Monday, July 02, 2012

Counterfeit "Won" in Place of Yen

Here is the exciting conclusion to our article about why vending machines in Japan have little stickers on them telling you that your old 500 yen coins aren't welcome for use:

This is a 500 won coin that has been altered by a counterfeiter. The divots you see in the face of the coin are from a power drill, available at any home center, or more probably--considering the number of altered coins that were produced in the late 90's--a drill press, standard equipment in a machinist's shop.
Everything about the old 500 yen coin and the 500 won coin are identical except for visual appearance (to a human) and a slight difference in weight. So counterfeiters came up with a simple conclusion: Lighten the won coin, and it'll fool a vending machine. In order to achieve the desired weight, little divots like these were drilled into 500 won coins until their weight matched up perfectly with that of the old 500 yen coin.

Then, the won coin was simply inserted into a vending machine. In the worst case scenario, the counterfeiter bought something out of the vending machine and scooped up the legitimate yen that popped out as change.

But to even greater embarrassment of vending machine manufacturers at the time, many machines had no countermeasures to prevent abuse of their "Return Coin" levers: Thieves could simply pop a 500 won coin into the machine and, without buying a soda, hit the lever: A legitimate 500 yen coin would pop out of the machine as change, and their counterfeit coin would be stored on top of the stack of 500 yen coins inside the machine.

As such incidents increased and the word spread, vending machine owners from around the country started collecting and pooling the altered won coins collected from their machines. Eventually they amassed 40,000 of them. That represents 18 million stolen yen (a bit under $180,000 USD at the contemporaneous exchange rate), and of course accounts for reported coins only.

A hundred and eighty grand is pretty small-time in the world of counterfeiting, yet the problem was obnoxious enough that the government scrambled to release an updated coin. Zinc was added to the new 500 yen coin's alloy, giving it different electrical conductivity, and it was slimmed down, which along with the new alloy reduced weight. (The zinc also gave the present 500 yen coin its distinguishing gold color.)

The new conductivity, though, was the big difference in terms of machine-based verification. An electrical current could be run through the new coin to easily distinguish it from the old coins and altered won. However, it took vending machine manufacturers a few more years to catch up as they built new devices to identify the coins and hurried to ship these out to disgruntled vending machine owners.

And that brings us back to the stickers. For that short period between the new coin's introduction and the release of updated vending machine technology, stickers were placed on extant machines clearly stating, "Sorry, but this vending machine will not accept the new 500 yen coin." Because the lighter, thinner, differently composed new 500 yen coin actually appeared as a fake to all the machines already sitting out on the street.

Finally, when new machines began to be installed, the stickers' messages changed to let consumers know that only the new 500 yen coins would be accepted--as banks simultaneously gathered up old 500 yen coins to phase them out of the currency system.

So next time your 500 yen coin pops out rejected from a vending machine, check its color and its date: You may just have a not too old, but still rapidly disappearing piece of Japanese history in your hand.

Enjoy our articles? Follow us on Facebook and Twitter for updates!

1 comment:

  1. I would have never known this. It took two revisions of the new 500 yen coin to get it right. That's kind of funny. Excellent info article. :)