Coin grading standards

Coins cannot always be graded according to specific rules. There are many factors that influence the price and value of a coin, resulting in the approximately 60 different grading methods that exist. Grading does however provide an important set of benchmarks, that facilitate collectors' and purchasers' assessment of a coin's quality. It is important to assess the condition of a coin because the value of the coin is affected by the grade. If the coin has been in some form of jewellery it loses quite a bit of value. Rims, nicks, polishing and scratches are all important details that are considered in grading coins. Keep in mind that grade is only someone's opinion. Until you are comfortable with your ability to grade coins, make liberal use of other opinions, such as those available with slabbed coins or from experienced collectors and dealers you trust.

In the early years of coin collecting, three general terms were used to describe a coin's grade:

  •  Good  Where details were visible but circulation had worn the surface
  •  Fine  Features were less worn from circulation and a bit of the mint luster showed on the surfaces
  •  Uncirculated  Details were sharp and there was a luster approaching the state of the coin at the mint, prior to general circulation

As the collector market for coins grew rapidly in the late 1800s and early 1900s, it became apparent that a more precise grading standard was needed. Some coins were simply more fine than others, and some uncirculated coins showed more luster and far fewer marks than others. Terms like "gem uncirculated" and "very fine" began to see use, as more precise grading descriptions allowed for more precise pricing for the booming collector market. In 1948, a well-known numismatist by the name of Dr. William Sheldon attempted to standardized coin grading by proposing what is now known as the Sheldon Scale.

His scale, included in his famous work "Penny Whimsy", was originally devised specifically for United States large cents, but it is now applied to all series. The scale runs from 0 to 70, where 0 means that you can pretty much tell that it was once a coin while 70 means that it is perfect. Note that 60 is uncirculated, what the general public would consider perfect, with no wear whatsoever. There is a direct mapping from this scale to the older descriptive terms, but they are not always used the same.

The Sheldon Scale was a vast improvement over grades such as Good and Fine, although there is still substantial room for disagreement among two parties based on subjective opinion. If you have absolutely no idea how to grade coins, you have no business buying coins without help. If you do not know how to grade coins for yourself, you will eventually learn, and it could very well be an expensive lesson. When selling coins, you don't have as much of a problem. Simply take the coins to a couple of different dealers and get their opinions as to the grade. Always ask for the grade opinion before asking for a price as it can help in negotiating a fair price.