Pens use an iodine solution that can be used to help identify computer-generated counterfeit bills by reacting to starch in wood-based copy paper used by most printers. Detection pens are easy to use and require no training.

A clerk at a cash register simply uses their conterfeit detector pen to put a small mark on the bill. If the bill is counterfeit and the paper is wood-based, the iodine in the pen solution will react with the starch and leave a dark brown or black mark. If the bill is authentic andthe paper is fiber-based, the pen will elave an amber mark. Pen will not detect all counterfeit bills and should be used with other counterfeit detection methods. U.S. patent no 5063163.