COIN AND NOTE CONDITION

COIN GRADING

The grading of coins is one of those areas of numismatics that is inevitably somewhat subjective,

and people are often inclined to over grade their coins, particularly when trying to sell them. This

is certainly true of coins seen for sale on the internet, where they are often claimed to be of a

much higher grade than they actually turn out to be. Terms such as “Rare”, “Proof”,

“Uncirculated”, and “Mint Condition” are regularly misused, mostly through ignorance of the

correct meanings of the definitions, but sometimes to mislead less aware buyers. Other terms

sometimes used to describe condition, such as “Superb”, “Excellent”, “Magnificent”, “Collectable”

and other similar adjectives are actually quite meaningless and the buyer is advised to purchase

with extreme caution if such a coin description is not accompanied by a recognised grading.

Consequently, the correct grading of a coin remains the most important factor, alongside rarity,

affecting its value. This note therefore defines and explains the most frequent terms relating to

coin condition used by British numismatists. It is Brushwood policy to use coins graded at

uncirculated or higher in our products wherever possible, and the standard grading system

defined below in descending order of merit is the one we have adopted.

FDC: (Fleur de Coin) a coin in perfect mint state, with no wear, abrasions or marks, and

full lustre. The abbreviation FDC is often used. (This definition is

mostly reserved for coins minted to proof quality, as coins intended

for normal circulation will have been in contact with others during

both the production and distribution processes resulting in minor bag

marks and blemishes.)

Proof: this is not a condition as such, but implies that the coin has been

struck using specially prepared dies with individually polished

blanks, and also that the minting process has been carried out

usually twice under higher pressure to ensure the die is completely

filled. Normally the background fields of a proof coin are highly

polished, with the raised design matt. However proofs where the

whole coin is matt exist, and sometimes the design itself is polished.

A characteristic of all proof coins is that they have very sharp edges

because of the high pressures used to ensure that the metal flows

fully into all details of the design. The Royal Mint has produced

Proof sets regularly for sale every year since 1970, when it issued a

set representing the last £SD coins prior to decimalisation. (The

1970 coins however were not issued into circulation as legal tender,

and so only exist as proofs. There are also a few other years since

decimalisation when certain coins were only ever issued in the proof

sets of that year.)

Brilliant Uncirculated: this implies that the coin still retains its original full mint lustre, with

no toning or tarnish. Often BU or BUNC is used as the abbreviation.

BUNC coins are generally expected to be in FDC condition & since

1982 the Royal Mint has produced individually packaged coin year

sets for sale in perfect BUNC condition, in addition to the limited

edition proof sets produced each year.

Uncirculated (UNC): a coin with no wear at all, although it is possible for the design not to

have been perfectly struck in the minting process. There may also

be small bag abrasions. Coins in this condition are in ‘mint’ condition

although older coins may be tarnished or toned. Sometimes the

abbreviation “aUNC” (about uncirculated) is used to indicate a coin

that is very close to UNC but not quite in perfect condition.

Extremely Fine (EF): slight wear will be noticeable on high spots on close inspection, but

all other detail is clear and sharp. Much mint lustre may remain,

usually around the edges of the raised design and lettering. Coins in

EF condition, for example, will retain almost all detail of the

monarch’s hair styling on the obverse side, and it is this aspect that

often gives away coins that are not truly in EF condition, even if the

reverse appears to be.

Very Fine (VF): most detail on the coin will be clear, but obvious evidence of wear

due to limited circulation will be present. High spots will be worn, but

much underlying detail will remain. Traces of mint lustre may linger

amongst the letters of the inscription. (Coins of lesser condition than

VF are often only worth collecting to fill gaps in collections, unless

they are rare.)

Fine (F): the coin will be worn over whole area, but only the highest spots are

worn completely through and show no underlying detail. For

example, coins showing no detail of the monarch’s hair should not

be graded above fine.

Very Good (VG): considerable wear will be seen over the whole coin, and high spots

will be worn through. Coins in this or lower grades are really only

collectable if extremely rare

Good (G): inscriptions and date will be considerably worn but still legible.

Fair: date and denomination will be legible, and coin type recognizable,

but very little other detail visible

Poor: inscriptions worn off, date is illegible, with only the outline of the

design visible. Such coins are generally of no value to a collector.

