Introduction

A coin is most often identified by its date of issue, its denomination, and the mint that manufactured it. For example a 1910-S Lincoln cent was manufactured in San Francisco in 1910. Each coin has a value that can be approximated by buyers, sellers, and owners of the coin. There can be a wide range of values based on the opinions of these interested parties. Your ability to accurately approximate the value of coins will pay dividends when engaging in buying and selling transactions.

Valuation Overview

Collectible coins have a “numismatic” value which is based on “scarcity”, “condition”, and other factors including historical importance of the coin.

Scarcity

The scarcity of a coin is determined by how many are available in the open market. This number can be approximated by the number minted minus the ones that are no longer available. One famous example of US coins becoming unavailable occurred in 1918 when over 250 million Morgan dollars were melted and made into silver bars. The more typical cause of lost coins is normal attrition over the years.

The mints that manufacture the coins keep a record of approximately how many were made of each issue, referred to as the “mintage”. For example, the mintage for the 1909-S Lincoln Cent is 6,045,000. The larger the mintage the more available (“common”) the coin is likely to be, and the smaller the mintage the less available (“scarce”) the coin is likely to be. Scarce coins are generally more valuable than common coins.

Condition

Three factors are generally adequate to describe the condition of a coin. The first factor is how well the coin was manufactured (“struck”). The second is whether the coin has been damaged. The third is an estimate of how much wear it has. The “Sheldon Scale” was developed by Dr. William Sheldon in 1949 for use in quantifying the condition of a coin. This scale assigns values from 1 to 70 to characteristics of a coin as it gradually transitions from brand new to completely worn out.

Strike

The strike of a coin is mostly determined by how new the “dies” are at the time of manufacture. The dies are hard metallic pieces that “strike” the coin on both sides at once. When the dies are new most or all of the detail in the dies can be transferred to the coin. As the dies wear during use the detail tends to decrease.

Damage

The coin can be damaged during the manufacturing process or after it enters the marketplace. One primary cause of damage is exposure to cleaning substances. Cleaning coins should not be attempted by non-professionals as the result will most often decrease the value of the coin. Other damage can be caused by environmental conditions like exposure to moisture during storage. Coins can also be scratched, gouged, holed, or otherwise mishandled, resulting in a decrease in their value.

Wear

The amount of wear on the coin can be estimated by examining the details visible on the coin’s surface. The highest parts of the coin wear first and the wear can continue until the coin is nearly or completely flat with little or no detail visible.

Estimating the Grade of a Coin

The 70 point grading scale assigns a value of 1 to a coin with very little recognizable detail. Grades 2 through 58 describe coins with less and less wear as the number increases. Grades from 60 to 70 describe coins that have no wear. A grade of 70 describes a coin that has all or nearly all of the detail for its design with no marks or damage.

Accurate grading requires practice and experience. There are resources available on the internet to allow a beginner to make a reasonable estimate though, and it’s free to try your hand at it. One of these resources is PCGS Photograde, available at https://pcgs.com/photograde.

When there is damage involved the price should be adjusted downward. The more severe the damage the larger the grade should be discounted. An indentation on the rim of the coin is not as severe as corrosion or pitting into the surface or if there is a gouge or a hole in the coin. One approach is to discount the grade of the coin by one full grade for severe damage. For example, if the coin has a grade of Very Fine 20 based on its details but has severe damage the grade should be discounted to Fine 12.

Estimating the Value of a Coin

When you have completed your estimate of the grade of a coin, e.g. Very Fine 20 you can determine a price estimate by using one of many resources available for this purpose. Use recent data to get the most accurate estimate. There are many sources for pricing data on the internet, and most of these sources update their data frequently. Two of the best sources are https://www.ngccoin.com/price-guide/united-states/ and https://www.pcgs.com/prices. These pricing guides are organized with the issue of the coin in rows and the grade of the coin in columns. There is a current price estimate for each issue and each grade in the table.

Once you have determined the value of your coin your estimate is complete. It’s a good idea, especially for beginners, to compare notes with a friend or associate in the hobby to see what you can learn.

Perspective

After having discussed how to estimate the value of a coin a little perspective is in order. The base value and the numismatic value of coins are subject to the economic laws of supply and demand and therefore vary according to market forces. Numismatic value can vary with the overall economy (more discretionary spending in good times) and with the popularity of the hobby in general (more collectors means more demand). So your valuation is not static; it will vary over time. Of course in the best case the value will increase!