated with the culture practiced by ancient Egyptians.…”