A Guide to Coin Grading: Are Graded Coins Worth Buying?

Definition and Purpose of Coin Grading

Coin grading is a systematic process used to evaluate and assign a standardized grade to a coin based on its condition, wear, and overall state of preservation. The primary purpose of coin grading is to provide a universally accepted and consistent way to communicate a coin’s quality and rarity. This grading system helps collectors, investors, and enthusiasts assess the value and authenticity of a coin accurately.

In essence, coin grading involves examining various aspects of a coin, such as its surface, details, and overall appearance, to determine its grade on a predetermined scale. The assigned grade indicates the coin’s relative state of preservation and provides crucial information to potential buyers or sellers.

Historical Context and Evolution of Coin Grading

The practice of coin grading has evolved over time, mirroring the growth and sophistication of the numismatic community. In the earlier days of coin collecting, enthusiasts relied on subjective descriptions to communicate a coin’s condition, leading to inconsistencies and misunderstandings.

As the demand for a more standardized approach increased, the concept of coin grading took shape. One of the pivotal moments in this evolution was the introduction of the Sheldon Coin Grading Scale in the United States in the 20th century. Developed by numismatist Dr. William Sheldon, this scale assigned numerical values to different levels of wear and preservation, providing a more objective and standardized method for assessing coins.

The adoption of the Sheldon Scale marked a turning point in the numismatic world, and it laid the foundation for other grading systems globally. Different regions and countries developed their own grading systems, tailored to their unique historical and numismatic contexts. This standardization not only facilitated easier communication among collectors and dealers but also enhanced the transparency and reliability of coin transactions.

Today, coin grading has become an integral aspect of the numismatic landscape. It enables collectors to make informed decisions about their acquisitions, provides a common language for enthusiasts worldwide, and ensures the preservation of the rich historical and artistic value encapsulated in each coin. As we explore further into this guide, we will delve into the specific grading systems and factors that contribute to the nuanced world of coin grading.

It will come as no surprise that various grading systems have developed around the world over the years. Here we explain the three best-known and referenced systems.

 A. Sheldon System

The Sheldon Coin Grading Scale is a foundational system in the world of coin grading, serving as a widely accepted standard for assessing the condition and value of coins. Developed by Dr. William Sheldon in 1949, this numerical grading scale revolutionized the way collectors and dealers communicated about coin quality. The scale ranges from 1 to 70, with lower numbers indicating more wear and higher numbers representing coins in better condition.

Numerical Grades

1-20 (Poor to Extremely Fine): Coins in this range exhibit significant wear, with details often worn smooth. These are typically considered as heavily circulated coins.

40-60 (About Uncirculated): Coins in this middle range may show traces of wear but generally retain their original details. They are often referred to as lightly circulated or almost uncirculated.

61-70 (Mint State): Coins in this upper range are considered Mint State, indicating little to no wear. The higher the number, the fewer imperfections are present, with 70 being a perfect, flawless coin.

Application and Significance

The Sheldon Scale is particularly influential in the grading of United States coins and proof coins, and it has been adopted by major grading services such as NGC (Numismatic Guaranty Corporation) and PCGS (Professional Coin Grading Service). Understanding the Sheldon Scale is crucial for collectors and investors as it’s the most globally recognized system, used by the dominant providers of professional grading.

The British coin grading system stands as a distinct approach in the assessment of coin condition, reflecting the unique numismatic traditions of the United Kingdom. Unlike the numerical Sheldon Scale used in the United States, the British system employs descriptive terms to categorize the condition of coins.

Application and Significance

The British grading system provides a nuanced language for describing coin condition, emphasizing the preservation of details and overall visual appeal. This descriptive approach caters to collectors who appreciate the aesthetic qualities of coins and wish to communicate their condition in a more narrative fashion. Understanding the British coin grading system becomes essential when dealing with UK coins or engaging in transactions within the British numismatic community.

The European coin grading system represents a diverse approach to assessing the condition of coins, incorporating regional nuances reflective of Europe’s rich numismatic history. Unlike standardized numerical scales, the European system often varies between countries, each employing unique terminology to describe a coin’s state of preservation.

