I know my local coin dealers will re-bag any junk silver they get unless the coins are very worn down or damaged (bent, holes, etc). The reason for this is that the premiums they can charge for junk silver being resold to customers is much higher than the amount they get from a refiner who is melting the coins. This even goes for 40%. All the large, national coin dealers quote buy/sell prices for junk bags of both 90% and 40%, in fact sites like Apmex and Tulving are good to check to see the going rate at any given time, although the prices quoted are generally for larger amounts and not a few coins.
This is why I generally prefer cheaper, generic .999 over junk silver when I am buying silver. No matter what, it is pure silver. At times in the past when junk silver falls out of favor, the amount dealers pay you for it will be less than what you would think based on silver value because it is going to be sent to the refiner and/or customers are not buying it as much.
For instance, dealers pay very little for sterling coins/silverware. There are not alot of them, but there are some cool looking rounds/bars made out of sterling (92.5%). Right now the ballpark for dealer bids on sterling coins, etc, per ounce is around $26 bucks, yet lower purity junk silver is much higher. This is because the junk silver is resold to collectors and investors and sterling is almost always sent to refiners to be melted. My local dealers sometimes have a bin of sterling coins they will let you see if you ask, but will still try to sell it at melt value yet if you go to sell it back, they will pay next to nothing (very high buy/sell spreads so best to avoid in my opinion.) Also, one time I took a beating on buying old, foreign silver junk coins like Canadian and Mexican that I thought was a good deal when the dealer sold it to me for melt, however when I thought about selling it they offered silver prices similar to sterling and said it would be sent to the refiner if I sold it back to them because it had virtually no commercial demand (unlike US junk silver). I decided to keep it but will not buy it anymore.
It is true though that over time the US junk silver coins will disappear and the population will diminish. My view is that maybe in 100 or so years from now well circulated junk silver may have some numismatic value. But there are still millions and millions of them stashed in grandpas' closets and in junk bags waiting for higher silver prices to be cashed in. Many were melted in the early 80s when silver went up in price so fast.
It is all personal preference, if you like US junk coins they are nice to have as long as you stick with 90%, fairly good condition. I believe in time if/when silver goes up alot, they will start buying/selling them by weight instead of face value. If that happens, all those highly worn coins will be worth less compared to less circulated coins in an instant.
PS. One tip when buying any PM of any type, is look at the buy/sell spreads at your coin dealers. Find out what they will pay you if you sold it back to them the next day vs. what you pay today. This gives you an idea at any point in time where the demand is from investors/collectors. These spreads do change though based on customer demand. Like old US gold coins, their premiums move percentage wise quite a bit.
Jim
