Rinker on Collectibles

"I Have a Bunch of Coins..."

I am not a coin expert. Having stated this, I know enough about coins to be dangerous. What follows illustrates this.

When doing “walk through” appraisals, I frequently encounter large collections of coins, both American and foreign. The vast majority, well over eighty percent, are saved from pocket change, i.e., coins that have been circulated.

These coins are often stored loose, in an old wallet or coin purse, in plastic bags, or a box and found in a desk or dresser drawer. In addition, I receive over a dozen coin questions addressed to “Rinker on Collectibles” annually. The following four letters are typical:

“I do not collector coins, except to spend, but my father did some novice collecting. He collected the ‘popular coins’ of the 1950s and 1960s—Indian head pennies, wheat pennies, silver Kennedy halves, walking liberty halves, silver dimes and quarters, and some proof sets. I’m looking for someone I can trust…” – JR, E-mail Question

“I have a bunch of older coins, mostly pennies, some dimes, some foreign. I read on eBay that some coins are certified. What does this mean?” – KB, E-mail Question

“I have two silver pennies from 1943. They are magnetic and in fair to poor condition. What is their value and how do I get them appraised?” – SG, Ypsilanti, MI, E-mail Question

“I know nothing about coins, but found some in my brother-in-law’s things. He must have thought they were worth something. I have nickels as far back as 1940, 1776-1976 quarters, 1966 quarters, and a 1970 Susan B. Anthony dollar. Many seem to have a letter beside the date….I would like to sell them without getting ripped off.” – SL, Altoona, PA, E-mail Question

Whenever I am asked about how to handle groups of coins, I offer this universal advice.

First, I remind the owners that at the very minimum the United States coinage is worth face value, i.e., a penny is worth a penny, a nickel is worth five cents, a dime is worth ten cents, etc. The coinage may not buy what it once did, but it still can buy something.

The same is not necessarily true of foreign coins. Some countries have changed their currency and provided only a limited window of opportunity to exchange the old coinage for newly issued coins. The Euro coins are a modern day example. On February 28, 2002, all the old coinage from countries switching to the Euro was no longer legal tender. Collector value was the only option remaining for the older coinage.

Second, I explain that the amount of time the owner is going to invest in sorting, researching, grading, and selling the coins is going to far exceed the value he is likely to receive from selling the coins. Be prepared, I warn, to work for less than minimum wage. Much to my surprise, my blunt, honest assessment usually falls on deaf ears. The owner is lured into proceeding by the faint hope of discovering hidden treasure, the coin(s) whose sale will put him on easy street or, at the very least, pay for that much needed vacation.

Third, recognizing that my previous advice is likely to be ignored, I advise the owner to sort the coins by country. All coin reference books list coins by country. Put aside those coins whose country of origin cannot easily be determined. Fortunately, most coin reference books offer pictorial guides. The country of most “unknown” coins can be discovered by flipping through these books and finding a picture of the coin in question.

Fourth, once the country sort is complete, start with the United States coins. Divide them into four basic groups: (1) coins having no precious metal melt value, e.g., pennies and nickels, (2) coins made from silver, (3) silverless or clad coins, and (4) gold coins. The Coinage Act of 1965 eliminated the silver from the dime and quarter and reduced the half dollar’s silver content to forty percent. The first silverless half dollar and Eisenhower dollar coins appeared in 1971. Thus, all dimes, quarters, and half dollars minted prior to 1965 and silver dollars minted prior to 1935 have melt value since their silver content is ninety percent. In today’s market, coin dealers and others buying for melt pay nine to ten times face. A pre-1965 dime is worth a minimum of ninety cents to one dollar. Obviously, the current price of gold impacts the value of all gold coins.

I strongly suspect you do not track the value of scrap metals. However, if you did, you would find that the secondary market for used copper is quite high at the moment. Hence, your old copper pennies have melt value. Once again, the key date is 1981. In 1981 Congress changed the composition of pennies from 95% copper and 5% zinc alloy to 97.5% zinc alloy and 2 1/2% copper. The coins look the same, but the new coins are 19% lighter.

Fifth, coins are graded on a scale of 1 to 65, with one the poorest and sixty-five the highest grade. Some sophisticated grading services have increased the scale to 70. For modern coins, i.e., twentieth and twenty-first century coins, investment grade is uncirculated coins grading MS-60 and higher. The highest grade assigned to a circulated coin is AU-58.

Although there are exceptions to every generalization, a good rule is that if a pile of coins was saved from pocket change, face and melt value are far more realistic values than collector value.

Sixth, the next step for the persistent is to obtain a coin price guide and begin researching the coins. Use either David C. Harper’s U.S. Coin Digest: The Complete Guide to Current Market Values (Krause Publications), Thomas E. Hudgeons, Jr.’s The Official Blackbook Price Guide to US Coins (House of Collectibles), or R. S. Yoeman’s Red Book: A Guide to United States Coins (Whitman Publishing). All are available at your local bookstore or public library. KP/Krause Publications, www.krausebooks.com, is the leading U.S. publisher of price guides to foreign coins. Check out the titles by Colin R. Bruce II, George Cuhaj, and Thomas Michael.

When using any of these guides, keep the following in mind. First, all the prices are retail, what you would pay if you wanted to buy the coin from a dealer, not what you would get if you wanted to sell it. Second, read the material in the front of the book and study the grading charts. Once you feel you have properly graded a coin, lower the grade by at least two steps. While grading is as much subjective as objective, amateurs and novices always tend to over grade. There is no need to have twentieth and twenty-first century pocket change coins graded. Third, unless the coin is worth $50 or more, chances are you are not going to be able to sell it to a dealer for much more than a dime to twenty cents on the dollar. This is why you must always keep a coin’s melt value in the back of your mind.

How accurate are coin price guides? The Internet is filled with sites claiming coin guides are self-serving vehicles for coin dealers who are trying to prop the market. I remain neutral. All price guide prices need to be field tested.

Seventh, when researching foreign coins, again keep in mind the precious versus non-precious metal issue. Silver and gold foreign coins also have melt value, albeit the metal content may not equal that of the United States.

Finally, why are you doing all this work? As I stated earlier, chances are strong that you are spending an inordinate amount of time and the end result is that you are far more frustrated now than when you started.

As a result, my best recommendation for dealing with a pile of pocket change is threefold. First, give it to your grandchildren and let them have the joy of researching the coinage. Hopefully, one or more of them will turn into a coin collector. Second, spend all the post-1964 American coinage on yourself. You deserve it. Third, take the pile of coins to a reputable coin auction. Let the auctioneer sort them and offer them for sale. Admittedly, the bulk of the buyers will be dealers, meaning that the auctioneer will sell ninety percent or more of them at wholesale value. If you are lucky, he will find a few coins with collector appeal. The good news is that the auctioneer has done the sorting and all the work, and you have turned a headache into money in your pocket.

Rinker Enterprises and Harry L. Rinker are on the Internet. Check out www.harryrinker.com.

You can listen and participate in WHATCHA GOT?, Harry’s antiques and collectibles radio call-in show, on Sunday mornings between 8:00 AM and 10:00 AM Eastern Time. If you cannot find it on a station in your area, WHATCHA GOT? streams live on the Internet at www.goldenbroadcasters.com.

SELL, KEEP OR TOSS?: HOW TO DOWNSIZE A HOME, SETTLE AND ESTATE, AND APPRAISE PERSONAL PROPERTY (House of Collectibles, an imprint of the Random House Information Group,$16.95), Harry’s latest book, is available at your favorite bookstore and via www.harryrinker.com.

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