How much is this coin worth?
When I am asked this question by a customer I have some standard short responses depending on whether he has the coin with him, and on how much experience I perceive him to have with coins. The real answer to that question is not that simple, and is the topic of this article. This article is limited in scope to US coins, but has some relevance to international and ancient coins as well.
The value of a collectible coin is primarily based on 3 factors;
- Rarity, or scarcity
- Condition, most often graded on the 70 point Sheldon scale
- Damage, for example holing, scratching, or cleaning
Silver and gold coins that aren’t collectible have bullion value based on precious metal content and weight.
When a customer brings a coin to a dealer at a reputable coin shop or a show they will be offered a price around or below wholesale. Most dealers use the ‘greysheet’, short for ‘the Coin Dealer Newsletter’ as a starting point for a price offer. The ‘greysheet’ is published weekly, so it reflects current market value. It is also available on-line for a subscription fee at www.greysheet.com.
Another method is to offer a percentage of the retail price. Current retail prices are readily available for free at web sites like http://www.pcgs.com/prices/default.aspx, and http://www.ngccoin.com/poplookup/NGCCoinPriceGuide.aspx. Coin Values has retail prices with extra features, like price history available at http://www.coinvaluesonline.com. The Coin Values site requires a paid membership. Most on-line price guides are available for smart phones as well.
Price guides are typically formatted as tables, with one table for each type of coin (e.g. one table for Lincoln Cents). The table will have a row for each issue and mint mark or variety (e.g. 1909-S), and columns for the coin’s condition using the Sheldon scale (e.g. G-4). The price for a coin is found by finding the row for the issue, then going across the columns to the condition that the seller feels the coin is in. It is relatively easy to determine the rarity of the coin as the prices for these coins are higher than others in the table. But here’s the rub for most sellers that are not immersed in the world of coins; how do they determine the condition of the coin?
There are many books that describe the process of determining the condition (grading) a coin, but even the best of these require a large investment of time to grasp, and accurate grading requires years of experience. One relatively new resource that allows the seller to determine a good guess at the grade of a coin is at http://www.pcgs.com/photograde/. This web site shows images of each type of US coin at selected grades on the Sheldon scale. For example, if the user is interested in determining the condition of his Washington Quarter, he can select Quarters from the main page, then Washington Quarters from the next page. This brings up an image of a Washington quarter in specific grades from the Sheldon scale (e.g. MS63). An examination of these images allows the user to see how the appearance of the coin changes from uncirculated grades to very worn, and most importantly allows the user to determine an approximate numeric grade. Once the grade has been determined it is easy to find the column in the price guide that has the price value for the coin.
Damaged coins are discounted from their full value by factors depending on the type and amount of damage. A light cleaning might bring a discount of 20% to 40% while heavy surface damage might bring a discount of 50% or more. This pricing is more of an art than a science.
When a potential seller is interested in maximizing the price, he can opt to sell the coin in the retail market. The most easily accessible retail markets are on the Internet, and include venues like eBay (www.ebay.com), Amazon (www.amazon.com), or Etsy (www.etsy.com). Etsy is not as well established as ebay or amazon but charges significantly lower fees to sell coins. The process of selling on these retail venues obviously includes some labor, including photographing the coin and becoming familiar with the specific site’s selling process. An additional alternative is to consign the coin for sale through a vendor that sells it on-line for a fee, typically a percentage of the price realized for the coin.
Whether the seller decides to sell at wholesale, at retail, or on consignment, some due diligence should be exercised. The seller should determine an approximate retail price for the coin before going to the coin dealer or selling on-line to avoid being underpaid. When a higher priced scarce or rare coin is involved the seller should also take the coin to two or three dealers to get the best price.
So what is that coin worth?