Graded Coins Buying Guide

Collecting and grading coins is a popular activity for hobbyists around the world, and it is regarded as one of the oldest collection practices in history. Although collectors have traditionally accumulated coins for a number of reasons, the introduction of grading systems during the 20th century created new initiatives for collectors to seek out coins and to have their own collections appraised for condition and worth. Graded coins offer the promise of monetary value, and seeking out rare coins in excellent condition offers its own rewards. Purchasing graded coins and having one’s own collection appraised by independent grading services establishes a collection as a professional enterprise and demonstrates the coins’ authenticity to viewers and other collectors.

Learn the Basics of Graded Coins

Grading coins is the process of determining the physical condition of a coin. Along with rarity, the grade of a coin is a key factor in determining its value. When buying and selling coins, it is important to have basic knowledge of the grading process and its associated vocabulary, since a small difference in grade can mean a big difference in price. Purchasing publications from top grading services is recommended in order to stay current on the finer points of the hobby and the grading process.

For a coin to be considered a graded item, it must first be submitted to a grading service for inspection. Provided the coin passes inspection, it will be assigned a grade that reflects its physical condition. Having a professional grading service evaluate the condition of a coin legitimizes it in the marketplace, and helps to establish a price for the coin.

Graded Coin Terminology

Coin collectors have a number of terms they regularly use to describe the physical aspects and condition of a coin. The following is a short list of some common terms collectors use when looking at graded coins.

Term	Definition
Obverse side	Commonly known as "heads," obverse refers to the side of the coin that features a head. This side is usually considered the front and is also simply called the "front."
Reverse side	Reverse refers to the side of a coin opposite the obverse side.
Rim	The raised portion of a coin that runs around its outer edge is called the rim.
Blank	A blank is the prepared metal disc of a coin before any markings, including a rim, has been added.
Planchet	Planchet is the name for a blank after it has been given a rim.
Field	Field refers to the portion of a coin that has not been raised during minting.
Relief	Relief refers to the portion of a coin’s design that has been raised from the surface during minting.
Inscription	A coin’s inscription includes all of the letters, numbers, and symbols related to a coin’s production and value. The inscription can be divided into two categories, including legend and motto.
Legend	The legend of a coin is the part of the inscription identifying the place the coin was minted as well as its purpose. On U.S. coins, the legend includes the denomination and the date, as well as the words "United States."
Motto	A motto is a portion of the inscription that holds specific meaning for the people or culture for which it was made. On U.S. currency, the motto includes the words "Liberty," "In God We Trust," and "E Pluribus Unum."
Mint mark	The mint mark indicates the specific mint at which a coin was manufactured. In U.S. currency, the two common mint marks are "D" and "S," for Denver and San Francisco, respectively.
Mint state	Mint state refers to a coin that has never been circulated. The presence of marks or flaws received from processes at the mint does not, by definition, disqualify a coin from being mint.
Contact marks	Contact marks are incurred during processes at the mint, including machine counting, rolling, or transport in a cloth sack.

Assessing the Condition of a Coin

Originally, only three terms were used to describe the condition of a coin: good, fine, and uncirculated. However, as collection practices developed and became more widespread, the need for increasingly sophisticated systems of grading became apparent.

The standard grading scale for U.S. coins is called the Sheldon Scale, and it is named for William Herbert Sheldon, who devised the system in 1948. All American grading services use the system in their evaluation of coins. The Sheldon scale utilizes a 70-point system, and grades can be given at any point between 1 and 70. However, grades are often assessed at specific points along the scale and given adjectives related to their placement. The following chart shows some of the points at which grades are commonly assigned.

