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How Best to Use the Red Book When Determining Coin Prices

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How Best to Use the Red Book When Determining Coin Prices

 

Whether you’re new to the field of coin collecting, numismatics or are a grizzled veteran, one thing that is typically top of mind for most folks is the value of their coins. This is especially important if you’ve inherited a coin collection and are trying to maximize the value of the sale of your coins. Your online search of the value of coins has most likely resulted in multiple coin value reference guides, including the “Red Book.” 

2024 red book for coins

The “Guide Book of United States Coins 2024 Spiral “Redbook”, a common guide used in the industry, is not by any means the only resource that you should consider, but it may help in answering some of your questions and narrowing down some of the more valuable coins in your collection. Although, it does have some drawbacks or limitations that most people haven’t considered.

 

In this article, we’re going to share with you some of the positive aspects of the Red Book, as well as its limitations, in hopes that this will help you to successfully sell your coins at the best prices or to arrive at accurate prices for probate, insurance or informational purposes.

Red Book Prices are for Certified Coins

 

We recently met with a customer who brought in a Red Book with his coin collection. He had some uncirculated quarters and some Franklin half dollars that ranged in condition from almost uncirculated to uncirculated condition.

When we sat down with him, he pulled out his Red Book and began to reference some of the mint state or MS prices in the price guide with the expectation that he was going to receive these prices for his coins. For those unfamiliar with the term, “mint state” is another word for “uncirculated.”

We explained to the customer that the various MS prices listed in the Red Book are for certified or professionally graded coins and that they didn’t apply to his coins, as they were raw or ungraded.

Furthermore, some of the coins in his collection weren’t in uncirculated condition, even though they were originally sold as uncirculated coins by the dealer that he purchased them from. This is actually somewhat of a common mistake made by most sellers that are new to the industry. It’s not necessarily anyone’s fault – it’s just a limitation of the guidebook.

Even when coins are certified, there are reasons why you shouldn’t expect to receive Red Book pricing, which we’ll discuss next.

 

Red Book Coin Prices Reflect Retail Coin Prices

 

When coin dealers try to determine how much they may be able to sell a coin for, one resource that they use to arrive at estimated figures is the Red Book. After all, this is a guide that the coin public is familiar with, so if the public sees a coin priced at or near Red Book prices, they’re more likely to believe that the coin is fairly priced.

Considering that the Red Book is a guide used to determine sell rates, it should not be viewed by the public as a resource to determine how much you can expect to receive when you sell your coins. After all, if a coin dealer buys a coin at or near the price at which he or she expects to sell it for, they will quickly go out of business.

One other factor to consider is that the Red Book reflects retail pricing, and not necessarily market pricing.

The two differ in that retail pricing is what a coin dealer hopes to receive for their coin or coins while market pricing is a price that they can realistically expect to receive without a long holding period. They may not be able to flip a coin immediately at market pricing but can feel fairly certain that they will be able to receive this price without too much time and effort.

To sell a coin at market pricing, which is the price that most coin dealers expect to receive, they need to purchase coins at wholesale pricing. Wholesale pricing may be a decent bit less than Red Book pricing. A good rule of thumb to use to estimate wholesale pricing is to use 70% – 80% of greysheet or Blue Book values.

 

Red Book Prices are a Snapshot in Time

Another limitation of the Red Book is that the published prices are a snapshot in time, which may or may not reflect the current market for the coins. Considering that the following year’s Red Book comes out halfway through the year, someone viewing Red Book prices at the end of 2023 may be looking at the retail market for coins one and half years prior.

Needless to say, a lot can happen in 1 ½ years, including substantial changes in the spot price of gold and silver and the strength, or lack thereof of the economy. During a bull or bear market, we’ve seen prices move as much as 50% in an 18-month period. While not the norm, a large movement in a relatively short period of time has been known to happen.

Furthermore, the economy may have been much different when the Red Book was published. The strength of the economy, and in turn, an individual’s discretionary income, can have a considerable impact on the price and demand for certain types of coins. For example, in a recession, most people tighten their belts and limit their purchases to necessities. When people are faced with the option of paying their rent or buying a collectible coin, it’s clear where their priorities lie.

We have seen this personally in the China gold coin market. Demand and pricing was substantially higher six months prior to the time of this writing. At present, China is experiencing an economic decline and a precipitous drop in real estate values, which has drastically impacted the market for these coins.

 

The Red Book Can Help to Identify Better Date or Rare Coins

Thus far, you may be under the impression that we’re not big fans of the Red Book, but that’s not necessarily the case.