Country-Specific Grading Terms

Here are some typical regional expressions for varying coin conditions. A more comprehensive list can be found in table below;

France (Fleur de Coin – FDC): Similar to the British system, Fleur de Coin denotes a coin in impeccable condition, free from wear, and often displaying a brilliant luster.

Germany (Stempelglanz – STGL): Stempelglanz indicates a coin in mint state, exhibiting no wear and maintaining sharp details. This term aligns with the concept of uncirculated coins.

Italy (Fior di Conio): Fior di Conio, translating to “flower of the die,” signifies a coin in pristine condition, often considered equivalent to uncirculated or near-mint state.

Spain (EBC – Estado Brillante de Conservación): Estado Brillante de Conservación denotes a coin in brilliant condition, akin to uncirculated coins in other grading systems.

Regional Grading Practices

While some European countries align with broader numismatic traditions, others may have country-specific grading practices. Understanding these regional variations is crucial for collectors and enthusiasts engaging with European coins, ensuring accurate communication regarding a coin’s condition and value.

Application and Significance

The European coin grading system reflects the diverse cultural and historical contexts within the continent. Numismatists navigating European coins or participating in transactions within the European numismatic community benefit from familiarity with country-specific terms and practices. This system underscores the importance of considering regional influences when evaluating coins and reinforces the notion that coin grading is a dynamic and evolving field, shaped by the unique perspectives of different cultures.

Grading a coin may seem like a daunting task, but with a systematic approach, you can evaluate its condition more confidently. It may not be an official certified grading, but this knowledge can help you be more savvy when assessing a coin’s condition.

1. Examine the Coin’s Wear

Start by inspecting the high points of the coin where wear is most likely to occur. Look for smoothness or dulling of the metal, indicating varying degrees of wear.

2. Assess Lustre and Toning

Hold the coin at different angles under a light source to observe its lustre. Note any toning or discoloration, which can impact both the visual appeal and the overall grade.

3. Inspect for Surface Marks and Scratches

Carefully examine the entire surface for any marks, scratches, or blemishes. These imperfections can significantly affect a coin’s grade, especially if they are prominent or numerous.

4. Evaluate Striking Details

Focus on the coin’s design elements. Check how well-defined and sharp the details are, paying attention to the central and peripheral features. Well-preserved striking details contribute to a higher grade.

5. Examine the Rim for Dents or Damage

Inspect the rim of the coin for any dents or damage. A smooth, undisturbed rim is generally preferable, as dents can affect both aesthetics and structural integrity.

6. Use a Magnifying Glass

Employ a magnifying glass to get a closer look at the coin’s details. This tool can reveal subtle imperfections that might not be apparent to the naked eye.

7. Handle with Care

Always handle the coin with clean, dry hands. Use soft surfaces or gloves to avoid introducing additional scratches or damage during the grading process.

8. Reference Grading Guides

Utilize reputable coin grading guides or online resources to cross-reference your observations. This step can provide additional insights and ensure a more accurate assessment.

9. Practice Consistency

Strive for consistency in your grading approach. Over time, developing a consistent methodology will enhance your ability to accurately evaluate different coins.

By following these straightforward steps and practicing regularly, you’ll develop a more discerning eye for grading coins. Remember that coin grading is both a skill and an art, and with experience, you’ll become more proficient in assessing the condition and value of your numismatic treasures.

Professional grading services play a crucial role in the world of coin collecting and investing, providing a standardized and unbiased assessment of a coin’s condition. Opting for professional grading services offers numerous advantages, including authentication, preservation, and increased marketability. Choosing between NGC, PCGS, or ANACS often depends on individual preferences, market dynamics, and the specific needs of collectors and investors. Regardless of the service chosen, the certification from these reputable entities adds credibility and confidence to the grading process. The graded coin returns in an appealing plastic container including certification of the grade, authenticity and condition. This plastic slab packaging is the reason that some collectors refer to graded coins as slabbed coins.

