How Much is a Coin Worth?
Learn How to Determine a Coin's Worth
By Alan Herbert
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The most common question asked by beginning coin collectors is one that can’t be answered: “How much is this coin worth?” “Is my coin worth anything?”
No one can answer such questions. Why not?
This is one question that no one can accurately answer for you. It’s necessary to see the coin to determine its exact value. Certainly gold coins and silver coins have intrinsic value, they have worth at least equal to the weight of gold or silver within them. Still, for most coins, one important bit of advice is this: Let’s assume that you acquire five or six State quarters, or maybe a couple of one dollar coins. Your first question is going to be: “What are these coins worth?” Think about it. If they were really valuable, or really rare coins, they probably wouldn’t have wound up in your pocket, so follow this next rule: “Assume only face value for what a coin is worth until you’ve found out otherwise.” Wishful thinking is not going to increase the value of any coin. It’s tempting, but fruitless.
To answer the question, you need to forget for the moment that coins are made primarily for commerce, used to pay for goods and services. There is a difference between face value and collector value when talking about the worth of a coin. The most important difference is that collector value is not fixed. The simplest explanation is that just like a house or a car, you need to see it in order to determine what the coin is worth, this is especially true for determining how much a gold or silver coin worth.
Wear is a key factor. The more wear, the less the collector value. It’s important enough to merit a 70-point scale of wear. Assigning a number is defined as grading, a term you will hear frequently, and one that is of great importance in determining what a coin is worth. Also important are the number minted, and in some cases the estimated survivors. Sometimes, it even depends on the rarity of a specific grade.
A common request is to provide a price range. That’s also a problem, because for most people a range is meaningless and perhaps unexpectedly creates a serious problem. As an example, a 1903 Barber dime is worth, according to catalogs, $4 in the lowest grade and $1,100 in the highest grade. If I quote that range, which can be found in many coin price guides, to a collector, he will automatically assume that his battered old coin is worth $1,100. That’s human nature.
If a dealer offers anything less, the customer stomps out, convinced the dealer is ripping him off. The coin business is the only one I’m aware of where the majority of customers expect full retail for their coins. A price guide can give you an idea of what a gold coin is worth, but this is just an approximation, the dealer has to have a profit margin to stay in business.
The solution is to learn how to grade your coins yourself, a topic covered in the “Grading Your Coins” chapter of Warman's U.S. Coin Collecting.
Know More About the Coin You are Buying Than the Seller
That applies to grading as much, or even more, than other factors. As you gain experience, the figures in a price guide will have more meaning for you. A vital point here is that there are two kinds of catalogs, with a lot of confusion about them. A price guide is a reference catalog, not an offer to buy or sell. These prices are average retail prices, and they are not set in stone. The coin dealers use the prices as a starting point to which they apply their personal formula, so you may never see a dealer’s price that exactly matches what the price guide determines a coin's worth is.
Every price guide clearly states that it is not a sale catalog and that the publisher does not buy or sell coins. If you are unsure of what a given catalog is, look for an order blank. If you don’t find one, you can be reasonably sure it’s a reference catalog.
A catalog that offers coins for sale or offers to buy coins is a sales catalog and the prices quoted are actual sell or buy prices. Retail catalogs deal in cents, half dollar coins, dollar coins, silver coins, gold coins and everything in between. The text will clearly indicate which type of catalog it is.
One misconception is that just because a coin is listed in a price guide, there is a market for it. The fact is that since anyone can search coins, there is a surplus of low-value coins, far more than any market for them. Coin values are like any other commodity. If there’s a shortage, the price and demand goes up. If there’s a surplus, the demand is met and the price goes down. Rare coins are just like rare commodities in that they command premium prices.
If there’s a library within a reasonable distance, go to it and ask for their reference section. Find a coin price guide and compare your coins to find their general worth. At this point you will see the term “grade” used. The best advice when you see a range of values is to take one of the lowest figures rather than the highest as the likely value of your coin. It is better to be pleasantly surprised by how much your coin is worth than bitterly disappointed.
