A Collector's Guide to Proof Coins

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What Are Proof Coins?

Proof coins are a special type of coin manufactured by the U.S. Mint using a special stamping process. Most proof coins are minted in limited editions for commemorations, special presentations, souvenirs, and coin collecting. These coins are never manufactured in large quantities or for general circulation.

Proof coins contain the same amount of precious metal as any other coin of the same denomination. They are sold for more than their face value by the government mint to cover their special manufacturing costs. This is an indicator of their rarity. Sometimes proof coins are sold only in sets of denominations made in a given year. This further increases their value. Proof coins are popular among coin collectors because of their historical significance, artistic value, and monetary value. Because proof coins are made from the same precious metals used in any other coinage, proof coins are also popular solely as investments.

This guide provides basic information on how proof coins are manufactured and what makes them different from other types of coinage. Whether consumers are new to the coin collecting market, or interested in buying and selling proof coins for profit, shoppers should familiarize themselves with the history of proof coins, as well as how proofs are valued in the market. Proof coins are sold by the original manufacturer, the U.S. Mint, but many proofs eventually reach the resale market among hobbyists, professional collectors, and investors. Coin dealers and ecommerce sites make up a significant portion of the marketplace for buying and selling proof coins.

A Brief History of Proof Coins

The U.S. Mint began producing proof coins in the 1850s. Most early proofs were struck as presentation pieces or as patterns made for new designs prior to production of coins for regular circulation.

Proof coins prior to 1968 were manufactured primarily at the mint in Philadelphia. In a few rare instances, presentation pieces were made at branch mints. Current proof sets are made at San Francisco and West Point.

How Proof Coins are Made

The term "proof" refers to a coin's method of manufacture, not its condition. It is the selection of raw materials, the attention paid to the dies, and the complexity of the manufacturing process that makes proofs easily distinguishable from general circulation coins.

The raw form of a proof coin is called a planchet, which is a blank made from precious metals . Only those in pristine condition are used to make coins. The blanks are polished with brushes to remove residue prior to being stamped with dies. Each side of the coin has its own die. The coin dies are also highly polished. The polished dies give proof coins an arresting appearance.

The blanks are hand fed into the coin press. Each blank is struck two or more times by the coin die. Proof coins receive at least two strikes from the coin press. This forces metal into all the crevices of the die and gives the coin a frosted look on the raised images and a brilliant mirror-like finish in the background. This contrasting finish is called "cameo." To distinguish a cameo coin, the letters "CAM" are added to its description. "DCAM" indicates a deep cameo, meaning the cameo is particularly prominent.

The care taken with the proof coin manufacturing process provides a level of detail not seen in most non-proof coins. Normal production coins, even those in uncirculated, or "mint" condition, have softer details and imperfections.

Once minted, proof coins are carefully inspected and put inside protective plastic sleeves. They are stored in satin-lined velvet presentation cases with an official Certificate of Authenticity issued by the mint. 

Mint Marks on Coins

Often U.S. proof and uncirculated coins will have a letter, or mint mark, indicating the mint where they were produced. Occasionally governments will make proof coins at a different mint than regular coins. Currently, the U.S. government operates mints in Philadelphia (P), San Francisco (S), West Point (W), and Denver (D).

Uncirculated and Prooflike Coins

In addition to proof and general circulation coins, there are two other types of minting processes that create relatively valuable coins. These are "uncirculated" and "prooflike" coins.

UNC

UNC is the abbreviation for "uncirculated." These coins are manufactured using the same equipment and materials as general circulation coins but are not placed into circulation through commercial banks. Their details should be sharp and they should look like unhandled coins right out of the minting process. UNC-grade coins are in new condition, but this does not necessarily mean they are perfect. They may have surface marks, scratches, or light abrasions from the minting and handling processes.

Any kind of handling or improper storage of a coin can result in wear on the coin's surface. This includes handling with bare hands and polishing. Even if very minor, evidence of any wear can cause a coin to no longer grade "uncirculated."

