Entering numismatics introduces you to new words and vocabulary that might be unfamiliar outside of coin collecting or precious metals. Certified coins, proof coins, and graded coins are just a few terms people regularly use in the coin-collecting community that might sound intimidating to a fledgling numismatist. So, what are graded coins?
Graded coins have been given a grade or score by a third-party grading company based on the coin’s overall condition. There is a wide range of scores a coin can receive, which affects its overall value. Coins with a high grade are more valuable than low grades, while ungraded coins are on the low end.
The History of Coin Grading
Coin grading is the practice of determining the physical condition of a coin, a critical aspect in assessing its value and rarity. Initially, coin grading was subjective, relying on individual experience and expertise. As the numismatic industry evolved, standardized grading systems were developed to provide consistency and trust in the trade of coins.
The history of coin grading dates back several centuries, evolving from a rudimentary assessment to today’s sophisticated process. Initially, coin grading was more art than science, heavily dependent on individual expertise and less on standardized criteria. The earliest coin collectors relied on their experience and intuition to evaluate coins, leading to inconsistencies and subjective valuations.
The turning point in coin grading history came with the introduction of the Sheldon Scale in the 1940s. Developed by Dr. William Sheldon, this scale revolutionized coin grading by providing a more standardized and systematic approach. Initially designed for grading large cents, the Sheldon Scale soon became a universal standard for grading all coins. It quantified the condition of coins on a scale of 1 to 70, providing a more objective framework for grading.
Sheldon’s system remains the backbone of coin grading, having expanded and adapted to encompass a wide array of coin types beyond its original scope. Adopting this method marked a significant shift, bringing professionalism and consistency to coin grading that was previously unattained. This development enhanced the credibility of coin collecting and opened the door for the growth of a more sophisticated numismatic market.
Over the years, the coin grading process has seen continuous refinement and enhancement. Technological advancements, increased knowledge, and a growing emphasis on precision and objectivity have further elevated coin grading standards.
The Coin Grading Scale
The Sheldon Scale introduced a numerical system from 1 to 70, 70 representing a perfect, mint-condition coin. This scale has been universally adopted and adapted for all coin types. Its precision and uniformity brought much-needed consistency to coin grading.
| Grade | Description | Details |
| 1 | Poor (PO) | Barely identifiable; must have date and type discernible. |
| 2 | Fair (FR) | Heavily worn with some details visible, rims barely visible. |
| 3 | Almost Good (AG) | Most letters and digits are readable, rims are worn into the fields. |
| 4,6 | Good (G) | Peripheral letters and digits nearly full to full, rims range from exhibiting wear at G4 to being sharp at G6. |
| 8,10 | Very Good (VG) | Wear throughout the design, letters and digits showing softness. |
| 12,15 | Fine (F) | Letters and digits sharp, recessed areas exhibit softness. |
| 20,25,30,35 | Very Fine (VF) | Coins exhibit a progression from moderate design detail and sharp letters and digits to complete details with wear, including nearly complete details with varying degrees of softness on the design areas. |
| 40,45 | Extremely Fine (XF) | Complete details with minor wear on some or most of the high points. |
| 50,53,55,58 | Almost Uncirculated (AU) | In this grade range, coins show slight wear with full details, ranging from wear on less than 50% of the design to more than 50%, progressing from very minor to minor softness on the high points. |
| 60-70 | Mint State (MS) or Proof (PF) | Show no signs of circulation wear, maintain their original minted appearance. Variations in Mint State grades are based on strike quality, luster, contact mark characteristics, and overall visual appeal. |
Beyond the Sheldon Scale, other grading systems and methodologies have emerged, further refining the process. These include details on strike quality, luster, and the presence of any wear or damage. Modern grading also incorporates magnification tools and digital technology to inspect and authenticate coins accurately. This evolution reflects a continuous pursuit of precision in the numismatic world. The grading process is not just about assigning a number; it’s about understanding the coin’s history, craftsmanship, and journey over time.