In 99 out of 100 cases, the price guide is going to confirm your assumption of value. Still, you have the makings of a collection, what with quarters from 50 states and the six extras for the District of Columbia and U.S. Territories. As you leaf through you will find recent dollar coins you may never have seen, as well as half dollar coins and other coins that capture your interest.
Larger bookstores carry price guides, or you can order them on the Internet. Check out the price guides at ShopNumismaster.com. Your local coin dealer also is likely to have copies for sale.
“Walk before you run!” Put your checkbook away, and then keep looking. Establish a budget for your collection, including reference materials to add to your library. Avoid big ticket gold or silver coins until you have lots of experience, as there are many pitfalls. Pick coins that you can afford, as a mistake here could easily sour you on further coin collecting.
One of the major changes in the hobby has been the shift in collector interest. Just about every collector over the age of 50 started by collecting cents. State quarters rank first now, followed by silver coins of various denominations (especially Morgan and Peace silver dollars). Cents are down to third or fourth, but may be coming back up with the Lincoln commemoratives of 2009. Cents are a good place to start and your next step will be to get an album or folder. Filling the holes is a good way to start your collection. By the way, they are not “pennies.” The British have pennies and pence, but we have cents. It says so right on the coin.
This is also a good time to get to know your local coin dealer. He has the folders and other storage materials, can offer sage advice and answer your questions. Learn to shut up when he is waiting on another customer and don’t walk out without buying something. Regular customers usually get better treatment. A dealer with whom you have a good relationship can also be a good source of coin information, veterans have valuable knowledge and experience, and know what is rare, and what, in general, a coin might be worth.
Once you’ve dug under the sofa cushions and a few other typical hiding places, it’s time to expand your horizons. Church collection plates used to be a prime source for coins, but today most donations are notes or checks. If you or your family has an account at a local bank, this may work to your advantage. Banks carry rolls or even bags of coins. You can get a roll or two at face, but you may be able to get larger quantities to search if you agree to pay the shipping charges that banks are charged by the Federal Reserve Bank.
One other possible source is city hall – they get lots of foreign coins in the parking meters. A jukebox operator or an arcade are both likely to have a small bucket of tokens and odd coins. A casino will sell you quarters if they still use them. Most have gone to a paper receipt system so that source is drying up. Self-service car washes usually have a quarter slot.
When dealing with banks, learn their rules. You may have to write your name or phone number on rolls you return. It’s not cool to replace coins with washers.
Important Rule: Buy the Book Before you Buy or Sell the Coin
Think about this advice and then follow it. The collector who spends all his money on coins and neglects his reference library doesn’t know what a coin is worth, and is asking for trouble. Also, you need to know as much to sell a coin as you do to buy a coin.
Repeat Advice: Know More About the Coin Than the Seller
If you’re doing business with a 30-year veteran coin dealer this is difficult, but do the research anyway. You might just learn something the dealer has forgotten. This is an incentive to do some potentially valuable research before buying a particular coin.
Once you’ve learned to leave your checkbook and credit card at home, you’re ready to do some serious collecting. Add to your collection slowly, savoring each new addition. Study it. Research it. Learn to grade it yourself. Assert your pride of ownership, but don’t broadcast the fact that you are a coin collector. Burglars assume that anyone with two coins to rub together is rich in potential loot, or has gold coin stash worth a few bucks.
Back to an inherited collection for a moment, patience is key. If the coins are properly stored they will hold their value and even become worth more. As you learn more about them you will better understand what needs to be done with them. The key word is properly stored, a topic to get into further on.
Learning how to handle your coins is of vital importance. A fingerprint can ruin a valuable rare coin’s worth. The topic is important enough to devote a chapter to it further on. Read it before you touch a proof or uncirculated coin.
If you already have a collection started you should still read this extensively from references to avoid some of the common pitfalls. The same goes for you and your accumulation or collection. Proper care will pay for itself, and not just in preservation of value, a hundred times over.