We received a phone call last week from a gentleman who inherited a large and diverse coin collection from his grandfather. His plan was to take the entire collection to NGC or PCGS to have the coins certified. He indicated that he spent considerable time researching the coins and saw some dramatic price differences between certified coins and raw or ungraded coins. While in some instances this is the case, oftentimes the additional benefit derived from having a coin professionally graded or certified doesn’t offset the expense in doing so. As a coin dealer that purchases hundreds of thousands of coins a year, and submits hundreds to be certified, we feel qualified to comment as to when you’ll likely see increased value from certified coins. Below we’ll discuss several different types of coins that are frequently represented in coin collections and which of the coins you should consider submitting to NGC or PCGS to have certified.
Common Date Coins
Most coins that we evaluate as part of an estate coin collection are common date coins. This means that there was a substantial quantity of coins produced in a year. While common date coins imply that the coins have limited value, this isn’t always the case. In fact, some of these coins can have significant value; especially if they’re obsolete currency, such as denomination coins that are no longer used in general circulation, or if they’re older date silver dollars (minted prior to 1878). More times than not, it’s not worth the expense to have common date coins certified by PCGS or NGC; especially if they’re in average condition. Common date coins in high end condition may be a different story, which we’ll discuss next.
Uncirculated Common Date Coins
Coins that are common date, but in uncirculated condition should be evaluated for certification purposes. Most uncirculated coins that we see are more recently issued coins, such as Lincoln memorial cents, Jefferson nickels, Roosevelt dimes, Washington quarters, Kennedy half dollars and modern issued silver dollars. In other words, these are coins that are currently being used in general circulation. In most cases, the additional benefit derived from having these coins certified doesn’t outweigh the expense. However, uncirculated coins that were minted prior to the coinage that circulates today, such as Indian Head pennies, Buffalo nickels, Mercury dimes, Standing Liberty quarters, Franklin half dollars and Walking Liberty halves, may see a significant increase in value when certified; especially if they are in choice uncirculated condition. The same holds true with Type coins, which are commonly defined as coins minted prior to 1916. We’ll discuss type coins in further detail below.
As we touched on above, type coins are commonly defined as U.S. coins produced in 1915 and earlier. These coins are typically common date coins and were produced at a time when collectors focused on assembling a collection consisting of a coin from every year without regard to the mint or mint mark. Because type coins are common date coins, most of them don’t have significant value as raw or graded coins. However, the same doesn’t hold true if they’re in higher end condition. Additionally, older type coins, such as those produced in the mid 1800’s or earlier, obsolete currency and silver dollars produced prior to 1878 can oftentimes benefit from being professionally graded.
Rare or Key Date Coins
All rare, low mintage or key date coins (typically mintages of under a million coins) should be evaluated individually for submission to a third-party grading service. Some extremely low mintage key date coins (under 100,000), can benefit from being certified by PCGS or NGC, even if they’re in circulated condition. Additionally, coins that are commonly counterfeited, such as 1877 Indian Head pennies or three-legged buffalo nickels, will become more marketable when certified. These coins can be difficult to find in any condition and are in high demand by collectors who are interested in completing their sets. In nearly all situations, key date coins in uncirculated condition are worth having professionally graded; especially if you have multiple coins to submit. This will help to reduce the price that you pay per coin, when factoring in shipping and insurance expenses. Professionally graded key date coins also remove subjectivity with respect to the grade of the coin. In some cases, a grade or two difference can translate into a substantial difference in the value of your coins.
If you’ve studied the guidelines in this article and believe that you have good candidates to submit to NGC or PCGS, we recommend that you first inspect the coins to determine if they’ve been altered or have evidence of damage. We wrote an article a few years ago on factors that affect the value of silver dollars, which can apply to just about any coin. Other issues not specifically addressed in our previous article include environmental damage from improperly stored coins, PVC damage, which is caused from a chemical breakdown in the plastic coin holder, and damage from coins being used as jewelry, such as edge scratches and dents from prongs. We recommend that you closely inspect your coins (front and back) with a triplet loupe to determine if your coin has any of the issues noted above or in our previous article. Coins that have damage or have been altered will usually be accessed a qualifier and a detail rating as opposed to an actual grade.
At the end of the day, you’re looking for a positive ROI when submitting a coin for professional grading. The cost of grading, shipping, insurance, the turnaround time, and the chance that your coin won’t grade out as expected should all be factored in to your overall expense. Additionally, if you’re not a member of NGC or PCGS, you’ll need to pay a coin dealer a fee to submit the coin(s) on your behalf. For most people, this means that the value of your professionally graded coin will need to increase by $50 or more just to break even. The foregoing is why we only submit a fraction of the coins that we purchase for third party grading. We share this information not to dissuade you from taking this course of action; it’s merely to share with you factors that should be taken into consideration before having your coins professionally graded.
In summary, there are a few factors to take into consideration when deciding if you should submit coins to a third-party grading service, such as NGC or PCGS. Do you have common date average condition coins? If so, these coins typically aren’t worth submitting. How about uncirculated examples of coinage that circulates today? Generally, not, but uncirculated examples of coinage produced prior to the type of coins circulated today should be considered candidates. What about type coins? If in uncirculated condition, or if they meet the criteria that we discussed above, they may be worth submitting. Rare or key date coins should always be evaluated for submission purposes; especially if in uncirculated condition. Lastly, be sure to inspect your coins for any evidence of damage or alteration. Third party grading companies may not certify these coins depending on the extent of the damage. Even if they do, they’ll be accessed a detail grade with a qualifier. Finally, run a cost benefit analysis to determine if the additional benefit of having a coin certified will outweigh the cost to do so. The breakeven point is typically $50 or more, so be cognizant of these expenses prior to making your decision.