The Coin Grading Process
The coin grading process is a meticulous and systematic approach to determining the condition and value of a coin. This process, crucial for collectors, investors, and dealers, is typically performed by professional grading services like the Numismatic Guaranty Corporation (NGC) and the Professional Coin Grading Service (PCGS). Here’s a step-by-step look at how it’s done:
- Initial Examination: The process begins with an initial examination of the coin. This step involves a visual inspection to identify any issues like damage, cleaning, or alterations that could affect its grade.
- Technical Grading: The coin undergoes a technical grading, where experts examine its specific attributes. This includes assessing the luster, strike, and wear of the coin. Advanced tools, such as magnifying glasses or microscopes, are used to inspect the coin’s surface for minute details.
- Assigning a Grade: Based on the Sheldon Scale, a numerical grade is assigned to the coin. This scale ranges from 1 (barely identifiable) to 70 (perfect condition). For example, a coin graded MS-70 (Mint State) reflects a coin in its perfect mint condition with no signs of wear.
- Additional Attributes and Designations: In addition to the numerical grade, coins may receive additional designations that describe unique characteristics. These can include Full Bell Lines (FBL) on Franklin half dollars or Deep Cameo (DCAM) on proof coins, indicating exceptional features beyond the standard grade.
- Encapsulation and Certification: Once graded, coins are encapsulated in protective, tamper-evident holders. These holders display the coin’s grade and any additional designations. A certification number is also provided, which can be used to verify the coin’s grade and authenticity in the grading service’s database.
- Quality Control: Finally, there’s a quality control phase where the graded coin is re-examined to ensure accuracy and consistency in the grading process. This step is crucial for maintaining the trust and reliability of the grading service.
The importance of this process lies in its ability to assess a coin’s condition objectively. A grade from a reputable service can significantly impact a coin’s market value, as it assures buyers and sellers about its authenticity and condition. This standardization has been instrumental in developing the coin market, making transactions more transparent and trustworthy.
Graded Coins vs. Raw Coins: Key Differences
If a coin is not graded, it is a raw coin. Understanding the distinction between graded and raw coins is essential for anyone in the numismatic market. The differentiation impacts the value, trade, and preservation of coins.
Raw Coins, also known as ungraded coins, have not undergone professional grading. They can be in any condition and may be stored or presented in various ways, ranging from coin flips or albums to buried in a yard.
Graded coins are generally more valuable and sought-after in the market because they come with verified assessments of condition and authenticity from reputable grading services. This verification offers transparency and builds trust in transactions, making them preferable for collectors, especially for rare or high-grade coins. Their graded status simplifies listing and selling, particularly online, and provides a stable long-term investment due to the reduced likelihood of disputes over their condition and authenticity.
On the other hand, raw coins, though potentially valuable, carry risks due to the lack of certified grading. This uncertainty can lead to subjective evaluations of their quality and worth, requiring buyers to exercise extra caution and seek grading and authentication for significant investments. While riskier, investing in raw coins can yield higher returns if they are later found to be more valuable than initially thought. They also appeal to collectors who relish the challenge of uncovering undervalued gems or prefer to have their finds graded independently.
Third-Party Coin Grading
If you have raw coins in excellent condition, getting them graded and certified could be worth the value increase. However, there are fees and requirements to get coins graded. If your coin is not valuable, you could lose money you cannot recoup by sending it in for grading.
Multiple third-party grading companies exist, such as NGC and PCGS. To get your coins graded, select which reputable third-party grading service you’d like to use, prepare your coins, and complete the company’s submission form with details about each coin.
Next, send the package, ideally with insurance and tracking, to the chosen grading service. The service will assess your coins’ authenticity and condition, assign a grade, and return them encapsulated with the grade displayed. The grading process can take several weeks, depending on the service’s workload and the options you selected. Be aware that grading fees are typically non-refundable, and the total cost will include the grading fees, shipping, and any additional services you selected, such as expedited grading or imaging.
