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Redesigned $5, $10 bills confound vending machines

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WASHINGTON — Without special software, vending machines aren't processing the new $5 and $10 bills.

Of an estimated 6 million food and beverage vending machines in this country that accept $5 and $10 notes, only 1 million have been modified to recognize the bills, said Larry Felix of the Treasury Department's Bureau of Engraving and Printing.

The new bills, bearing portraits of Abraham Lincoln and Alexander Hamilton, were redesigned to thwart high-tech counterfeiters.

Vending machine owners are working to modify their machines to accept the new bills, Felix said Friday. He said the process will likely take some time, but he is confident the changeover will go smoothly.

Brian Allen, spokesman for the National Automatic Merchandising Association, said: "Some of the equipment is very simple to change. Other machines need more major modifications . . . we are working as fast we can."

The government supplied some of the new notes to vending equipment companies late last year to give them time to develop software to recognize them and test it on vending machines.

"One of the things industry asked us to do was to introduce the new $5s and $10s together," thus allowing companies to make modifications for both at the same time and cut costs, Felix said.

Some vending machines take $20 bills, which got a face-lift in 1998, but many more take $5 and $10 notes, Felix said. "That's a large leap — a much bigger job" for the industry, he said.

Felix said only about 10 percent of the new $5 and $10 notes are in circulation. The old bills will continue to be accepted and recirculated until they wear out.

Allen said some vending machine operators were waiting to phase in the changes as the new bills come into wider circulation. "It's an expense and business decision on their part," he said.

The new $5 and $10 bills include a number of new features, but it's the big, and slightly off-center portraits of Lincoln and Hamilton that people will notice first.

In May, the notes joined an oversized Andrew Jackson on the $20 bill, Ulysses S. Grant on the $50 and Benjamin Franklin on the $100 in makeovers designed to trip up counterfeiters.

Other new features of the redesigned $5 and $10 notes include watermarks that are visible when held up to a light; embedded polymer security threads that glow blue on the new $5 bill and orange on the new $10 bill when exposed to an ultraviolet light; and very tiny printing, visible with a magnifying glass.

Over the years, counterfeiters have graduated from offset printing to color copiers, computer scanners, color ink jet printers and publishing-grade software — technologies that are all readily available.

On the Net: Bureau of Engraving and Printing: www.moneyfactory.com