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What's My Coin Worth?
By Alan Herbert, Warman's U.S. Coin Collecting
March 16, 2012



Excerpted from Warman’s U.S. Coin Collecting by Alan Herbert, available from www.ShopNumisMaster.com. This article is part of an ongoing series for beginning collectors. Click here for past articles, and scroll down to see the series sponsors below.



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. 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 the value.

Wear is a key factor. The more wear, the less the collector value. It’s important enough to have a 70-point scale of wear. Assigning a number is defined as grading, a term you will hear frequently. Also important are the number minted and in some cases the estimated survivors. Sometimes, it even depends on the rarity of a specific grade.

Warman's U.S. Coin Collecting
Warman's U.S. Coin Collecting

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A common request is to provide a price range. That’s something I won’t do either, because for most people a range is meaningless and unexpectedly creates a serious problem. As an example, a 1903 Barber dime catalogs at $4 in the lowest grade and $1,100 in the highest grade. If I quote that range to a collector, he will automatically assume that his battered and bent 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, not wanting to understand that a dealer has to have a profit margin to stay in business. The best solution to this is to learn how to grade your coins yourself.

“Know more about the coin you are buying than does the person selling it.”

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 quotes as a starting point to which they apply their personal formula, so you may never see a dealer’s prices that exactly match the price guide.

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. 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.

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. At this point you will see the term “grade” used. When you see a range of values take one of the lowest figures rather than the highest as the likely value of your coin.

Larger bookstores carry price guides or you can order them on the Internet. Check out the price guides at www.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 material to add to your library. Avoid big ticket 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 dollars (Morgan and Peace 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.

This is also a good time to get to know your local coin dealer. He has the folders and other storage materials and 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.

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 most donations today 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.

Time to repeat a very 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 is asking for trouble. Also, you need to know as much to sell a coin as you do to buy a coin.

And, a second piece of advice is repeated: “Know more about the coin than does the person selling it to you.”

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 thorough 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.



 

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