How to Value "Problem Coins"
As a general rule, collectible United States coins are expected to be devoid of major flaws, blemishes, alterations or unnatural characteristics. Normal wear, toning and handling marks are to be expected—these are all natural occurrences and are considered “par for the course.” However, extreme damage beyond the norm will drastically reduce a coin’s value. Pieces exhibiting major issues are often dubbed “problem coins” and trade for substantial discounts. This article will review some of the major types of problem coins and how they are valued.
Perhaps the most common “problem” found on coins is harsh cleaning. While gentle restoration like dipping is considered acceptable, more abrasive methods like polishing and wire brushing is frowned upon. The difference is that dipping leaves a coin’s surfaces largely intact, while the abrasive techniques essentially destroy the coin’s luster and appearance.
Surface damage is another commonly encountered problem. Normal marks from circulation are tolerated and accepted, but giant gouges and deliberate damage are not. For example, double eagles usually exhibit “bag marks” from coming into contact with other coins while stored in canvas bags. Such incidental marks are to be expected. However, if a coin has an initial engraved into it, numismatists will consider the piece damaged.
Environmental damage and corrosion are also common problems, especially for reactive metals like copper and aluminum. Numismatists do not penalize copper coins for losing their original color and turning brown, but green oxidization is considered highly undesirable. Rough, porous surfaces are also viewed as a negative.
Unnatural alterations—especially those meant to deceive collectors—are also viewed with disdain. Coins that have been re-engraved, artificially enhanced and unnaturally re-toned trade for an extreme discount. If a coin is fraudulently altered (e.g. with an added mintmark) it is treated like a counterfeit and completely rejected by the marketplace.
Except for fraudulently altered pieces, most problem coins still have value. Their market prices, however, are somewhat difficult to determine. There is no exact or precise way of valuing coins with problems; it is more of an art than a science. If a coin’s fault is barely detectable or only slightly detracts from its appearance, the negative impact on value will be moderate. A coin that would normally grade AU 50 with a minor cleaning might carry the market value of a XF 40. However, that same coin with severely damaged surfaces or an intense polishing might command the market value of a VF 20 or F 12. The biggest determinant is eye appeal—the more noticeable the problem the more a coin’s value is reduced.