NOTE GRADING

Uncirculated (UNC) - refers to a banknote that is bright and has no handling damage, such as folds or creases, nor any cuts, stains, or rounded corners

About uncirculated (AU) - a banknote that is still bright but has trivial handling damage, i.e. a light center fold (not a crease, which is a break of the fibres of the paper), without rounded corners.

Extremely fine (XF or EF) - a banknote with one crease or up to three light folds. Paper still bright and attractive, very slight wear to corners allowed.

Very Fine (VF) - Note still attractive, but possible slight dirt or smudging, may have several horizontal and/or vertical folds. Paper remains relatively crisp. No tears, but slight wear to edges and corners is allowable.

Fine (F) - Paper is now slightly soft, considerable wear due to folds from use in circulation. Minor tears to note, not extending into the design. Clear but not bright in appearance. Staple holes but not holes due to folding.

Very Good (VG) - Much wear. Paper is limp. Tears can extend into the design. Staining possible. Discoloration possible. Hole at center caused by folding allowable. Note still looks presentable.

Good (G) - Very much wear, as VG, but more so. Graffiti on note. Small pieces of the note may be missing

Fair - Larger pieces of note torn off/missing, compared with G. Less of the note intact.

Poor - Severe damage due to wear, staining, missing pieces, graffiti and/or holes. May be taped together, have pieces missing. The worst possible condition.

AUSTRALIAN BANKNOTES GRADING AND CONDITION

The grade or condition of a banknote is a matter of opinion more than an exact science. There are guidelines that are presently used, which have been found to be satisfactory, however as is often the case, there is more than one standard guideline.

One system works on points in grading, starting with 100 for an uncirculated banknote, then deducts 5 points for a crease to a tear etc. The problem is that the position of a dirt stain can make a lot of difference to the value of a banknote. If it is one the obverse side of the banknote for example in the middle of the banknote, this will affect the value dramatically, rather than if in the corner of the banknote.

The most popular system of banknote grading in Australia is one adopted by the British Museum. This grading system starts with Poor which simply means the banknote is severely damaged. The next grade is good, this in actual fact a contradiction of terms, as it actually means the banknote is "bad". Such banknotes are badly damaged; however they qualify as "good" because the printed design is complete. Then comes Very Good, again a misconception, it simply means the banknote is not quite as bad as good.

These first three grades should be avoided by the investor, unless extremely rare banknotes.

A good guide for the investor is to avoid all banknotes under the grade of Fine, which is the next grade. Grades of Fine and above have many things in common, they are appealing, with no severe damage to spoil the look of the banknote.

A banknote that qualifies as Fine will show substantial evidence of circulation, creases, folds and stains-the combined effect of these faults should not detract from the overall appearance of the banknote.

A banknotes that qualifies as Very Fine would be satisfactory to the majority of investors. In this grade the banknote will show obvious signs of circulation, multiple folds etc, is otherwise undamaged and appealing.

A banknote that qualifies as Extra Fine should be, there are some signs of circulation, with up to possibly 6 folds or a heavy centrefold, crease marks etc. It should have a near uncirculated look, have crispness to the touch, and otherwise be undamaged.

A banknote that qualifies as Uncirculated, means simply a perfect banknote in every way, there will be no blemishes, folds, flicks or any use of any kind, "let your eyes be your guide", in any fault whatsoever is seen ,the banknote is not Uncirculated.

Australian catalogues offer detailed definitions of the grading terms they use, and their interpretations. The investor is always advised to study both the catalogue and dealer's sales catalogues carefully.

It will become obvious that personal judgements are never the same, with a number of dealers (however many, may be in the minority) will buy a Very Fine banknote, and upgrade the banknote to an Extra Fine when selling the same banknote. This confusion arises where half grades to describe a banknote, examples being a Very Fine can either be a Good Very Fine+ or near Very Fine. There is nothing wrong with this grading system, if the investor is aware to treat the purchase as a Very Fine, Extra Fine for the purpose of purchase. If the investor decides the banknote is a Very Fine+, with the dealer asking a little more for the banknote, it is a good bargaining point.