Reprinted from PCGS's 'The Official Guide to Coin Grading and Counterfeit Detection'.

All coins are not created equal. Some come into the world with sharper strikes than others . . . brighter luster . . . greater eye appeal. From a grading standpoint, however, all coins are as perfect as they are ever going to be at the moment of their creation - the very split second they are ejected from the coining dies.

It is all downhill from there; a coin's condition can only decline after that time - or, at best, remain the same. In most cases, in fact, a business-strike coin - the kind produced for use in circulation - loses its state of perfection (if it was truly perfect to begin with) on its very first bounce into the waiting hopper at the mint. Proof coins receive better treatment as a rule, but they, too, are in jeopardy of losing their pristine quality from the moment they leave the coining press.

The world is a cold, cruel place and too many coins end up in the school of hard knocks, shorn of their virginity and suffering wear and tear as they are buffeted about from mint bag to cash drawer to pocket, purse, and cookie jar. It is little wonder then that not many examples survive in top condition, especially in the case of early U.S. coins, whose production occurred at a time when dedicated collectors-people devoted to keeping the coins safe from harm-were few and far between.

Handling and storage play fundamental roles in determining the grade of a coin. That grade depends not so much on how well the coin was made, but rather on how well it was preserved.

The Odds Against Perfection

If someone were waiting to catch a coin in a glove the moment it left the coining dies, there is a chance - although a very slim one - that it might end up in a holder with a grade of Mint State-70 or Proof-70, denoting sheer perfection. The chance is slim because in practice, coins almost always incur imperfections, however slight, at some point in their life and thus fall short of the ultimate grade. More often than not, they begin incurring these flaws at the moment of their birth, precisely because there is not someone waiting to catch them in a glove and lovingly deposit them on a piece of velvet in a climate controlled environment ---or place them, as PCGS does, in a hard, inert, protective plastic holder. On the contrary, even Proofs are frequently mishandled at the mint.

In the real world, business-strike coins begin descending the grading scale almost at once: each tiny contact mark, however imperceptible it may be to the naked eye, pushes a coin down the scale from Mint State-70 to 69 to 68 and so on. And if a blemish is larger and visible without magnification, the push is that much harder and shoves the grade that much farther down the numerical ladder.

Even if a coin is fortunate enough to leave the mint unscathed, it still must run a gauntlet of formidable assaults upon its unblemished nature. If it is a business-strike coin, it will be tossed haphazardly into a canvas sack with hundreds of other coins for a bumpy ride to a bank. Then, after being unloaded amid further jostling, that bag will be flung to the floor in a vault where its contents may shift many times a day. Eventually, the bank may run the coins through a counting machine in order to wrap them in rolls, meanwhile exposing them to further risk of scratches, nicks, and gouges. It is no wonder that the number of flawless coins emerging from this obstacle course is downright infinitesimal.

Preserving Coins

The grade of a coin is a shorthand way of stating its level of preservation. A Mint State designation signifies that a business-strike coin has never entered circulation - never been subjected to the gradual erosion that comes from being passed from hand to hand. The Mint State range is a broad one, however, extending all the way from coins that are stunningly perfect to coins that are flat-out ugly, yet technically bear no evidence of ever having been in circulation. Naturally, those that are perfect - or very nearly perfect - are much more desirable than those that barely qualify as being in mint condition. This, in turn, translates into a higher market value; people will pay a premium - often a very large one - for coins in superior levels of preservation, and this gives collectors a very strong incentive to handle and store their coins with the greatest possible care to protect them from damage and resultant loss of value.

How to Handle a Coin

The first rule of thumb on how to handle a coin is not to place your thumb - or anything else, for that matter - directly on its surfaces. Coins should be gripped only by their edges. The likelihood is great that if you touch the obverse or reverse (the front or back) of a coin, your finger or thumb will leave a permanent mark. The chemicals in your body will react with the metals in the coin, creating potentially disastrous results. That fingerprint or thumbprint may not be obvious at first; it may not show up for months or even years. But when it does appear, it may be impossible to remove, short of causing damage to the surface of the coin in another way.

If at all possible, always keep something soft - perhaps a piece of velvet - underneath a coin while you are holding it. That way, if you drop the coin, it will have a safety net. A hard landing could have dire consequences; a single nick or gouge could send the grade and value of the coin plunging dramatically, even though the original fall may have been just a few feet.

Proof coins have particularly delicate surfaces, and the slightest rub from a finger or other external contact may leave them with "hairlines" - very fine lines that may not be apparent to the unaided eye but that show up all too glaringly under magnification. These lines stand out on Proof coins, precisely because the surfaces of these coins are so flawless to begin with. In many instances, business-strike coins are expected to have such lines, but Proofs by their very nature aspire to perfection. They are made from special planchets, using polished dies, and are usually struck multiple times to give them their exceptional sharpness and detail. Therefore, every flaw, however minute it may be, is that much more readily detectable and detracting.