• Accuracy: NGC employs experienced graders with extensive knowledge of numismatics.
• Security: The tamper-evident holders add an extra layer of protection to the certified coin.
• Reputation: NGC-certified coins are widely recognized and accepted within the numismatic community.

• Consistency: PCGS is known for its strict grading standards, ensuring uniformity in the assessment process.
• Market Acceptance: PCGS-certified coins are widely accepted in the numismatic market, facilitating ease of buying and selling.
• Grading Guarantee: PCGS stands behind its grades, offering a grading guarantee that instills confidence in the accuracy of their assessments.

• Educational Focus: As part of the American Numismatic Association, ANACS emphasizes education and provides resources for collectors and enthusiasts.
• Historical Context: ANACS incorporates historical context into its grading, considering factors beyond wear and tear.
• Affordability: ANACS often provides grading services at a more accessible cost, making it an attractive option for certain collectors.

PCGS and NGC both provide coin grading and authentication services for submissions from the UK. Here are some key details:

PCGS

• PCGS has an authorized UK dealer network that collectors can submit through
• UK submissions are sent to PCGS headquarters in Paris for processing
• Standard service turnaround time is about 4-6 weeks from Paris office
• Fees/membership rates same for UK as United States

NGC

• Coins can be submitted directly or mailed through authorized NGC UK dealers
• UK coins go to NGC’s main headquarters in Sarasota, Florida
• Turnaround runs about 4-5 weeks including delivery transit times
• Fees/membership rates same for UK as United States

So collectors in the UK have access to submission networks for both major third-party grading companies. The coins ultimately get graded at NGC’s US location or PCGS’s European branch, then returned to the dealer or collector submitter back in the UK.

Here is a breakdown of the estimated market share held by major professional coin grading companies:

• PCGS (Professional Coin Grading Service) – 65-70%
• NGC (Numismatic Guaranty Corporation) – 25-30%
• ANACS (American Numismatic Association Certification Service) – 5%
• ICG (Independent Coin Grading Company) – <1%
• SEGS (Sovereign Entities Grading Service) – minor share
• Other smaller companies – less than 1% combined

PCGS and NGC together dominate the global coin grading and encapsulation market, with estimated shares of around 90-95% combined. As the oldest and most established brands, they authenticate, attribute, grade and certify the majority of collectible coins submitted by dealers and collectors around the world.

ANACS and ICG have diminished market share today, but still command some brand recognition in vintage holders from decades past. Newer entrants like SEGS take negligible share while PCGS and NGC retain their strong positions in the industry built over 30+ years. Their consistency, reputation, resale value, and new security technologies and features make them the go-to companies for most coin submissions currently.

Our automated portfolio builder will provide suggestions based on various investment objectives.

1. Condition Clarity

Graded coins provide a standardized and universally recognized indication of a coin’s condition. This clarity can enhance the coin’s appeal and may justify a higher valuation.

2. Market Confidence

Graded coins often instill confidence in buyers. The certification from reputable grading services assures authenticity and accuracy in assessing a coin’s grade, reducing the uncertainty associated with ungraded coins. For many novices, the fear of buying counterfeit coins can prevent venturing into the market at all.

3. Preservation and Protection

The encapsulation of graded coins in tamper-evident holders protects them from environmental elements, wear, and mishandling. This preservation can contribute to maintaining the coin’s condition over time, which is a factor in determining value.

Considerations to Keep in Mind

1. Grading Costs

While grading can potentially increase a coin’s value, it’s essential to factor in the costs associated with the grading process. Grading fees can vary, and these costs may impact the overall return on investment.

2. Collector Preferences

Some collectors place a higher value on coins in their original, unaltered state. For these individuals, the appeal lies in the coin’s history and authenticity, and they may not necessarily prioritize graded coins.

3. Numismatic Trends

The value of graded coins can also be influenced by broader numismatic trends. Coins from certain periods, mints, or with specific attributes may command higher prices in the market, regardless of grading.

While buying a graded coin may suit a coin collector or nervous buyer, inevitably it’s unsuitable for serious coin investors. While buying an already graded coin provides comfort of certification, the financial cost inhibits the purchase as a viable investment.

