When someone finds an old US coin, the immediate question is “What is it worth?” Many times you hear someone respond, “Get a Red Book and look it up.” But … is it really that simple? Nope!
The Red Book and all published price guides list Catalog Values for coins. Can you sell a coin at Catalog Value? Can you buy a coin at Catalog Value? The answer to both questions is “no.” Catalog Value is only a guide. It is not a buy or sell price. You have to interpret Catalog Value to really understand “What is it worth?”
THE VARIOUS TYPES OF COIN PRICES
Coin enthusiasts use four different terms when referring to coin values. The Catalog Value is an inflated price published on web sites and in coin magazines, coin catalogs and coin books. Collectors who know about coins rarely buy coins at the catalog price. Coin dealers never pay catalog price for coins they buy from collectors or the general public.
Next there is the retail price. This is the price that collectors pay for coins they purchase from coin dealers, from eBay and other auction houses, and from other collectors. Another name for retail price is ask price. In other words, the ask price is the amount dealers ask collectors to pay for a particular coin.
Finally, there is the bid price. This is the amount coin dealers are willing to pay for coins they buy from collectors and from the general public. The difference between ask and bid is the dealer margin. If, for example, a coin dealer buys a Morgan dollar at a bid price of $25 US dollars, and then sells it to a collector at an ask price of $35, the $10 margin goes toward the dealer’s expenses and profit.
When someone wonders "What is my coin worth?" they usually mean "What can I sell my coin for?" i.e., they are wondering about bid price. As a general rule, the bid price runs about one-half of Catalog Value, so, if the Red Book says a coin catalogs at $100, its actual value is about $50 because that is what it can be sold for. The one-half rule is very approximate and has many qualifiers. We discuss the qualifiers next.
To round things out, Face value is the value shown on the coin itself.
RULES OF THUMB
For most collectible coins, bid runs about one-half of catalog and ask runs between bid and catalog. For special coins, such as those with rare dates, in excellent condition, or with unusual appeal, bid values can rise toward catalog value. Problem coins with scratches, spots, stains, or having been cleaned or mounted in jewelry, are worth far less than coins without problems. Usually, problem coins carry no value at all, except the value of precious metal they contain, if any.
Here is a chart that may help.
In the graphic above, Catalog Value is represented by the blue horizontal line, and the gray $0 line represents no value at all. The green and orange bars represent the range of values collectors and dealers usually pay relative to the Catalog Value. When a collector buys a coin from a dealer or at auction, he or she usually pays a little below catalog value, as represented by the Average coins annotation on the green bar. If a particular coin is especially appealing, a collector may be willing to pay over catalog price to add it to his or her collection. This is shown by the green bar extending above the Catalog Value line.
On the dealer side, an average coin usually fetches one-half of catalog value or less. Only if a coin is very easy to sell will a dealer pay more. For instance, a 1909S VDB Lincoln cent is a well-known rarity and is very easy to sell. For that coin, a dealer is usually willing to pay more than one-half Catalog Value.
ADDITIONAL FACTORS
Wear - Catalog values vary with the condition of the coin, specifically, the amount of wear a coin has acquired from circulation. Professional numismatists and avid coin collectors use numeric grading scales to describe condition or wear. Coin grading is one of the joys, and one of the headaches, of coin collecting.
At our CoinQuest.com website, we do not use detailed grading, but only describe wear and condition with simple adjectives.
We use simple adjectives because coin pricing varies dramatically even when a particular coin has a fancy numerical grade such as G-4, XF-40, or MS-65. Numismatists have had plenty of opportunity to develop useful grading scales, but, except in a few specific instances (e.g., Early American Coppers), we are stuck with a grading scale developed by a man named Sheldon in 1949 which comes woefully short for predicting coin prices. The Sheldon system has been tweaked from time to time, but still remains essentially unchanged over the past three-quarters of a century. For a better explanation, refer to our substack article It’s a Crapshoot.
Precious Metal - There are three take-aways from the complicated chart below.