Slight mishandling of a coin may cause only slight damage - perhaps an almost imperceptible smudge. In that case, the effect on the coin's grade and value may be minor, even negligible. However, if the surface is disturbed more significantly - with hairlines or even slight wear beginning to appear - then the problem is more serious and the coin's grade will undoubtedly be reduced. The impairment may be so serious, in fact, that the coin will no longer qualify for a Mint State grade.

To prove to yourself how readily a Mint State coin can be impaired, take a full-red Lincoln cent from a brand, new late-date roll and rub it just slightly between your fingers. Then look at the coin under a five-power glass. Repeat this process several times. You will be surprised at the damage that can result from such seemingly minor contact. Even the slightest rub can leave hairlines on the surfaces, and these will cause graders - as well as potential purchasers - to view the coin less favorably.

Particular care must be exercised when placing a coin in a holder or removing it for viewing. The sliding plastic inserts used in certain albums can damage a coin's surfaces if the plastic and the metal come into contact; the friction can actually erode the metal's highest points, reducing the coin's grade from Mint State to circulated and, in the process, very likely slashing its market value. Similar friction is possible, with similar loss of value, when taking a coin out of - or placing it back inside - a plastic "flip." A single careless moment can leave a valuable coin with permanent and irreversible damage.

PCGS requests that each coin submitted for grading be placed first in a poly bag - a protective plastic covering and that the bag then be placed in a soft vinyl flip. This enables the graders to remove the coin from its packaging without touching the surfaces. They then place the coin on a velvet pad, where it can be picked up easily by its edge. This affords maximum protection for the surfaces, with little risk of mishandling.

How to Store a Coin

Ideally, coins should be handled as seldom and as little as possible. Frequent handling greatly increases the chance that an accident may occur - that a coin may be dropped, touched with a sweat-soaked finger, or rubbed with a plastic liner while being placed in an album or being removed. Proper storage, however, is every bit as important as proper handling. Coins can be impaired through unsafe storage just as surely as they can be through careless handling. The damage may take place more gradually, and you will not be aware of it right away. However it can be just as lasting and just as costly.

First of all, it is essential that you house your coins in holders that are chemically inert. The hard plastic holders used by PCGS contain no reactive chemicals, thus are entirely safe. Because they are sonically sealed, they also protect their contents from airborne contaminants and other external hazards. All of these qualities make them ideal for use in long-term storage.

Be particularly wary of soft plastic flips made with the substance polyvinyl chloride (PVC, for short). This compound is unstable and tends to break down over time, releasing harmful chemicals that actually may attack the surfaces of your coins, eating away at the metal and leaving unsightly scars. Many unfortunate hobbyists have learned this chemistry lesson the hard way - by opening their safe deposit boxes after months or years to discover that some of their coins were basically ruined.

At times, the safe deposit box itself may contribute to coins' deterioration. Ironically, this risk is likely to be greater in high-rent districts - banks where the box rental fee is higher than usual because special efforts are made to enhance the environment in the vault. Typically, this "enhancement" takes the form of increasing the humidity of the air. Banks do this because mortgages, wills, and other paper documents - the kinds of items generally found in safe deposit boxes - tend to grow brittle when the air is dry. But moisture is a coin's enemy: water serves as a catalyst for chemical reactions on coins' surfaces. Therefore, it is advisable to store your coins in a bank where the vault is not moisturized - and normally, that will be a bank with cheaper box rates.

Frequently, copper coins are kept in cloth pouches. These are basically inert and will cause little toning, but they also offer minimal protection. Two-by-two cardboard holders are unsatisfactory, too; flecks of the cardboard often come to rest on the surfaces of the coins being housed in these crude holders, setting the stage for chemical reactions that can leave the coins permanently spotted. Also, as a rule, these holders are sealed with staples, which can easily scratch a coin during its removal.

Simple folders with cutout holes may be satisfactory for circulated coins of no great value. But they certainly should not be used for Mint State coins or any coins worth more than a few dollars. The paper behind the slots contains reactive chemicals that will darken an untoned coin on the side placed against it, and the visible side of a coin housed in such a holder has little or no protection from the elements. Album-type holders are better than basic folders; at least the coins are covered on both sides. However, as we have seen, the sliding plastic liners typically found above and below the coins in many popular albums pose a threat of damaging the coins through inadvertent friction during the coins' insertion and removal. The hard plastic may touch the coins' high points as it is slid into place and may leave "slide marks" or hairlines.

Furthermore, inserting coins into these albums can be just as hazardous as with the rudimentary push-in folders, since the fingers are just as likely to touch their surfaces.