Most dealers sell graded coins for huge premiums versus their ungraded counterparts. For anyone considering buying gold or silver coins, this represents a huge additional outlay and risk. Paying a 30-50% premium for an encapsulated graded coin rarely pays off in financial terms. It’s incredibly unlikely that any potential buyer, including the original dealer, will want to pay the same inflated premium for your coin. Afterall, ungraded coins with the in the same grade of condition will be available at a fraction of the price.

When attempting to sell a graded coin it’s natural to want to recoup as much of the perceived ‘additional value’ as possible. This inevitably means pairing your coin with the perfect collectable buyer which can severely delay the selling process. In a market where the underlying precious metals fluctuate along with the desirability of certain coins, being able to sell quickly and efficiently can add crucial margin to your investment. Timing can be everything when buying and selling gold.

Certainly for investors purchasing a number of coins, the process of selling a large quantity of graded coins would prove very inhibitive. We always recommend investors buy ungraded coins from an established and reputable dealer to obtain the absolute best value and increase their chances of trading a quantity of coins at a profit. A strategy that some coin investors apply is to purchase ungraded coins from dealers and then get them graded themselves. The cost of doing this is far lower than buying already graded versions.

What is coin grading, and why does it matter?

Coin grading is the evaluation of a coin’s condition using standardized criteria. This process, essential for determining rarity, collectability, and value, ensures a universal language among collectors and investors. By assessing wear, details, and overall preservation, coin grading provides accurate insights, guiding transactions and preserving the integrity of numismatic treasures.

How does the Sheldon Coin Grading Scale work?

The Sheldon Coin Grading Scale, ranging from 1 to 70, assesses a coin’s condition numerically. Lower numbers indicate more wear, while higher numbers represent coins in better condition. Developed by Dr. William Sheldon, this widely used scale provides a standardized way to communicate a coin’s quality and plays a crucial role in the numismatic world, aiding collectors and investors in assessing and trading coins.

Are graded coins worth more than ungraded ones?

Graded coins can be worth more due to increased authenticity, standardized grading, and preservation. However, factors like grading costs, collector preferences, and market dynamics influence their overall value. While collectors may pay more for high-graded coins, it’s essential to weigh the costs against potential financial gains and consider individual goals before opting for graded coins.

Can I grade a coin myself, and how?

While learning to grade coins yourself is possible, it requires a keen eye and understanding of key factors like wear, lustre, and striking details. Utilize online resources, follow step-by-step guides, and consider professional grading services for reference. While it takes practice to master, self-grading can empower collectors and enthusiasts to assess their coins more confidently over time.

Should I buy already graded coins for investment purposes?

It is not advised to buy graded coins for investment purposes. The mark-up to buy graded coins can be significant to the point of negating any profit potential. Unless you need the re-assurance of a coin’s official condition and authenticity, then it’s best to stick with ungraded bullion coins to derive maximum value and returns.

How much does it cost to get a coin graded?

The cost of grading a coin varies based on factors like the grading service, the coin’s value, and the desired turnaround time but $30-50 covers a majority of coin types. The cost will increase once factors such as transporting the coins are added and any extras like expediting the process, especially if you reside outside of the US.

Is it worth getting coins graded?

Getting coins graded provides valuable insights into a coin’s rarity, authenticity, and condition. Utilizing reputable coin-grading services instills confidence in transactions, especially when buying coins ‘unseen’ through mail order or online auctions. However, the decision to get coins graded should be weighed against associated costs and individual preferences.

Can I get my coins graded for free?

While professional grading services typically charge fees, some online platforms, such as PCGS’s Photograde, offer a free resource for visual reference. Photograde allows users to assess their coins by providing images for various grades. It’s important to note that this service does not involve the actual grading process conducted by professional grading companies, and obtaining an official grade usually incurs fees.

What is a slabbed coin?

Slabbed coins are numismatic treasures encased in transparent holders, preserving and authenticating their condition. Graded by professional services, these coins gain value and desirability among collectors for their certified authenticity and preservation.