We are so used to vending machines that we no longer see them as mystery machines. You insert the money and it gives you what you want. Sounds easy right? But here is the tricky question: how do vending machines process the bills we use?
It is easy to understand why coins aren’t such a challenge when they are processed by automated systems: they come in different sizes, shapes and weights. But what happens with the bills? They became a problem for the vending industry when the value of the products that they were selling increased and paper money were needed.
MEI or “Mars Electronics International” is one of the first and still-leading manufacturers of this type of technology. It originated in the 1970s within Mars Inc. (the same company that produces M&Ms, Skittles and Twix Bars). The oldest version of these machines used to identify the specific characteristics of every bill very easily, thanks to the magnetic ink that was used to mark them. The machines had a magnetic head that could “read” the ink. But, in time, this magnetic “signature” on a bill could fade, making it hard for the vending machines to identify the bill. This is why, sometimes, they spat back your dollar bill.
But things have changed a lot since the 80s! These days, many vending machines have photocells or cameras that can recognized the visual markings on the bills. Lights play an important role too: they illuminate the bill and allow the camera to detect the, sometimes, very subtle markings. This is a very convenient technology because manufacturers can keep pace with the Treasury’s new bill designs. And, of course, they are very sensitive to counterfeits (so, don’t try anything!).
Depending on the area where these machines are located, different technologies are used. For example, the vending machines in Las Vegas are more expensive than the one you might find in your neighbourhood.
So, next time you insert a dollar bill into a vending machine you’ll know how it works! 
