The first minted coin was made in 600BC. The first counterfeited coin was made not long after that. As the production of coins has advanced, so too have counterfeit methods.
Counterfeit coins aren’t a widespread issue, but it is a topic of concern, either as a collector of collectible coins or a bullion coin investor. No one wants to discover that the coin they purchased has much less value than initially thought and often little to no value. It can even affect you in your day-to-day life handling currency coins, as shown in the recent seizure of 10,000 fake toonies.
One of the best ways to combat counterfeits is to be aware of them and educate yourself. Doing research for bullion products can help you to be more aware and have more confidence. It may even allow you to spot counterfeits in your currency coins, which is why we've put together a guide to counterfeit coins.
Here, we cover everything from the different ways counterfeit coins are made, to how to identify authentic gold and silver coins, how to spot counterfeits, and what to do about them.
How Counterfeit Coins are Made
Just as there are different kinds of coins – numismatic coins and bullion coins – there are different forms of counterfeits, but ultimately their purpose is to replicate a valuable coin typically only minted by a country or to modify a regular coin to make it look more expensive than it is. The ultimate goal is to pass the fake coins as legitimate.
In order to understand how to identify counterfeit coins, it's helpful to know how counterfeits are made. There are three methods in particular for producing counterfeit coins.
Struck
The process of making struck counterfeits involves striking them from stolen or forged dies. It is similar to how coins are produced by mint manufacturers resulting in hard-to-detect counterfeit coins.
A planchet (a metal disk from which a coin is made) is placed between two coin dies attached to a coining press. The coin dies are pressed against each other, which casts the planchet with the mould created by the two coin dies. The coin dies can be created using different methods, all of which can result in a highly deceptive counterfeit coin. However, it is the most expensive method and is a tedious process, so it is usually only used for the rarest and most valuable coins
Cast
Another method of counterfeiting involves casting them in moulds – this is one of the easiest and cheapest methods. A casted mould is made of an authentic coin and the moulds are filled with a mixture of liquid metal.
Counterfeit coin producers like this method because of the relative ease as the authentic coin is used to create exact replicas without risking damage to the original coin in the process. Different metals are used in the process to create a close enough match to the surface colour of the original authentic coin.
Despite the ease of this process, the counterfeits produced are of low quality and more easily detected.
Altered
Altering or doctoring coins is the cheapest and quickest method to make money. It involves taking an existing coin of lesser value and altering it to pass as a rare coin of higher value. It can be done in two ways.
A counterfeiter makes minor adjustments to the surface of a common coin to give it the appearance of a coin that is worth more. This is done by making small engravings and etchings, or in some cases removing small details, to deceive a buyer.
The other method is referred to as coin splitting. A counterfeiter splits two coins in half and glues or solders the two halves together. It doesn't sound like an effective process, but it gives the impression of a rare coin, and there are some expensive coins that can be replicated with this method.
How to Identify Counterfeit Coins
While some counterfeits are better than others, the good news is that there are various ways to identify counterfeit coins based on the different parts of a coin.
The first thing to look at with gold and silver bullion coins, and numismatic coins, too, is their markings. There should always be markings from its minting, so if your coin is missing this, it's a cause for concern. There will be markings for weight, purity, serial numbers, mintage year and denomination. You can compare these markings with an image of an authentic coin, looking for any inconsistencies.
Edge finishes and reliefs are other identifying features due to the difficulty in replicating them. Every design has a specific edge finish and can be smooth, include lettering or have ridges. Find out the edge finishes that are distinct from that design and compare. The relief is the height of the coin's images compared to the coin's surface, and counterfeiters have difficulties replicating this. With authentic coins, the relief allows for neat stacking, but with counterfeits, the coins typically have reliefs that are too high or low and either can't be stacked properly or can't be distinguished from the coin's surface.
Most bullion coins have the weight inscribed on them. To test this, simply weigh it to check that it matches the inscription using an accurate scale. There should be no discrepancy between these numbers. You can also purchase a caliper to measure the dimensions of your bullion and obtain the regulated measurements for the bullion coin. A caliper is needed to get the most precise measurement possible, as a ruler or measuring tape won't work.
Another test to identify gold and silver coins is checking for magnetism. As both of these metals are non-magnetic, this will allow you to determine whether the metal composition is pure or an alloy. Whether you want to verify your gold bullion or special edition silver coins, simply use a small magnet and hover it above your bullion coins to see if they attract.
There are other tests you can do, but be sure to avoid anything that could damage the coin. Any tests requiring indenting, scraping or dropping could cause damage and decrease their value.
What to Do About Counterfeit Coins
If you do discover a coin you've acquired is counterfeit, do not try to sell it to someone else, as this would be a crime. If you purchased through a reputable dealer, notify them of your suspicions, and they will likely offer a refund. If you did not purchase through a reputable dealer and the seller intended to scam you, report it to the local police.
While it's worth it to educate yourself so you can identify a counterfeit coin, the best way to avoid purchasing a fake coin is to purchase it from reputable sellers. Whether you're interested in bullion or numismatic coins, there are sellers who have earned their reputations for selling authentic and quality products.
Buy From Reputable Dealers
The absolute best way to make sure you're purchasing quality products is to buy from a reputable dealer. When you buy from unknown sellers, there's no way to do research or verify their reputation. In addition to being able to answer common questions about bullion, reputable dealers will have policies in place to prevent counterfeits.
One of the world's most reputable coins is the Canadian Maple Leaf. It's internationally recognized for the high gold purity and security measures that include an easy-to-use authentication system for Royal Canadian Mint Gold and Silver Maple Leaf bullion coins.
Security features include radial lines specific to each coin, security marks visible only under magnification and Bullion DNA, used to authenticate Gold Maple Leaf coins dated 2014 and later and Silver Maple leaf coins dated 2015 and later. The technology can be used to authenticate Royal Canadian Mint bullion onsite at authorized dealers.
In fact, a survey conducted by the U.S.-based Anti-Counterfeiting Task Force named the Gold Maple Leaf among the most frequently counterfeited gold bullion coins. Dealers were reporting attempts by customers to sell them counterfeit coins. However, these attempts were unsuccessful because dealers were able to spot the fakes, indicating the security features are effective.
There's no substitute for buying from a reputable dealer, and it's often best to buy your coins and bullion from the same place. This way, you can establish a relationship with a dealer, which has many benefits. Having an ongoing relationship and conversation with bullion dealers is often helpful as they will be more likely to offer better pricing or let you know about new products.
For more than 10 years, Global Bullion Suppliers has been a trusted name and bullion dealer. The majority of the products we sell come directly from a supplier that deals with each respective mint, including the Royal Canadian Mint, US Mint, PAMP Suisse, Credit Suisse, Royal Mint, Austrian Mint, Australian Mint, South African Mint, Mexican Mint and more.
We also sell ‘pre-owned’ products that we have purchased from the general public or a supplier with a sale on more generic products. Every one of these products goes through an x-ray analysis and internal verification process to ensure the products meet bullion standard and are genuine.
The existence of counterfeit coins shouldn't be a deterrent to collecting coins or investing in bullion. Our tips should be helpful in identifying and avoiding counterfeit coins. If you’re unsure whether bullion coins are the right product for you, explore alternatives to bullion coins that might be a better match for you and your goals.