Prooflike

Prooflike coins are made of proof-quality planchets using uncirculated coin minting dies. They exhibit a very reflective surface due to the polished blanks but the dies used are not proof quality, so they do not produce the mirror-like surfaces and frosted reliefs that are typical of proof coins. The process yields a high-quality coin with a lower value than a proof coin.

How Proof Coins are Evaluated

Proofs are not made to circulate in commerce. Much of what determines their value is how the coins are graded on a proof grading scale. The grading scale is an attempt to standardize the value placed on all types of coins based on their physical condition. As with any category of coins, mishandling proofs can lower their grade and, in turn, their value.

Proof coins are usually the rarest coins in a particular year's minting. This usually means that a proof coin will be more expensive than an uncirculated coin of the same date. For most U.S. gold and silver coins, the proofs contain the same amount of precious metal as non-proof coins, so the variability in value is primarily due to their physical condition.

Coin Grading Scale

Coin collectors use a grading scale to describe the condition of coins, but evaluating coin quality is not a precise science. There are no worldwide standards. Countries, mints, and individual collectors can refer to their qualities in any way choose. However, much of the coin collecting world has evolved into using the same standards.

Today's grading of proofs is similar to the grades used for uncirculated coins. The attributes "PR" or "PF" stand for "proof," and these marks are used instead of "MS" (mint state). Like uncirculated coins, proofs can experience toning, tarnish, or darkening over time, in addition to the damage caused by handling. Different levels of damage, overall condition, and rarity are all factors that affect a coin's grade.

Where to Find Proof Coins on eBay

eBay is one of the most convenient resources for finding, buying, and selling proof coins. Thousands of proof coins and proof coin sets are listed under the Coins & Paper Money category. You can also search proof coins on the eBay Stores site where sellers list all their goods in one location. If you would prefer to let eBay vendors come to you, post a description of the item you are looking for on the Want it Now section under your eBay account. This is a particularly useful way to shop if looking for a hard-to-find item.

Buying proof coins is just like purchasing any legal tender. The U.S. Mint always issues a Certificate of Authenticity with every proof coin or coin set made. Make sure this Certificate is included with any proof coin you purchase.

eBay monitors the quality of all online activities between buyers and sellers, including all communication and transactions. The eBay seller rating program provides a standardized system for evaluating vendor performance. It gives buyers the chance to record ratings and provide feedback. eBay also offers its Buyer Protection services to ensure that you get what you pay for and that your online purchases are secure.

Review all charges before you click the purchase button. Some sellers include free shipping. This could influence whether you buy from one merchant versus another. You might want to look for a dealer in your area, and get a first-hand look at their inventory. Make sure you take note of seller return policies. There are some sellers who do not accept returns. This should be highlighted very clearly in their listings.

Never pay for your purchases by sending cash or checks through the mail or with wire transfers. These payment methods are not secure. eBay requires that all purchases and refunds be handled through the PayPal payment system. You do not need to have an account with PayPal in order to pay for your eBay purchases, but setting one up makes sense if you are going to buy anywhere online. Many ecommerce sites use PayPal for their credit and debit card processing.

When participating in eBay's auction environment, make sure you understand how this system works. If you need information on how to make purchases through any eBay avenue, the answers to your questions can probably be found in the Learning Center or through eBay University.

Conclusion

Proof coins in top condition are usually significantly more expensive than their uncirculated brethren. The question any coin buyer needs to ask is "Are they worth it?" Proof coins contain the same amount of gold, silver, or other precious metal as uncirculated coins, so this does not warrant a higher valuation. Despite a fairly complex system of valuation, including rarity, condition, historical significance, and artistic value, what ultimately determines the worth of any coin is how much buyers are willing to pay for it. Doing research and educating oneself prior to jumping into the proof coin buying market cannot be emphasized enough.

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