The take-aways are:
Value goes up as wear decreases
Value goes up as rarity increases
Value never goes down below the value due to precious metal
So, the value of a rare coin has three components: (1) the face value of the coin, (2) the value due to precious metal and (3) the value due to the coin’s rarity and condition. Unfortunately, Catalog Value mixes all three components into a single number, obliterating any possible insight into the three components. A better system would separate the three components.
Coins made out of gold or silver contain precious metal. Coins made out of copper, bronze, brass, nickel, steel, iron or other base metals have no precious metal value, so their value comes only from face value plus any value due to rarity and condition.
For further discussion of face, precious metal, and rarity/wear/condition value (probably more discussion than you want to hear!) see Silver Dollars: What Are They Worth? on substack.
Eye Appeal - Eye Appeal is not part of Catalog Value, but it is a huge factor when determining the value of a particular coin. If you had a bunch of, say, 1935 Lincoln cents laid out face up on a table, one or two of them would likely catch your eye apart from all the others. Those coins with good eye appeal are worth more than “normal” coins, but that is not included in Catalog Value.
All the Buffalo Nickels in the graphic above have about the same amount of wear and therefore only one Catalog Value. But are they all worth the same amount? Clearly, the answer is “no.” So Catalog Value is a very rough guide, nothing more.
Cleaning - One of the biggest problems with rare coins is cleaning. Well-meaning people often clean their coins with steel wool, silver polish, acid, or other similar desctructive processes. IF YOU ARE TEMPTED TO CLEAN YOUR COIN, DON'T DO IT. CLEANING RUINS VALUE. You can't fix eye appeal or damage by cleaning your coin.
Catalog Value applies only to coins that have not been cleaned. Knowledgeable collectors will not buy cleaned coins. Neither will dealers. Their value is zero.
Damage - Problems inflicted on a coin over and above wear are considered damage by coin collectors, and they render the coin's value to almost zero. Problems include scratches and stains, spots and discoloration, corrosion, mounting as jewelry, gouges, nicks, and similar physical damage. Cleaning (see above) is considered damage by coin collectors.
Damaged coins made out of precious metal are worth their weight in gold or silver. Also, damaged but very rare coins can still hold a little value due to high rarity.
Note that “error coins” are not damaged coins. Errors coins are produced in error during the minting process and can be very valuable due to rarity. For instance, a 1955 doubled die obverse error coin catalogs well above $1000, even in worn condition. Studying error coins takes a lot of attention and experience. You must be able to discern errors made at the mint and separate them from “post mint damage” which occurs after the coin has left the mint.
Toning - Opinions are mixed for toned coins. Some collectors seek them out, other collectors shun them. Toned coins have picked up surface impurities from the air and, over time, have become discolored. Most often the added color detracts from the coin's eye appeal. But sometimes toning can be quite attractive. Some adjectives used to describe toning are shown in our figure.
Most of the time, Catalog Value does not account for toning. Some publications separate copper coins into “red,” “brown” and “red-brown” categories which account for toning in the specific instance of uncirculated copper coins.
Holders - Loose coins in circulation are sometimes called raw coins. When collectors find special coins, they usually place them in holders. Holders can be very simple or very elaborate, and a few typical styles are shown in our picture. In general, coins in holders are worth more than loose coins, but not because of the holder, but because someone has singled them out as rare or special.
The holder itself, even a fancy “numismatic slab,” does not add value to a coin. Collectible coins stand on their own merits, with or without holders.
SUMMARY
All in all, Catalog Value accounts for face value, precious metal value, and value due to rarity and condition or wear, with these three components smashed together into a single dollar value. Catalog Value does not capture the effects of eye appeal, cleaning, damage or toning. With all these variables in play, Catalog Value cannot accurately represent the actual value of one specific coin but serves instead only as a guide to value.
Further, Catalog Value is an inflated value. Under normal circumstances, you cannot buy or sell a coin at Catalog Value. An approximate rule of thumb says you can sell a coin at one-half Catalog Value and buy a coin at three-quarters Catalog Value.