How Much Do Coin Dealers Pay for Silver?

Understanding how coin dealers determine their offers is an important first step when selling silver. Dealers assess various characteristics of your silver items to arrive at a fair price. This article clarifies the valuation process, providing insights into the factors that influence what a dealer will pay.

Types of Silver

Silver items brought to a dealer typically fall into distinct categories, each valued differently.
Bullion silver includes coins, bars, and rounds, primarily valued for their silver content and weight. Examples are American Silver Eagles or Canadian Maple Leafs, recognized for their high purity and traded close to the market price of silver.
Numismatic coins are collectible silver coins whose value extends beyond their metal content. Their worth is influenced by factors such as rarity, historical significance, mint mark, and overall condition. These coins, like an 1878 Morgan Silver Dollar, might command prices significantly higher than their melt value due to collector demand.
“Junk silver” or “scrap silver” includes items like pre-1965 U.S. dimes, quarters, and half-dollars, as well as broken jewelry or sterling silver flatware. These items are valued almost entirely based on their silver content, often referred to as melt value.

Factors Influencing Dealer Payments

Several factors determine the price a coin dealer offers for silver.
The “spot price” of silver is the current market value for one troy ounce of pure silver for immediate delivery, fluctuating continuously based on global supply and demand.
The purity, or fineness, of the silver is another factor. Silver content is measured in parts per thousand or as a percentage, such as .999 for fine silver, .925 for sterling silver, or 90% for pre-1965 U.S. coinage. Higher purity means more actual silver content, directly increasing the melt value. Purity markings, or hallmarks, are often stamped on the silver.
Accurate weight is also essential, typically measured in troy ounces or grams. A troy ounce, used specifically for precious metals, is slightly heavier than the more common avoirdupois ounce used for everyday measurements. Dealers use precise scales to determine the exact weight.
For numismatic coins, value extends beyond the melt price. Rarity, the coin’s condition (often determined by professional grading standards), and historical significance can significantly increase its worth. Dealers consider these attributes carefully.
The dealer’s spread or margin accounts for their operational costs and profit. Dealers purchase silver below the spot price and sell it above, with this difference covering expenses like testing, storage, insurance, and business overhead. This margin typically ranges from 5% to 20% below the spot price for bullion items, while numismatic coins may have different margins based on their collector market.

Estimating Your Silver’s Value

Before visiting a coin dealer, you can make a preliminary estimate of your silver’s worth.
Begin by finding the current spot price of silver, which is readily available on financial news websites or precious metals dealer platforms.
Next, determine the purity of your silver item. Many items have hallmarks or stamps indicating their fineness, such as “925” for sterling silver or “999” for fine silver. For pre-1965 U.S. coinage, the silver content is generally 90%.
Weigh your silver, ideally using a digital scale that can measure in grams or troy ounces. Precious metals are typically weighed in troy ounces, which are heavier than standard ounces.
To estimate the melt value, multiply the item’s weight in troy ounces by its purity percentage (e.g., 0.925 for sterling) and then by the current spot price. For example, a one-troy-ounce sterling silver item at a $25 spot price would have a melt value of $25 x 0.925 = $23.125. For potential numismatic coins, research similar sold items online or consult coin guides to gauge any added collector value.
Anticipate that a dealer will offer less than your calculated melt value due to their necessary profit margin.

The Selling Process to a Coin Dealer

When selling silver to a coin dealer, gather your items and, if possible, separate them by type, such as bullion, numismatic coins, or scrap. Having a rough estimate of your silver’s value provides a useful reference point during discussions. It is advisable to bring a government-issued identification, as transactions exceeding certain monetary thresholds may require it for reporting purposes.
Upon arrival, the dealer will typically examine your silver. They will verify purity through methods like acid tests or X-ray fluorescence (XRF) machines. The items will then be accurately weighed using calibrated scales. For coins with potential numismatic value, the dealer will carefully assess their condition, rarity, and market demand to determine any premium beyond their melt value.
After their assessment, the dealer will present an offer based on the current spot price, the silver’s purity and weight, and any numismatic value, minus their operating margin. If the offer is accepted, payment methods commonly include cash, check, or bank transfer.
For substantial sales, particularly those involving certain types and quantities of bullion, dealers are required to report the transaction to the Internal Revenue Service (IRS) on Form 1099-B. This applies to sales of .999 fine silver bars totaling 5,000 troy ounces or more, or 90% U.S. coins with a total face value exceeding $1,000. It is often beneficial to obtain multiple offers from different reputable dealers to ensure you are receiving a competitive price for your silver.