In our opinion, the Red Book has some positive aspects, most notably as a way to identify lower mintage coins that may sell at a premium. This can help someone new to the industry identify and set aside these coins so that they’re not valued as if they’re common date bulk coins.

While this may be obvious to some of you, if you’re new to the industry, you may not be aware that the mintage or number of coins produced can have a significant impact on prices. For example, a 1916 Mercury dime produced by the Denver Mint, with a mintage of 264,000 coins, is much more valuable than a 1916 dime struck by the Philadelphia Mint with a mintage of over 22 million coins. In fact, the difference can range from hundreds of dollars to upwards of well over a thousand dollars in higher-end condition.

1916-D Mercury Dime key date

Again, if you’re new to the industry, on the surface, one 1916 dime may look like any other 1916 dime, but there’s a slight difference. The way to identify which mint produced the coin is by a mint mark or the absence of a mint mark. For example, a Denver-issued 1916 Mercury dime has a small “D” on the reverse side of the coin at about 7:00 to the right of the letter “E” in the word “One.” A Philadelphia-issued coin doesn’t contain a mint mark, as the Philadelphia Mint didn’t begin using mint marks until 1942.

Every type of coin has a slightly different location for mint marks, so don’t expect to see a mint mark on a Washington quarter in the same area as a Mercury dime. A simple online search should help you to identify where the mint mark is on your coin, assuming the coin has a mint mark.

 

The Red Book May Be Used for Estate or Insurance Purposes

Two of the most common requests for coin appraisals are for estate or probate purposes or to procure insurance coverage on a coin collection. While most probate courts and insurance companies will require an appraisal from a qualified coin expert, some may permit an individual to provide values from a reputable source, such as the Red Book.

Depending on the probate court, they may request market or retail pricing. Market pricing will most certainly need the services of a coin dealer, but retail pricing (at least a ballpark figure) can be estimated using Red Book values. Don’t necessarily expect this to be the case in your situation, but it may be worth asking the court if this is an option.

In our experience, most insurance companies will also require an estimate from a qualified coin appraiser, but all companies operate differently, so it may not hurt to ask if the Red Book is an acceptable resource for your carrier. When insuring coins or a coin collection, it’s best to obtain replacement cost coverage, which is typically the retail price of your coins.

In other words, your carrier will want to know the coverage limits to offer so that you’ll be able to replace your coin collection in the event that it’s lost, stolen or damaged.

The Red Book can also be used to estimate the retail value of your collection primarily for informational purposes. It’s nice to periodically check on how the value of your investment is doing, and while you shouldn’t expect to receive Red Book pricing when selling your collection, you can see how much the value of your coins has increased from the last edition of the Red Book.

Summary

In conclusion, the Red Book has strengths and weaknesses, which we’ve identified in this article. The grades listed in the Red Book are for certified versus raw coins, so you shouldn’t confuse the values between the two types of coins. Furthermore, considering that the Red Book provides retail pricing, this is not the value you should expect to receive for your coins. Lastly, the Red Book provides a snapshot in time, which may or may not reflect the current retail market when the time comes to sell your coins.

 

On a positive note, the Red Book can be used to identify lower mintage or rare coins that may sell at a higher rate than common date coins. It’s important to check the coins for a mint mark, as the mint that produced the coin, including the number of coins that were produced, will have a direct impact on the coin’s value. A Red Book may also be used for probate, insurance or informational purposes; although, you should always check with the probate court or insurance carrier before assigning arbitrary values to your coins.

We hope that today’s article was helpful in identifying how the Red Book should be used, including its strengths and limitations.

The experts at Atlanta Gold & Coin Buyers are not only competitive buyers of coins and coin collections, but also qualified coin appraisers, so regardless of your need, contact us today to receive accurate pricing and top-notch customer service.

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Tony Davis
Tony Davis is the owner of Atlanta Gold & Coin Buyers, a full service Atlanta based coin and bullion dealer specializing in buying, selling and appraising coins and coin collections of all types and sizes. Tony frequently writes on various economic and numismatic related topics affecting the coin and bullion markets and has been published on some of the industry’s leading websites, including Coin Week, the American Numismatic Association, Coin Collector, Coinflation, and Coin Auctions Help, just to name a few. Visit Atlanta Gold & Coin’s website at atlantagoldandcoin.com to obtain additional information on the products, services and educational resources offered by his company. Tony can be reached at sales@atlantagoldandcoin.com or at 404-236-9744

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