The advice came after netizens reported that counterfeit 1,000-baht banknotes were being used to purchase goods in Udon Thani's Muang and Phen districts.
On Saturday, National Police spokesperson Archayon Kraithong offered an easy way to distinguish between the real notes and the forgeries.
He said people could hold up their 1,000-baht note to the light and check the dashed line that runs from top to bottom. A genuine banknote will show the dashed line printed with "1000 บาท".
This imprint is missing from the fake notes.
Archayon also advised that the dashed line on genuine banknotes could be damaged or mismatched from heavy use.
He added that counterfeiting coins or banknotes is a crime punishable by imprisonment of 10 years to life and a fine of 20,000-40,000 baht.
It is also a crime to use fake banknotes, even if you do not realise they are counterfeit.
Those caught using fake banknotes without knowing they are counterfeit face up to 10 years in prison, a maximum 20,000 baht fine or both.
Anyone who intentionally uses fake banknotes faces between one and 15 years in prison and a fine of 2,000-30,000 baht.
Archayon said Prime Minister Prayut Chan-o-cha has ordered police to crack down on counterfeiters as fake banknotes cause trouble to people and the country's economy.
People with information about fake banknotes or counterfeiting activity can contact 24-hour police hotlines at 191 or 1599, he added.