Grade	Description
P-1 Poor	A coin that is graded 1 is barely identifiable due to wear, though it must show a date and mint mark.
FR-2 Fair	Coin is worn almost smooth but is less damaged than a 1.
G-4 Good	Inscriptions and rims are worn, and finer details are lost.
VG-8 Very Good	Details of design elements are worn, though identifiable.
F-12 Fine	Wear is even over the surface of the coin, though design elements and rims are apparent.
VF-20 Very Fine	Rims are defined, and several finer details remain, despite apparent wear.
VF-30 Good Very Fine	High points are lightly worn, and details are all apparent.
EF-40 Extremely Fine	Design elements are clear and bold. Light wear.
XF-45 Choice Extremely Fine	Details of the coin are all clear and sharp, with only minor wear on high points. High visual appeal.
AU-50 About Uncirculated	Wear is apparent only on high points of the design, though many contact marks and an overall lack of luster be be present.
AU-58 Very Choice About Uncirculated	Very slight hints of wear. Coin retains its luster and eye appeal.
MS-60 Mint State Basal	No signs of wear or circulation evident, though contact marks from the mint and lack of luster may be apparent.
MS-65 Mint State Choice	Few contact marks and excellent luster. The coin is well-struck.
MS-68 Mint State Premium Quality	Coin has perfect luster with no visible contact marks and is well-struck.
MS-69 Mint State All-But-Perfect	This is a perfectly struck coin with no visible contact marks to the naked eye and excellent luster.
MS-70	A perfect coin, with no visible flaws, even to microscopic inspection up to 8 times zoom.

The Sheldon Scale, though continuous, is actually divided into three separate grading scales that act independently of one another. The three scales are defined by whether or not the coin has been circulated. The following chart shows the Sheldon Scale’s three parts broken down by grade range, 1 through 70.

Grade Range	Description
Grades 1 to 49	Refers to circulated coins only, with 1 representing circulated coins in the worst condition and 49 the best.
Grades 50 to 59	Reserved for coins that may never have been circulated or were circulated briefly but show only light wear.
Grades 60 to 70	60 through 70 Reserved for coins that were never circulated and are therefore referred to as mint.

The level of circulation, and therefore a coin’s placement into one of the three parts, is determined by signs of wear, not the level of luster or presence of contact marks. Mint coins show no evidence of wear but may bear the marks of transportation and processing for distribution. They may also have lost all of their luster.

Once the level of a coin’s circulation has been determined and it is placed within its respective grade range, it is then judged on its physical quality for that type. This results in the potential for an attractive coin to be placed much lower on the scale than a coin that has less visual appeal. For example, a coin graded at 49 may be visually beautiful, but because it shows signs of circulation, it can never move higher on the scale than 49. On the other hand, a coin rated 60 may have lost all of its luster, be poorly struck, and show several contact marks from the mint. No matter how visually unappealing the coin may be, it is technically an uncirculated mint coin and can therefore never move out of the 60 to 70 grade range. It is graded at 60 because it is judged to be in poor condition for an uncirculated coin, whereas a perfect uncirculated coin would be graded at 70.

Coin Grading Services

Grading coins allows others to verify their condition with a minimal amount of personal subjectivity entering the process, which helps to communicate accurate value. In order to ensure that only coins of quality condition are registered, most top graders will not accept coins with problems such as artificial toning, excessive cleaning, environmental damage, major scratches, or flaws in the planchet (the blank piece of metal on which a coin design is stamped). Professional grading services also reject coins that have been altered in any way.

High-quality services use a thorough, multi-step process to determine the condition of a coin. Trained specialists examine each coin based on a number of criteria, and most grading companies have a coin assessed by more than one person. Each step of the process is performed with the goal of accurately and safely grading a coin, after which the coins are typically sealed in protective holders. These sonically sealed containers are marked with labels that delineate their grade and often include certification numbers that are entered into a computer database, validating them for re-entry into the market. In addition to independently certifying and grading coins, many of these services offer a thorough evaluation of recently purchased coins to validate their authenticity.

Proper coin grading requires expert numismatists to compare coins against published references, and the best coin graders have had experience in the commercial sector. Many of them have acted as professional coin dealers. It is not uncommon for grading services to prohibit their graders from actively buying and selling coins in order to ensure there is no conflict in their ability to appropriately grade the items they inspect.

