New collector (and not a real smart one) would like to know.

Amherstcop

Having come from a coin collecting background, I have always had an interest in paper money. When all we had were raw coins to buy, most collectors learned the hard way by getting burned buying cleaned/altered/improved coins.
I steered away from paper money collecting years ago when I learned that paper money was being improved/cleaned by washing, steaming and ironing (presumably to remove folds, wrinkles stains etc.). I've been buying graded currencies to avoid this pitfall, but, I really have not seen this issue addressed in the collecting community. Is this an issue when collecting paper money? Are there a lot of "raw" notes that have been altered to "improve" them and passed along? Inquiring minds would like to know...please comment.

tomtomtomtom

Welcome! You are smart buying graded currency. Just like coins, the internet is full of people selling doctored material. The grading system (PMG and PCGS) has basically taken much of the devious sellers game away from them. The grading companies will assign an EPQ or PPQ to their grade to indicate original paper (not pressed washed etc). If there is a major fault, the assign a "net" grade. Once you get comfortable understanding how currency is graded and have seen many notes in person, you might try to purchase non graded notes....but be very careful. Most buyers will use an LED flashlight to cast a shadow down the length of the bill. This many times brings out a hidden fold or "shine" of a pressed note. I'm sure that Steve will post pics of what I just mentioned...he's real good at it. After being in business for over 20 years, most notes that have value have been certified. A red light goes off in my mind when a better note has not been graded. They are usually hiding something. Someone will probably pick me up on this statement. Happy hunting!

Steve_in_Tampa

Solid advice @tomtomtomtom. It’s the exact advice I was given when I got started.
Nothing has helped me evaluate paper money more than my introduction to “side lighting”. Folds are sometimes hard to spot on scanned notes and side lighting is the game changer. The example below looks wonderful when scanned.

Side lighting reveals its true identity.

You can even use it to expose embossing.

Serial_no_8

Both @tomtomtomtom & @Steve_in_Tampa offer sage advice (buy TPG "Q," use side lighting, etc). But even TPG certified notes can be misleading (be sure to avoid notes with bright high contrast) "buy the note" not the holder. Photos are often better than scans (but most online sales are scans). Remember to judge the note's eye appeal (like coins). Sadly, it is absolutely "buyer beware" as you pointed out for coin collectors too. I would actually argue that you're pretty wise to be posting this question since the majority of newbies jump both feet in & throw caution to the wind. (I know I did as I started collecting when I was a kid, well before TPG & trusted everybody until burned a few times).

Unfortunately, there was a custom of collector & naive parties cleaning & pressing (ironing/placing note in books) to improve appearances that went on for decades. I think it happened in most countries as just about every forum I've have visited- has had discussions/posts on this topic (the old custom to shine coins/wash & press notes). I bought a few until a dealer pointed out some of the telltale signs & it really does take a bit of time to get the hang of assessing a note's condition (grade).

For me, I'm wary of notes that are slightly soiled with no visible folds (pressed), diminished ink on the imprint or lack of vibrant colours (flat-dull): but as @tomtomtomtom suggested, you've really got to inspect these notes in person to see a note's embossing/textures. So, when it comes to buying notes online, I either stick to either "Q" or buy from high traffic sellers with top ratings (no negative feedback) and always avoid AU & just pick up "Original UNC" exclusively.

I suppose if there is any silver lining its that there's still plenty of collectors who buy non "EPQ" which is a "no no" if you want your note to be more liquid (sellable down the road). What I mean is that there can be opportunities if you know which older series lack "EPQ" on the population reports (or will be tough or scarce) & pick one (or 2) of these types up.

Seldon

@Steve_in_Tampa
Top notch tips there, and superb illustration. Good light will always show up a banknote's flaws. If you don't have a sidelight, natural daylight is a good substitute.