Coin Collecting - Coin Grades
Many coin collectors get their start in some unexpected way, some by inheriting a small set of coins from a relative. Another may be looking over the miscellaneous items at an estate sale or just hit the topic on the Ebay auction site. The first
question asked is invariably 'How much are these worth?' The first step in answering that question is to grade the coins.
But despite the many innovations in grading coins over the last few
decades, the process is still as much art as it is science. Experienced
dealers and collectors will issue a judgment based on observations made
and knowledge gained over many years. Even then, skilled practitioners
can arrive at widely varying conclusions.
The most basic answer is: a coin - like any other item traded on a free market - is worth what someone is
willing to pay. That said, grading plays a substantial part in assessing the value of the coin.
Traditional grades run from Poor through Fair, Almost Good, Good, Very
Good, Fine, Very Fine, Extra Fine, Almost Uncirculated, Uncirculated
and Brilliant. Placing a coin in any one of the categories is always a
judgment call, but there are several factors widely employed.
The coin is examined by eye and under magnification to look for its
overall condition. All but a very few uncirculated coins will have
various defects, the most common of which are called 'bag dents'.
Almost all coins, even many so-called uncirculated coins are placed
together in a bag. Banging against one another produces small nicks,
dents and other damage.
Circulated coins typically get handled many thousands of times even
within only a few years. As they get more and more worn, the surface
and edges degrade through the various rankings.
Naturally, the high points on coins tend of receive more wear, and sooner, than
the rest of the surface. Letters and numbers are the chief features
that suffer abuse but devices (images) suffer, too. As they become
harder to detect, less in 'mint condition', the grade of the
coin gradually lowers.
For an Indian Head Cent, for example, it's important to be able to make
out the letters spelling out 'liberty' on the headband of the
coin's figure. For a Buffalo Nickel, key to a high grade is having a
distinct and well-formed horn and tail.
More contemporary grading systems have much finer grades. Beginning
with the Sheldon system - which established numbers of 1 to 70 - and
since there have been created increasingly sophisticated and detailed
In 1986, PCGS (Professional Coin Grading Service) adapted and extended
the system to create combinations of letter and number to designate
grade. Thus, you may see: PO-1, AG-3, VF-25, MS-60 (MS = Mint State)
and similar grades. Their system is widely used today.
Grading isn't the only factor that determines the worth or price of a
collectible coin, but it plays a large role. Rarity is important, as
with any collectible - but much less so than is commonly thought. Age
is a factor, but a common 1921 Morgan Dollar in poor condition may not
even be worth a dollar.
To determine the collectible value of your coins, try to make a self-assessment...that's just for fun and for learning. Then, get at least two expert opinions. On the subject of the value of coins, always remember, a coin is ultimately only worth whatever someone is willing to pay for it. Still, even viewing coins on that seemingly cold-hearted basis, if it came from Grandmother's collection lovingly gathered over decades, it may be priceless.