he new peach-colored $20 bills released on Oct. 9, 2003 have been making their way into the U.S. payment system, but the transition has not been as smooth as expected. Many consumers are discovering the bills don't work at many automated payment machines-such as those found in self-service checkout counters at grocery stores-and counterfeit bills have shown up at several retail establishments.

After the U.S. Treasury Department's Bureau of Engraving and Printing's redesign of the $20 bills in 1998, consumers had many problems using the notes in vending machines. Before releasing the bill this time around, the Bureau worked closely with the vending machine and gambling industries, transit authorities-even the U.S. Postal Service-to ensure the bills could be used without problems, the Associated Press reported.

Self-checkout machines are a relatively new technology, and they were overlooked in preparation for the notes' release. Various vending and money changing machine manufacturers are offering software and hardware upgrades (for free or up to $40 per machine) available through the Internet.

The Treasury Dept. frequently redesigns the $20 bill, since it is the most counterfeited of all U.S. notes. The latest version uses color-shifting ink in peach, green and blue tones and embedded plastic security threads; it also displays a watermark image, a new shield and the words, "Twenty USA"; and tiny yellow numeral 20's are printed on the back of the bill around the image of the White House.

Only a few weeks after the new bills were released, counterfeited bills began showing up. In an area south of Boston, the U.S. Secret Service and local police are investigating the appearance of fake new $20 bills at several retailers including a Radio Shack. In Bridgewater, Mass., they've shown up at the lunchroom of a high school and at a McDonald's.

In Missouri, a federal grand jury charged Margretta Saffold of St. Louis of passing phony new $20 bills on Oct. 16, 2003-just a week after the real bills began circulating. It was the government's first indictment related to counterfeiting the new money.