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Technology Focus

Call Security! Anti-Counterfeit Protection Opens New Opportunities

by Staff

May-June, 1995
The increase in desktop publishing, laser printing, and color copying technology has made counterfeiting as easy as a 15 minute trip to your local computer store. For as little as $3,000, a person can be set up to counterfeit everything from payroll checks and rebate coupons to gift certificates and event tickets. Sophisticated illustration and photo manipulation software can manipulate a scanned image in literally minutes to create an almost exact duplicate of the original.

Although the problem of counterfeiting is most often attributed to currencies, problems with many other paper documents which have monetary value and are much easier to duplicate are growing steadily.

Check fraud has become an extremely common form of counterfeiting. Experts estimate that in recent years commercial banks have lost as much as $10 billion annually to check fraud alone. Payroll checks, because they are computer generated and readily negotiable, are the most common target for counterfeiters. All a counterfeiter needs is a copy of a company check and a signature of the person who signs the check. Counterfeiters may offer workers $50.00 to $100.00 to scan their check. Once they have successfully created the check they will print several copies and send their counterfeiters out to cash them. After cashing the checks (virtually all at the same time at different bank locations), the counterfeiter disappears before the banks or company realize what has happened.

Another form of counterfeiting on the increase is gift certificate fraud. Because this is "small potatoes" compared to currency or check counterfeiting, it has not been a serious problem for department stores and other retail outlets until recently. Again, the increase in computer technology and the continued decreased costs in computer software and hardware has enabled the "small guy" to become a player in the counterfeiting arena. A midwest mall recently sold gift certificates for a Mother's Day promotion that could be redeemed in any of the stores in the mall. Soon after the promotion, one of the store managers congratulated the mall marketing manager for the successful promotion. His store alone had redeemed more than $2,500 worth of gift certificates. The marketing manager knew right away that there was something wrong. They had only sold about $3,000 worth of certificates. After a quick analysis, the mall discovered that more than $32,000 of counterfeit certificates had been redeemed. Besides sequential numbering, no type of security device was present on the certificates.

Checks and gift certificates are excellent examples of how documents with redeemable value (besides currency) are being counterfeited. Other items such as rebate coupons, transit passes, and event tickets have also seen their share of counterfeiting. It is a growing problem that is not likely to disappear any time soon.

What can be done?
In the examples above, the documents can be completely duplicated with a personal computer and color printing capabilities. One hint hot stamping foil or holographic foil creates a nuisance that most likely will discourage the counterfeiter, forcing him to move on to easier prey.

Holography News reported in its May 1994 issue that Ralston-Purina has used a hologram to prevent counterfeiting rebate coupons for its Chex breakfast cereal. This was the first reported North American company to utilize a foil stamped hologram for this purpose. The hologram was hot stamped by Artfoil Americas on their Artfoil Cylinder Foil Stamping press. The hologram was produced by Transfer Print Foils of Brunswick, NJ in a continuous pattern and foil stamped with the name Ralston reversed out of the die. A spokesperson for Ralston's coupon-processing susidiary, American Redemption Systems (ARS), stated that the program was very successful and ARS is convinced that the holgorams are effective in combating the coupon security problem.

Another prominent example of how a hologram has helped with the security of a valuable document can be seen on various collectible sports cards. The Upper Deck Company, an innovator in sports cards, began using a small diamond hologram to deter counterfeiters several years ago. Other companies followed suit, using the foil hologram to authenticate their cards; the foil was readily recognizable by collectors, though difficult for counterfeiters to duplicate.

Not just for the big guys
Although we have been discussing large scale applications for the use of foil and holograms for security, many opportunities exist for foil stampers in their own communities with the protection of items such as local event tickets, parking passes, transit tickets, etc.

A low level security application would be to utilize a holographic foil with a continuous image running through it-like "valid" or "Genuine document". If the pattern is sold marketwide, the security level is minimal, but if the pattern is specifically made for the client with their logo or other information used as the image, the security level increases substantially.

Another form of protection recently becoming more popular is foil stamping the stamped image with a refractive engraving. Fine lines are engraved in the refractive brass engravings to show detail within the foil stamped image. A refractive design is very difficult to duplicate without the original art, creating an excellent anti-counterfeit device. Combining a holographic image with a refractive engraving adds additional document protection.

The highest form of security through the use of foil stamping is a registered holographic image, many times referred to as an Optically Variable Device or OVD. A hologram is a specific type of OVD; others produced on hot stamping foil include the Kinegram®, Pixelgram®, and Movigram®. If the production of the image is secure, the document is virtually impossible to counterfeit. A hot stamped OVD has been used for all types of security applications throughout the world, including currency in countries like Australia and Canada.

Where do I start?
If you have considered offering security foil stamping services, you should keep in mind a few precautions. First, the area where you are conducting the foil stamping must be secure and only certain individuals should be allowed to enter. One way to accomplish this is to foil stamp all security jobs during a night shift when customers, vendors and the majority of your work force are not around. Also, you must account for every sheet you receive from your customer, including scrap and makeready sheets. You need to contact your attorney as well to discuss the liability involved with security foil stamping. An important point to remember is never guarantee verbally or in writing the security of the documents you are hot stamping. A foil stamped hologram is a deterrent to counterfeiting; it is not a guaranteed solution.

Applying a low level security hologram does not have to be expensive. The stamping area can be as small as 3/4" in diameter with a properly designed image. A 1" wide roll may be all that is necessary. Many foil companies are now offering controlled stock security images that can be purchased in small quantities at reasonable prices. Businesses that are involved with selling and producing such items as event tickets, transit passes, and gift certificates are excellent potential users of foil and holograms as enhanced security devices and as esthetic additions to their product. Any printed document of value is a prospect for adding foil or a hologram. InsideFinishing suggests that graphic finishers present this form of security to either commercial printers who are printing these types of products or discuss it directly with the organizations or governemnt offices that manage documents with a redeemable value. The bottom line is technology is only going to increase as time goes on, and a substantial market exists for those who pursue security foil stamping for both large national promotions as well as smaller local applications.

InsideFinishing would like to recognize Peyton Old of Artfoil Americas (609) 983-4554, and Ian Lancaster of Reconnaissance Holographics (publisher of Holographic News) USA - (303) 237-4010 for their contribution to this article.