Monday, 1 October 2007

Paper Money Collecting: Why Conflicting The Values?

Last week I found a brand new, pristine and uncirculated Canadian paper money note and got very excited, now I could start my Canadian collection, but to my surprise the dealer wanted far more than the note was worth for it. I was upset and asked him if this was a nice way to welcome a new collector into the fold. He got offended but decided to give me a benefit of the doubt as yet again another ignorant new collector. So he sat me down and gave me a lesson on the value of world paper money and how dealers come about their prices. I didn’t get the note in the end as I couldn’t really afford it (it was a high value note). But this experience made me think, and I started seriously looking into how the paper money banknotes are valued.

All collectors both old and new are advised to get a Standard Catalogue of World Money for starters, as a general guide for prices as well as a resource of information about World Paper Money. I found that the catalogues are useful but can usually give conflicting values for paper money in the actual market. It is important to note here, that all serious collectors do need to invest in a catalogue, they are invaluable to a collector though not the definitive value guide for paper money. Now back to the reasons for conflicting values.

Once you start collecting paper money a few reasons become very obvious, no one note even though of the same value is absolutely similar! This is so because for one thing, each note has its own distinct serial number, they may have been printed by a different printing company, or signed by a different official. Each may bring a different price tag along with it.

Another reason for a different price , could be the fact that the catalogues take such a long time to come to print that the information contained are more or less out of date by the time the catalogue is published and hits the bookstore shelf. Unfortunately, the information about the banknotes is rarely changed from one publication to the next, and is riddled with errors such as wrong or missing images and missing date and signature variations, thus making the information provided inaccurate.

One obvious mistake even I have made is to value current notes at their exchange value in today’s market. This is a very unrealistic approach for a dealer. If you are getting uncirculated banknotes you will have to pay premium value for this, also shipping and profit added will not give you face value. One dealer I took on about wanting to make a kill on a note gave me the low down so now I know that paper money collecting is not as straight forward as the catalogues would make you believe, values will differ depending on circumstances.

So the next time you want to get a new note to add to your paper money collection, don’t be too fast to right off your new find as a bargain or a total rip off, there are other factors you need to take into consideration.

Image is of the front side of current Canadian banknotes copyright of the Bank of Canada

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