How can vending machines tell the diffrence between bills?

Question

i mean its the same paper, i can understand coins because they have diffrent sizes but i dont know how they tell the diffrences between 1,2,5,10,ect. bills

Answer 1

It is called Optical Character Reading (OCR).  The bill is scanned by the OCR and the resulting data points are compared with stored data for each bill denomination and a decision is made as to the validity of the bill.  It kicks out the bill if it is too worn etc. and cannot make a good decision.