There is a big difference between the price of a coin, and the value of a coin. Although you often see these words used interchangeably, it is important that you understand the different concepts represented by each term.
The "Price" of a Coin
This is pretty straightforward. The "price" of a coin is merely the amount that it would sell for on the open market, otherwise known as its "retail price." Coin prices are set by many different factors, including the type and grade of the coin, its rarity and desirability, and to some extent its availability in the marketplace.
The most frequently used price guide to U.S. coins is the Red Book.
A price list is a list of coins from a dealer's inventory that they have for sale at a given price. It is an offer from a dealer to sell your coin at that particular price.
The "Value" of a Coin
Here's where it gets a little complicated. When you want to establish what your coin collection is worth today if you wanted to sell it, you are establishing its value. The amount of money you can sell your coins for (its "value") is significantly less than its purchase "price" if you had to replace your coins by purchasing them from a coin dealer. Dealers need to make a profit to stay in business, so when you go to sell your collection, you're not going to get those nice, high Red Book prices. The Red Book prices are retail amounts.
Consider the Blue Book
These are the average values a coin dealer will offer to pay you for your coin collection. They typically run between 50% and 75% of what the exact same coins would sell for at retail price. Coins which derive most of their value from bullion (such as common-date American Eagles and Double Eagles) will get you more (75% to 85% or so) because most of their value is based on the gold itself, rather than the rarity of the coin.
Appraising Your Collection for Insurance Purposes
The one time when it is correct to use the "price" or retail value to determine what your collection is worth, is when you want to establish its value for insurance purposes. In this case, you want to insure the replacement cost of your coin collection. Since you'd have to pay the Red Book (retail) price to replace them, this is the coin value listing you should use for insurance purposes.
Always be Realistic About Prices and Values
There is nothing more satisfying to a collector than to pluck a coin worth $100 in the Red Book out a dealer's $10 pick bin. And in this case, you've probably done very well, because it's likely the dealer overlooked something here. But the more typical case is finding lots of $20 Red Book priced coins the $10 bin. This is because the dealer is probably overstocked in this material, and would be happy to get his cash back to make more marketable purchases.
Be careful that you don't get carried away thinking you're getting bargains in cases like this, because the amount you can sell the coin for, its value to you, is about what you paid for it. In other words, don't deceive yourself into thinking that the value of a given coin is equivalent to the price you paid for it.
Consider getting yourself a copy of the Blue Book so that you can get a realistic handle on how much you can actually sell your coin collection for today if you really needed to. This book would also be appropriate to use if you need to determine the value of a coin collection that you inherited.
Compare Prices for the Blue Book.
Edited by: James Bucki