Refresher Course

Your stamp collection: 'How much is it worth?'

By Janet Klug

"How much is it worth?" The question seems to follow stamp collectors wherever they go.

Figure 1. How much is a mint United States 2¢ Black Jack stamp worth? How much are you willing to pay?
 
Figure 2. If this complete set of Tongan stamps, Scott 100-13, were missing one low-value stamp, the set's value would decline much more than the 20¢ catalog value of the missing stamp because the set would be incomplete. Click on image to enlarge.
 
Figure 3. Supply and demand can trump condition. Few collectors would exclude the cut-to-shape but unique British Guiana Penny Magenta from their collections.
 
Figure 4. Popularity plays a role in determining stamp values. Collecting covers bearing stamps of the U.S. Presidential series of the 1930s is a very popular field today. Collecting the plate blocks, such as this 30¢ deep ultramarine Theodore Roosevelt plate number block, is not so popular. Click on image to enlarge.

Perhaps you have just hinged the last stamp needed to complete a page in one of your albums. It was a lucky find in a dealer's stock book. You paid 75¢ for it, even though catalog value is only 25¢, because it had proven to be a difficult stamp to find.

You paid more than catalog value for the stamp, so how much is it really worth?

Perhaps you are looking for a 2¢ black Andrew Jackson stamp, United States Scott 73, shown in Figure 1. The popular black stamp, nicknamed the "Black Jack," features a somber portrait of the president.

The stamp has a catalog value of $375 mint and $50 used, but you have seen them priced between $10 and $500. You purchase an unused one for $200. How much is it worth?

You have a set of stamps issued by Tonga in 1953, Scott 100-13. The complete set is shown in Figure 2.

Well, actually the set that you have isn't complete. One of the low-value stamps, the 2-penny black and aqua Canoe and Schooners stamp, Scott 102, is missing. But all the high-value stamps that account for most of the catalog value are there.

The set has a Scott catalog value of $28.20 in mint condition. The missing stamp only catalogs 20¢, the minimum value. So how much is the set worth?

Recently I was ogling a new auction catalog that had just arrived. There was a spectacular Australian cover illustrated on the front page, and I mentioned to my husband in passing that he could buy it for me for Valentine's Day.

I knew full well that the purchase of the cover would be completely out of the realm of possibilities.

"How much is it worth?" he asked. I looked at the estimate in the auction catalog and told him the estimated price was well into six figures. He has been living with a collector long enough to know the next important question: "Yes, but how much will it sell for?"

And that is the problem. It is difficult to convey to non-collectors and to some who do collect that the value of a stamp is measured differently depending on whether you are the buyer or if you are the seller.

Stamp values also depend on many variables that can play a part in establishing true worth. Let's look at a few of those variables.

First is the law of supply and demand. If you ever took a business course, one of the first lessons you learned was that goods are priced according to the law of supply and demand. It applies to the stamp business just as it does in all others.

If the supply exceeds the demand, the price usually will decrease. If the demand exceeds supply, prices normally rise. When supply and demand are equal, price is established by how motivated a seller is to sell the goods, the cost of doing business and the ability of the marketplace to purchase the goods.

This applies to stamps and covers as well as to other types of goods, but with one difference. Stamps are not an essential purchase, so demand is really the key variable.

Next come grade and condition. Supply and demand are better known market variables, but for all kinds of collectibles grade and condition are sovereign.

Grade refers to how well a stamp is centered.

The introduction to the Scott catalog gives clear definitions and illustrations of stamps in grades of fine-very fine, very fine and extremely fine. No collector should begin buying stamps until he has a firm grasp of how stamps are graded.

Scott catalog values are for stamps in the grade of very fine. Stamps that are poorly centered (have perforations cutting well into the design), have average centering (perforations touch the design), or have fine centering (stamps that are noticeably off-center on two sides) are worth only fractions of their Scott catalog values.

Stamps in the grade of very fine (almost on-center on one side or slightly off-center on two sides) can be expected to sell at retail for about catalog value.

Stamps in the grade of extremely fine (close to perfectly centered) can be expected to bring more than catalog value at retail.

