Finding Proof Coins in Circulation

Finding and identifying proof coins in circulation has been a topic floating around the social networks lately.  They are out there.  People find them all the time.  Proof coins make it into circulation in a variety of ways: theft, desperation, accident and ignorance top the list of vectors.  I know for a fact there is a 1976-S Clad Proof Washington Quarter out there that should be in my collection.

Most of the proof coins being found in circulation are current series coins:

1985 United States Proof Set

• Lincoln Cents
• Jefferson Nickels
• Roosevelt Dimes
• Washington Quarters
• Kennedy Half Dollars

There are also proof small dollars out there but they don't circulate as widely and are not searched by very many coin roll hunters.  The Kennedy halves don't circulate much either, but hunters hit the halves pretty hard.

First off, lets get some myths out of the way.
Proof is not a grade or condition.  It is a unique production method which uses specially polished and specifically prepared dies, polished planchets, and a slightly different minting process than the normal business strike coins you handle every day.  Once a proof, always a proof. 
There is a myth floating around that a proof coin is one that has never been touched by human hands.  This is kinda true up to a point.  They get handled by gloved hands and robots when they are packaged in sets at the mint.  Handled when someone cracks open a set.  Handled when found in circulation.  Nonetheless, it is still a proof coin, albeit an Impaired Proof.

Proof coins are not the most valuable.  Believe it or not, individual proof coin prices are often very affordable, often in the $1-$10 range.  There are top grade mint state coins that command a premium in the thousands.  Look up the auction records for a 1978 Lincoln Cent in MS68.  You can pick up a 1978 Proof Set for less than 6 bucks (~$3 shipping) on eBay right now.

Proof coins are not 'Perfect'.  They can be just as flawed as any coin out there.  There are die varieties, missing mintmarks, and errors as with any other date.  As they are handled, they experience wear and damage.  They may have been real close to perfect when minted, but even then, PR69 and PR70 grades are few and far between for most dates.  They have gotten better in recent years with improved quality control.

IDENTIFYING A PROOF
I'm going to focus on Modern proof coins as these are what you are most likely to encounter.  Modern proof production began in 1968 after a 3 year hiatus in the mid 60s.  Whereas proof coins were previously produced in Philadelphia and bear no mintmark, production was moved to San Fransisco and have the corresponding S mintmark.  Cents were produced with the S mintmark in proof and business strike issues from 1968 through 1974.  Nickels bore the S mintmark in proof and business strike issued from 1968 through 1970.  For everything else, if it has an S mintmark, it's a proof coin.  Naturally, there are exceptions to this rule but you are not likely to encounter such specimens, so, roll with it.

DIAGNOSTIC #1:  Proof coins have characteristics that distinguish them from business strike coins.  The dies and planchets are highly polished.  This gives the coins a reflective mirror surface.

Mirror finish and cameo devices are the
dominant feature of modern proof coins

In the early stages of die use the devices would have a sharply contrasting finish than the fields.  The effect is termed 'Cameo'.  Development of the die preparation procedures over the years now gives proof coins the cameo finish as a normal feature, with Deep Cameo and Ultra Cameo being added to TPG designations.  The mirror finish can make photography difficult, especially for guys like me.

Proof coins are struck with higher pressures than business strike issues and are struck repeatedly.  The result is sharp detail as you can see in this image.

DIAGNOSTIC #2:  Proof coins have a square edge.

The upsetting process does not bevel the edge of proof as is done with circulation strikes.  Having a beveled edge makes it easier to pick up off a flat surface.  This square rim is visually distinctive. 
In this image the Proof is on the right, circulation strike on the left.

DIAGNOSTIC #3:  Proof coins are just a little bit thicker.  Here's those same two coins edge on.  Boy this was a hard shot to take with a Bloggie!

 

Circulation strike on the left, proof on the right.  Click the image to zoom in.  Note the beveled vs square corner of the rim.  Look real close you'll see the proof exhibits just a little bit of Finning.  They ain't perfect.

PROOFS IN CIRCULATION

As I mentioned, a proof coin is always a proof coin.  Once it enters circulation and takes a few hits, it takes on the classification of Impaired Proof.  Small abrasions and contact with clothing will quickly destroy the mirror finish. 

1982-S Impaired Proof

It can remain highly reflective for some time, especially in the close quarters in and around the devices.  The rim and facia are exposed to wear and damage as any coin in circulation.  Contact with organic acids and the oils on fingers often results in toning atypical for a proof coin.  With enough circulation, the cameo finish can be ruined beyond recognition.  There will still be the mintmark and square edge to use as identification markers, at least until those are destroyed beyond recognition.

The Impaired Proofs don't hold value.  They are essentially worthless, holding only face value.  They can still fill a hole in an album, but when an intact proof can be had for a few dollars, these busted up pieces are relegated to spending the rest of their days as novelties.

SILVER CONTENT

1964 and earlier proof dimes, quarters, and halves are 90% silver. Starting in 1968 the proof dimes and quarters were struck with clad composition while the halves were struck in 40% silver. In 1971 the halves were done in clad. Along came the Ike Dollar, struck in 40% silver in 71 and 72, followed by silver or clad in 73 and 74.  Along comes the bicentennial, quarters, halves and dollars were struck in silver or clad, with proof and uncirculated versions. From 77 onward, no more silver...until 1992 when silver proof sets came out bringing 90% dimes, quarters and halves in addition to clad versions.
These silver proof sets continue to this day.  It's possible for these silver proofs to make it into circulation.  There are reports of these being found.

UPDATE
Here's a 1982-S found in circulation in June 2017.  It was found by Denise Catania and presented in the Coin Opp facebook group.