Each grading service has its own philosophy about the fundamental purpose of grading, such as whether it is simply a descriptive tool to communicate the amount of damage sustained after striking, or a ranking system to determine value. They all utilize the 70-point Sheldon Scale and its accompanying descriptive adjectives for the numeric grading of proof coins, business strikes, and many world coins. Although these companies each use the same scale and similar criteria for their assessments, discrepancies may occur between them. This means that each service may grade the same coin differently. Some of the more popular grading services include the Numismatic Guaranty Corporation (NGC), Professional Coin Grading Service (PCGS), American Numismatic Association Certification Service (ANACS), and Independent Coin Grading (ICG).

Buying Graded Coins

When buying graded coins, be sure to look for the mark of an approved grading service in order to ensure the authenticity and condition of an item before purchasing. Many sellers of graded coins, including online services such as eBay, will categorize their coins by the company that graded them. Unique certification numbers provided by grading services can be used to reliably identify coins, whether they stay in a private collection or are circulated in the market. Online marketplaces like eBay allow coin buyers to connect with sellers around the world. Learn how to effectively search eBay for quality graded coins.

Find Graded Coins on eBay

Once a type of graded coin is decided upon, go to the All Categories tab on the eBay home page and click on Coins & Paper Money in the drop-down page. Once there, use the Categories list on the left side of the page to narrow the listings by item type. Selections can be refined further on each page. For example, if US Coins is selected, new search options will appear to the left, including the ability to refine by grade or certification.

From any eBay page, specific search criteria may be entered. For example, to find a circulated, large cent coin, type "circulated large cent" (without quotation marks) into the search box. Visit eBay’s Customer Support pages for more tips on searching with keywords. If keywords are not producing the desired results, try shopping eBay Stores and following the Coins & Paper Money link in Stores Directory. Alternately, inform the eBay community about a desired item by creating a post on Want It Now, or save a search on My eBay, and eBay will send an email when a match becomes available.

Buy Graded Coins With Confidence

Before making a purchase on eBay, be clear on the coin(s) included in the listing. Research sellers and understand how eBay and PayPal protect purchases. Carefully read the details in item listings, and figure delivery costs into the final price. If a coin is an expensive one, be sure the seller will insure it when it ships. If more information is needed, ask a question by clicking the contact link at the bottom of the page.

Always make sure to complete transactions on eBay with a bid or Buy It Now option. Transactions conducted outside of eBay are not covered by eBay protection programs. Never pay for an eBay item using instant cash wire transfer services through Western Union or MoneyGram. These payment methods are unsafe when paying an unknown party. In the unlikely event that an item is not received or is not as described, eBay Buyer Protection will cover the purchase price plus original shipping.

Research the Seller

Research sellers to feel positive and secure about every transaction. Check their feedback scores, as well as the number of transactions they have completed. What percentage of positive responses do they have? What do buyers say in their feedback? Did sellers receive praise? Most top eBay sellers operate like retail stores and have return policies, sometimes including money-back guarantees. Always check the terms and conditions of a transaction before buying.

Questions about a particular listing should be directed to the seller. Experienced sellers will want to satisfy questions in order to encourage buyers to return for future transactions. When a quality seller is found, inquire about an eBay Store, especially if the seller specializes in a favored type of coin. Forging relationships with experienced sellers who use reliable coin grading services can provide increased peace of mind.

Conclusion

Collecting graded coins can turn a personal hobby into a professional ambition, and it offers the potential of building an investment that will pay off later for a collection’s owner. The use of grading services helps to reduce discrepancies between buyer and seller on the condition of a coin and also reduces the chances of fraudulent coins entering the marketplace. Researching sellers and grading processes will allow a buyer to make informed choices and build a collection that can be admired by casual observers and serious collector alike.