Coin collecting is a very popular hobby. There are thousands of coin dealers, at least a half a dozen numismatic TV shows, and several mints producing a wide variety of items. The United States Mint is the ONLY authorized manufacturer of official United States coinage. It is also part of the United States Department of the Treasury. Another of my articles explores dealers and other mints. Here we will discuss the basics of how to appraise a coin, several coins, or a whole collection.
How to Identify and Evaluate Coins
If you are new to the hobby or have only a "general" idea regarding the value of coins, you will be at a big disadvantage trying to appraise any coin(s). This is not a job for amateurs. It could cost you or the owner of a valuable collection an awful lot of money if you are not prepared. Your choices are really straightforward. You must take the time to thoroughly learn about numismatics or consult a certified dealer. There is no "winging it" here! The most important characteristics of any coin are its condition, scarcity, mint mark, and demand. A good place to enhance your knowledge is any (or all) of the three numismatic publications listed in Steps 2, 3 and 4.
The "Red Book" (R.S. Yeoman, Edited by Kenneth Bressett)
This has been published annually for the past 60 years. It is a very good learning tool for the novice collector. It will familiarize you with a lot of the details about the minting and distribution of coins. You will learn about mint marks, types, varieties and the history of coins. The emphasis of this book are retail prices for the various U.S. coins and medals.
The "Black Book" (Marc and Tom Hudgeons)
This is another publication which has been around for almost 50 years now. The primary focus here is the wholesale price of coins. Remember, dealers sell at retail and buy at wholesale. That is how they make a living! The "Black Book" is a useful guide for the novice and intermediate collector.
This is the absolute and definitive coin value reference source. It lists what the typical dealer is willing to pay for a specific coin and the price he/she is willing to sell it for. When you "graduate" to the higher levels of the hobby, this will be an integral tool for buying and selling of coins.
Another factor is the GRADE of a coin. Coins are designated as "raw" (ungraded, and usually "loose" or in "flips") and "certified." The latter refers to the grading and encapsulating of coins by official grading services. The two most recognized and popular services are: PCGS (Professional Coin Grading Service) and NGC (Numismatic Guaranty Corporation). When a coin is "slabbed" and graded, it becomes a commodity and its value can be ascertained with a high degree of accuracy. For example, your "slabbed" MS63 1882 CC Morgan Dollar will command a price which is consistent no matter which dealer wants to purchase the coin. (All dealers understand the grading system.)
Sheldon Grading Scale
Most coin grading services use the Sheldon Scale, which was created in the late 1940s. It is a standardized numbering system from 1 to 70, starting with 1 (Poor), all the way to Mint State or Proof 70 (which is perfect). Anyone who wants to appraise coins must know this scale in order to classify coins.
You will need to sort out your coins by metal/type (gold, silver, nickel and copper), and then denomination. For example, you may have one or two gold pieces, several Morgan silver dollars, some Washington quarters, Lincoln cents, Mercury dimes and so on. Use gloves to handle the coins. If gloves are not available, then wash your hands before touching any coin. If possible, buy some "flips" (small acetate containers) for storing coins individually.
Do NOT clean a coin. Never! It is the among the worst things you can do when evaluating coins. You will decrease their value by 50 percent or more. Cleaning solvents are worthless and will cause irreparable damage. And PCGS, NGC and most dealers will reject any submitted coins which have been cleaned. Do not let coins touch or rub against each other. This will create nicks and scratches and will reduce their value.
If there is a dealer in your town, he/she might be willing to look at your collection for free. Some very rough estimates may be possible to establish value for some of your coins. If there are any coins worth grading, the dealer can be very helpful for a small fee regarding the submitting of coins to a grading service. Numismatic shows are also good venues to bring your coins for evaluation.