Grade is mostly an issue in stamps of the classic period. Given modern production capabilities, most modern stamps should be expected to be fine-very fine or better. There is no noticeable demand or market for modern stamps that are not well-centered. The time-honored advice about buying the best grade of stamp that you can afford remains valid.

Condition refers to the physical state of the stamp. Common stamps in damaged condition will have no resale value except perhaps as recyclable paper.

A stamp that has tears or scuffing; is cut-to-shape; is soiled, stained or faded; is creased, thinned, or has missing or damaged perforations is a damaged stamp.

Additionally, if unused, a stamp should have original gum. Many collectors will pay a premium for stamps that have not been hinged.

Used stamps in general should be lightly canceled.

But supply and demand can trump condition.

The 1¢ black-on-magenta- paper British Guiana stamp, Scott 13, shown in Figure 3, has been cut to shape and is scuffed. However, few collectors would be unwilling to add it to their collection, if they were able to, because it is the only example known to exist. Its history makes it desirable.

With covers, condition usually means looking for those that are not faded, torn, stained, folded or otherwise damaged.

Cancels on covers mostly should be neat and readable and should tie the stamps to the envelopes.

Of course, there are exceptions. Crash covers, redirected and returned mail, or covers that have been subjected to other than ordinary mailing conditions are expected to show the stress of their journeys. They usually are more collectible for the signs of what they have endured.

Popularity of a collecting area must be factored in. So should whimsy and fad.

Some stamps, countries and time periods are more popular with collectors than others. Popularity of collecting areas waxes and wanes just as it does in all other areas of taste and preference.

For example, collecting covers bearing stamps of the U.S. Presidential definitive series of the 1930s has been popular for years. Collecting the plate blocks of the Presidential stamps, such as the 30¢ deep ultramarine Theodore Roosevelt plate number block, shown here, is not so popular.

The popularity of Presidential covers has caused prices of such material to rise dramatically. Much of this highly prized collecting area was dirt cheap only 15 or so years ago.

The popularity variable can work to the advantage of budget-minded collectors.

You can get more bang for your buck if you pick a country or subject that is not popular. Over time what you collect could become more popular, but you should also realize that you run the risk of assembling a collection that might have little marketability.

If you are enjoying assembling your collection now, that shouldn't make a lot of difference. There's value in fun.

So all these variables affect the value of your stamps and covers, but have we answered the question, "How much it is worth?" That depends on what you mean by worth.

If you need to know the value of your collection for insurance purposes, then that would be the replacement value — how much it would cost to replace your stamps should they become lost, stolen or destroyed.

If you are planning to sell your collection, you need the appraised cash value. Always remember that a stamp dealer must expect to make a profit in reselling your stamps, if he wants to stay in business. He cannot do that by buying your stamps at catalog value.

Neither the replacement value nor the appraised cash value correlate exactly to catalog value, which is simply a guide that takes into consideration all of the variables of supply, demand, grade, condition and popularity.

Stamps sell substantially below or, more uncommonly, above catalog values, depending on all variables.

There really is no simple answer to the question "How much is it worth?"

Let's go back to the original examples. The common stamp you purchased for three times the catalog value was sold by a dealer who knew that the stamp was difficult to find even though not in great demand. The dealer determined that the market would bear a price greater than catalog value, and he was right.

The Black Jack that you purchased for $200 was good value for the money. The stamp was undamaged, had four clear margins, and was unused, hinged with original gum. It should hold its monetary value very well.

Your set of stamps from Tonga is not a set at all because it is missing one of the values in the set. Complete sets are more saleable than short sets or those that have stamps missing. All other variables being equal, your incomplete Tonga set will sell for considerably less than the complete set. The 20¢ catalog value of the missing stamp translates into several dollars in lost retail value for the dealer who tries to sell it.

The bottom line is this: Buy the best quality you can afford and take care of your stamps and covers.

Then you will be able to recover some of the money you put into the collection when it comes time to sell.

But remember, you can't put a dollar value on the friends you made, the knowledge you gained, the stress you relieved, the fun you had, the thrills you got, or the satisfaction your collection provides.