Why Should Your Coins Be Graded?
Grading Coin Standards
Coin grades are based on a scale of numbers up to seventy. A grade of seventy indicated a “perfect” coin, and is rare. Usually, coins are not graded for all seventy values. I have never seen a grade of five, six, or seven. In fact, the grades are often given for certain numbers, and they are associated with a value. MS in front of the number indicates mint state, and PF indicates proof, a special strike.
The lower grades used are
AG-3, almost good
G-8, very good
VF-20, very fine
EF-40 or XF-40, extra fine
AU-50, about or almost uncirculated
MS-60 and above are all uncirculated.
Occasionally, a value in between, such as MS-55, appear, indicating it is an exceptional piece, but cannot be elevated to the next level.
The proof coins use the same numbers, although most are uncirculated. Proof grades below PF-65 are rare.
Letters or words added change the value. First strike means the coin was struck on a particularly sharp, new die. Deep Cameo or DCML (deep cameo, mirror like) is self explanatory. Burnished refers to a burnished finish. In the case of some quarters silver is needed on those that are silver. Reverse proof indicates the image is mirrored and the field is not. And there are reverse cameo coins. Another is PL, which means proof like.
Other words that can be found are details, indicating the coin would have the grade indicated if not for the problems, such as scratches, blemishes, or other damage, and cleaned or improperly cleaned are words that you should dread. Normally, cleaned or improperly cleaned coins are not graded, but can be marked authentic.
American Numismatic Association Grading Standards
There Are Two Sides
Remember, coins have two sides. One side may be in excellent shape, but the other may require a details notation. Generally, both side of a coin should wear together due to use. But a scratch will be on one side only.
Professional Edition of the Red Book of Coins
Finding the Standards
The grading for all United States coins can be found in the Red Book, A Guide Book of United States Coins by R. S. Yeoman. There is a newer version scheduled for release in 2015 with extended grades, meaning the uncirculated grades are better broken down.
The Red Book also exists for Canadian coins.
Difficulty in Finding Standards for Foreign Coins, except Canadian Coins
Foreign coins, especially commemorative coins, are difficult to find the grading standards for. Fortunately, grading services are able to handle foreign coins, but you may pay a premium.
Learn to Grade Canadian Coins
Why Do You Need to Know the Grade?
Coins can often jump in value from one grade to the next. It is not uncommon to see a coin listed with just a few dollars of value difference from MS-4 to MS-63, then soar for MS-65 with a major jump in value. Once the jump happens the next grade change also will usually have a similar, or even greater, jump.
The problem is that this too often occurs in the uncirculated grades. What is the value of a MS-64 coin if the book price for an MS-63 is twenty dollars, but the stated value of the MS-65 coin is three hundred dollars? Certainly the MS-64 coin is worth less than the MS-65 coin, but more than the value of the MS-63 coin. But, where in the range does the true value lie? And, even grading services can err, so how certain is the grade?
Add to this the consideration that even after a coin has been placed in a slab and graded, the grade can change. Before being slabbed the coin was possibly exposed to the environment, and environmental damage can remain undetectable for years.
Grading Coins by PCGS
Graded Silver War Nickel
Graded Silver War Nickel
Top Coin Grading Services
There are many coin collectors who insist the coin be graded by either PCGS, often considered the best, or by NGC, which has an affiliation with the American Numismatic Association. There are others that do an adequate job of grading, but if the intent is to one day sell, the opinion of your future customers is a must to be considered.
Another grading service, ANACS, was actually the first. It was established to provide authentication of coins. Counterfeit coins are a problem, and the first service was a way to say that a coin was indeed authentic.
Unfortunately, coin grading services charge a fee, and that fee becomes higher than the actual value of some coins. The fee may be based on the coin’s value, and whether it is a United States coin or not. Foreign coins cost more to have graded.
Splitting Hairs for Uncirculated Coins
Grading is subjective. Some grades differ by how sharp the letters in a word are. What happens if only one letter is weak? And, what determines if the lettering is sharp? In fact, in some cases the next grade occurs if the lettering is sharper. What does sharper mean?
When splitting hairs between mint states of uncirculated coins, the exact result can often be argued one grade either way. Professional graders do a credible job, at least those at the top grading services do, but they can make a subjective call when things are close. After all, there is no MS-66.5 grade.
Adding a Level of Assurance when Selling or Insuring
Grading services add to the assurance of the stated grade. However, realizing that errors can and do occur, and that coin grades can change over time even for slabbed coins, always look at the coin carefully yourself, whether buying or selling.
Commemorative coins are different, one from the other. To set a standard regarding the letters in the word “liberty” in a headband simply will not do. Here, determining the standards is extremely difficult.
Fortunately, most commemorative coins are at least uncirculated. And, as is the case with other uncirculated coins, the grades are difficult to determine, so a professional opinion may the best course of action. Or, the coin can remain ungraded, for the cost of grading it may outweigh the increase in value the grading brings.
PCGS Coin Grading
Use Pictures for Insurance Purposes
If you insure your collection be certain to have pictures. Your opinion as to the grade will carry little weight without something to back it up. If a graded the coin was graded by a dealer before selling it to you, keep the invoice and the image of where the grade was written down. Often dealers add the grade to the cardboard of a 2 X 2.
If your coin is slabbed by a reputable third party grading service, record the serial number. That should allow you to prove when the coin was graded, and that it was in your possession after that time.
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