Counterfeit $50 and $100 notes are being circulated at supermarkets, fast food outlets and pubs and clubs, NSW police say.
Police said there had been 17 incidences of fake notes being passed to small businesses on NSW Central Coast and in the Hunter Valley since the beginning of the year.
The notes were used for purchases at licensed premises, supermarkets and fast food outlets.
Police are urging businesses to check any $50 and $100 notes they are given as payment.
They say Australia's banknotes have a range of security features, including being printed on plastic and having a clear window.
People should also look for the coat of arms and federation star when the note is held up to the light.
Police have asked that anyone handed a suspicious note promptly contact them and forward any details of the customer involved and, where possible, their vehicle.