Coin Grading and its Importance

18 Apr 2020  Sat

The face value of a collector coin rarely matches the true value of the coin which is defined by its grade. But how can an investor or collector be certain the grade assigned to the coin is accurate? To understand coin grading today, it’s important to look at its evolution. The Evolution of Grading In the earlier time, there were four broad grades: poor (well-worn pieces with outlines and no details), good (fairly worn but details remain), very fine (many details with some wear), and new (no wear and all details present). This system remained largely unchanged in the 19th century. In 1949, Dr. William Sheldon contended this system lacked nuance and couldn’t account for the various states of preservation of coins. Sheldon developed a system from 1–70 with “1” assigned to a coin lacking virtually all detail and “70” represents a perfect coin. This scale of 1–70 fit coins into thirteen grades from poor to perfect uncirculated. The upper portion of the Sheldon Scale, 60–70, is reserved for uncirculated coins. Sheldon’s scale was used in numismatics for 30 years and in the mid-1980s, a group of coin dealers formed an independent, third-party coin certification service. The objective was the standardization of grading among dealers to bring consensus grading to the marketplace. That’s how professional coin grading services were created, and it’s the way coins are currently certified. Sheldon’s scale remains relevant today and a useful tool to determine the value of a coin. How does Grading work? When a dealer submits a coin to a grading service, it’s graded by at least two experts. Independently, they must come up with the same grading. If they disagree, a third expert will review it. Once graded, the coin is “slabbed”, or encapsulated in tamper-resistant plastic with the grade printed on a tag, and the coin is then stored or sold. Is Coin Grading Mandatory? Not all coins need certification. Some aren’t worth the time and expense that certification can add to a coin as the cost ranges from $15-100 per coin. Seasoned coin collectors can use their judgment and experience with other coins to make an assessment of the coin. Is Buying a Certified Coin Worth it? While coin grading services are fee-based, once the coins receive their grade by a respected company, their value may be enhanced. Trusted seals of authenticity and condition may make coins worth more overall. As a potential buyer, you should weigh these options and determine whether these additional expenses are warranted.

Knowledge Base