In coin collecting, the condition of a coin is paramount to its value; a high-quality example is often worth many times more than a poor example. Collectors have created systems to describe the overall condition of coins. One older system describes a coin as falling within a range from "poor" to "uncirculated". The newer Sheldon system, used primarily in the US, has been adopted by the American Numismatic Association. It uses a 1–70 numbering scale, where 70 represents a perfect specimen and 1 represents a barely identifiable coin.
The generally accepted scale of adjectival descriptions and numeric grades for coins (from highest to lowest) is as follows:[5]
- Mint State (MS) 60–70: Uncirculated
- About/Almost Uncirculated (AU) 50, 53, 55, 58
- Extremely Fine (XF or EF) 40, 45
- Very Fine (VF) 20, 25, 30, 35
- Fine (F) 12, 15
- Very Good (VG) 8, 10
- Good (G) 4, 6
- About Good (AG) 3
- Fair (FA, FR) 2
- Poor (PR, PO) 1
Several coin grading services will grade and encapsulate coins in a labeled, air-tight plastic holder. This process is commonly known as coin slabbing and is most prevalent in the US market. Two highly respected grading services are the Numismatic Guaranty Corporation (NGC) and the Professional Coin Grading Service (PCGS). However, professional grading services are the subject of controversy because grading is subjective; coins may receive different grades by different services or even upon resubmission to the same service. Due to potentially large differences in value over slight differences in a coin's condition, some commercial coin dealers will repeatedly resubmit a coin to a grading service in the hope of a higher grade. The grading services came into being (PCGS being first) in an effort to bring more safety to investors in rare coins. While they have reduced the number of counterfeits foisted upon investors and have improved matters substantially, the goal of creating a sight-unseen market for coins remains somewhat elusive.
Damage of any sort (e.g. holes, edge dents, repairs, cleaning, re-engraving or gouges) can substantially reduce the value of a coin. Specimens are occasionally cleaned or polished in an attempt to pass them off as higher grades or as uncirculated strikes. Because of the substantially lower prices for cleaned or damaged coins, some specialize in their collection.
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