A slug is a counterfeit coin that is used to make illegal purchases from a coin-operated device, such as a vending machine, payphone, parking meter, transit farebox, copy machine, coin laundry, gaming machine, or arcade game. By resembling various features of a genuine coin, including the weight, size, and shape, a slug is designed to trick the machine into accepting it as a real coin.
Losses caused to vendors by slug usage may be the result of the loss of sales, the absence of revenue following the distribution of merchandise that was obtained at the vendor's expense, or the loss of cash that is distributed by the machine for overpayment with slugs. Honest customers may also suffer losses when change returned for overpayment is in the form of a slug rather than a genuine coin.
Though slug usage is illegal in the United States and elsewhere, prosecution for slug usage is rare due to the low value of the theft and the difficulty in identifying the offender. Offenders in casinos are most likely to be prosecuted, as casinos have high levels of video surveillance and other security measures, and tend to be more proactive in enforcement.
Use of other currencies
In some cases, a slug can be a genuine coin used in another country, with or without knowledge of the user. One example was the interchangeable use of Australian and New Zealand 5c, 10c and 20c pieces in both countries, from 1967 until 2006 (when New Zealand coins were redesigned). These coins were of the same material and size with near identical obverses, so could circulate outside their home country for some time, although the New Zealand coins were worth about 20% less, potentially resulting in a small gain (to those passing them) in Australia and a similar loss in New Zealand.
The Canadian quarter was also accepted by at least some US vending machines interchangeably with the US quarter until at least 2001. The usefulness of this to offenders varied greatly over time; during the 1970s and 1980s, the Canadian and US quarters were very similar in value.
The 10 Syrian pound coin is often used as a slug in Norway, as the shape and weight of this coin strongly resembles the 20 Norwegian krone coin. While not easy to find in Norway, the Syrian coins are still used in automated machines there with such frequency that Posten Norge, the Norwegian postal service, decided to close many of their coins-to-cash machines on February 18, 2006, with plans to develop a system able to differentiate between the two coins. In the summer of 2005, a Norwegian man was sentenced to 30 days, suspended, for having used Syrian coins in arcade machines in the municipality of Bærum.
In the UK, during the late 1990s some coin-operated slot machines would accept two 1-schilling coins glued together as if they were a £1 coin. The two original coins had a net value of under 10p at the current exchange rate. Coin detectors were soon reprogrammed to detect and reject the Austrian Schilling. Not long thereafter it was possible to buy on the Internet a bag of 100 washers for under £20 that had been deliberately made to fool the machines into accepting them as £1 coins. Coin detectors were again reprogrammed to reject those slugs as well.
The Irish pound coin in use from 1990 to 2002 was the same size as the old pre-decimal penny, so vending machines had to be modified to differentiate them. Many machines simply had the pound slot disabled with a riveted plate.
Many coin-operated machines in Germany would accept the 1992, 1993 and 1995 stampings of the cupronickel Estonian 1 kroon coin as a German 1 mark coin. This was profitable for users of the Estonian coins as the kroon was pegged to the mark at a fixed rate of 8:1. All cupronickel 1 kroon coins were demonetized in May 1998 and the replacement aluminium-bronze Estonian 1 kroon coin was not interchangeable with the German mark in coin-operated machines.
The use of 100 South Korean won coins for the slug of 100 Japanese yen coins and cupronickel 20 sen (RM 0.20) pieces still commonly occurs, contributing to the conflict between Japanese and South Korean citizens. Similarly, until 2000, the South Korean 500 won coin could be modified to match the weight of the original 500 yen coin which was otherwise identical in diameter and composition, and thereby used to fool weight-sensitive vending machines.
From the fall of the Soviet Union to the monetary reform in 1998, the Russian Federation often issued a commemorative one-ruble coin that was identical in size and weight to a 5 Swiss franc coin. For this reason, there have been several instances of these (worthless) ruble coins being used on a large scale to defraud automated vending machines in Switzerland.
In the US, Connecticut Turnpike tokens had a value of 17.5 cents in the early 1980s, but due to having a similar design as New York City subway tokens worth 75 cents it became common for commuters to use the Turnpike tokens on the subway. The matter went unresolved for three years; users were not prosecuted, but when Connecticut discontinued tolls on the Turnpike, they agreed to redeem the roughly two million tokens from the MTA at face value.
In 1988, Thailand started minting a bimetallic ten baht coin that is quite similar to the 2 Euro coin (first issue in 2002) in weight, size and appearance. Because it is worth substantially less, it has been used to fool cashiers and automated vending machines since the very first days of the 2 Euro coin circulation.
In the United Arab Emirates on August 2006, it became publicly known that the Philippines' ₱1 coin has the same size as the 1 United Arab Emirates dirham coin. With one dirham having a value nearly 14 times that of one Philippine peso, this has led to vending machine fraud in the United Arab Emirates. Similar frauds have also occurred in the US, as the 1-peso coin (worth about two U.S. cents) is roughly the same size as the quarter. Newer digital parking meters are not affected by the fraud, though most vending machines will accept them as quarters.
Slugs are usually made from metals differing from those of real coins. While genuine US coinage is made from various alloys of copper, nickel, and zinc, Canadian coins are made mostly from steel with some copper and nickel, and euro coins are made from steel, nickel, and brass, slugs are frequently made from differing metals and alloys that are cheaper to obtain and mold, such as aluminum, tin, and lead.
Slugs may or may not have the face details of real coins. Some slugs that are made to match the face details may not be immediately recognizable as such to handlers, and may enter circulation.
Older, cheaper, and other low-tech machines that have fewer security measures are more likely to be defrauded by slug users. As an example, the fully mechanical mechanisms used in the traditional type of small vending machines that distribute candy or toys, and that can still often be found today at the entrances and/or exits of grocery stores and other retailers, can be fooled by cardboard coins. Many newer machines, especially those found in casinos, have additional detection that can identify more details of coins and detect those that do not resemble real coins.
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