Basic Terms to Know Before Coin Collecting
The world of coins has its own set of rules, traditions and terms that will seem foreign to those who are just getting started. Here are a few key terms to know before diving into the world of coin collecting:
The amount that a coin is worth above-and-beyond face value is called the Collector Value. This term applies to both old and new coin series. Any currency that was struck by a sovereign government with a denomination of money will always be worth at least that amount within the borders of the country. Collector Value can change, depending on market demands and the changing spot prices of Precious Metals.
The monetary increment that appears within the design of a coin is the Face Value. When collecting coins, the Face Value tends to be lower than the Collector Value. Many types of symbols and characters have been used to indicate Face Value through the years and the amount may appear on the obverse or the reverse of a coin.
FAIR MARKET VALUE
Particularly useful when estimating the price of rare, historical coins, Fair Market Value refers to an amount that both buyer and seller agree is appropriate for a given piece. If there are only a few known examples of a coin available in the world, appraisers will use the Fair Market Value of identical or similar coins to determine worth. For bullion coins produced within the last 30 years or so, a Fair Market price is determined mainly by the going rate of the Precious Metals used.
Coins from a series that are known throughout the numismatic community as bearing the standard of quality for that series are known as Key Coins. Setting the bar regarding value for all other available coins of the same mintage, a key coin is highly prized by collectors. On rare occasions when entire groups of key coins are damaged or discovered, the value of all other coins produced in that series can change.
Even coins that were produced as part of the same series in the same year can have slight differences, and this diversity is known as Minting Variety. Sometimes, a design modification is made to a die during production of a series. Natural wear and tear can also occur on dies that are used for long periods of time. Errors can occur during the striking process that creates abnormalities as well. Mint Varieties can have drastically different numismatic values and for some series are the primary consideration when determining the selling price.
The front side of a coin is known as the obverse. It can be challenging to know which side of a coin is the obverse, and in fact, some dealers will disagree in the absence of an official assignment by the producing mint. In general, if a coin includes the portrait of a person such as a government official, that will define the obverse. Mint year is also known to be used on the obverse of coins.
If a commemorative coin was authorized by a government to support a fund or cause, a surcharge is added that goes directly to that fund. A well-known example is a commemorative series released in honor of George Washington that raised money to preserve his historic home. Once the original surcharge has been paid for by a coin collector, that increment of money is no longer associated with the value of the piece.