In the study of numismatics, token coins or tokens are coin-like objects used instead of coins. The field of tokens is part of exonumia. Tokens are used in place of coins and either have a denomination shown or implied by size, color or shape. The true "token coins" pre-1932 are often made of cheaper materials than the precious metals: copper, pewter, aluminium, brass and tin were commonly used, while bakelite, leather, porcelain, and other less durable materials are also known.
The key point of difference between a token and a coin is that a coin is issued by a local or national authority and is freely exchangeable for goods or other coins, whereas a token has a much more limited use and is often (but not always) issued by a private company, group, association or individual.
In the case of "currency tokens" issued by a company but also recognised by the State there is a convergence between token coins and currency. The best known example, the trade tokens of Strachan and Company, were issued in South Africa in 1874 and are today recognised as that country's first widely circulating indigenous currency.
In their purest form currency tokens issued by a company crossed the boundary of merely being "trade" tokens when they were sanctioned by the local government authority. This was sometimes a measure resulting from a severe shortage of money or the authority's inability to issue its own coinage. In effect the organisation behind the tokens became the regional bank.
One well-known example of currency tokens are the Strachan and Co tokens which were first issued in 1874 in a remote part of South Africa known as East Griqualand. They are widely recognised by numismatists today as South Africa's first indigenous coinage. A partner in Strachan and Co, Charles Brisley, was also the government secretary and obtained official recognition of the tokens as currency for that region. The Standard Bank of South Africa notes in its official archives that its branch in Kokstad, East Griqualand's capital, readily exchanged these tokens as currency in the 1800s because of the shortage of coinage of the crown in the region. These tokens were South Africa's first widely circulating indigenous currency.
Similarly, in times of high inflation, tokens have sometimes taken on a currency role. An example of this is Italian or Israeli telephone tokens, which were always good for the same service (i.e., one call) even as prices increased. New York City subway tokens were also accepted sometimes in trade, or even in parking meters, since they had a set value.
From the 17th to the early 19th century in the British Isles and North America these were commonly issued by traders in times of acute shortage of coins of the state to enable trading activities to proceed. The token was in effect a pledge redeemable in goods but not necessarily for coins. These tokens never received official sanction from government but were accepted and circulated quite widely.
In England the production of copper farthings was permitted by royal licence in the first few decades of the 17th century, but production ceased during the English Civil War and a great shortage of small change resulted. This shortage was felt more keenly because of the rapid growth of trade in the towns and cities, and this in turn prompted both local authorities and private traders to issue tokens.
These tokens were most commonly made of copper or brass, but pewter, lead and occasionally leather tokens are also found. Most were not given a specific denomination and were intended to pass as farthings, but there are also a large number of halfpenny and sometimes penny tokens. Halfpenny and penny tokens usually, but not always, bear the denomination on their face.
Most such tokens indicate the name of their issuer, which might either be his or her full name or initials. Where initials were provided it was common practice to provide three, one for the surname and the other two for the first names of husband and wife. Tokens would also normally indicate the trading establishment concerned, either by name or by picture. Most were round, but they are also found in square, heart or octagonal shapes.
Thousands of towns and traders issued these tokens between 1648 and 1672, when official production of farthings resumed and private production was suppressed.
Another period of coin shortage occurred in the late 18th Century, when the Royal Mint almost ceased production. Traders once again produced tokens, but they were now machine made and typically larger than their 17th century predecessors with values of a halfpenny or more. While many were used in trade, they were also produced for advertising and political purposes, and some series were produced for the primary purpose of sale to collectors. These tokens are usually known as "Conder" tokens in the United States.
These were issued by a trader in payment for goods with the agreement that they will be redeemed in goods to an equivalent value at the traders own outlets. The transaction is therefore one of barter, with the tokens playing a role of convenience, allowing the seller to receive his goods at a rate and time convenient to himself and the trader to lock the holder of the token coin to his shop. Trade tokens often change slowly and subtly into barter tokens over time, as evidence by the continued circulation of former trade tokens when the need for their use had passed.
Because of weight, the U.S. Treasury Department does not ship coins to the Armed Forces serving overseas; so, Army and Air Force Exchange Service officials chose to make pogs in denominations of 5, 10 and 25 cents. The pogs are about 38mm (1.5816" to be exact) in diameter and feature various military-themed graphics.
The collecting of trade tokens, is called "exonumia", and includes other types of tokens, including transit tokens, encased cents, and many others. In a narrow sense, trade tokens are the "good for" tokens, issued by merchants. Generally they have a merchants name, sometimes a town and state, and also the required "good for 5¢" (or other denomination) legend somewhere on the token. Types of merchants that issued tokens include general stores, grocers, department stores, meat markets, drug stores, saloons, bars, taverns, barbers, coal mines, lumber mills, and many other businesses. The era of 1870 thru 1920 marked the highest use of "trade tokens" in the United States, spurred by the proliferation of saloons, billiard halls, bakerys, and general stores in rural areas. Thousands of small general stores and merchandise stores were found all over the United States, in almost every small town, and many of them used trade tokens to promote trade and extend credit to customers. Aluminum tokens almost always date after 1890.
Money is exchanged for the token coins or chips in a casino at the casino cage, at the gaming tables, or at a slot machine and at a cashier station for slot token coins. The tokens are interchangeable with money at the casino. They generally have no value outside of the casino.
After the increase in the value of silver stopped the circulation of silver dollar coins around 1964, casinos rushed to find a substitute, as most slot machines at that time used that particular coin. The Nevada State Gaming Control Board consulted with the U.S. Treasury, and casinos were soon allowed to start using their own tokens to operate their slot machines. The Franklin Mint was the main minter of tokens at that time.
In 1971, many casinos adopted the Eisenhower dollar for use in machines and on tables. When the dollar was replaced with the Susan B. Anthony dollar in 1979, most casinos reinstituted tokens, fearing confusion with quarters and not wishing to extensively retool their slot machines. Those casinos which still use tokens in slot machines still use Eisenhower-sized ones.
In many jurisdictions, casinos are not permitted to use currency in slot machines, necessitating tokens for smaller denominations.
Tokens are being phased out by many casinos in favor of coinless machines which accept banknotes and print receipts for payout. (These receipts can also be inserted into the machines.)
Staff tokens were issued to staff of businesses in lieu of coin. In the 1800s the argument supporting payment to staff was the shortage of coin in circulation, but in reality employees were forced to spend their wages in the company's stores at highly inflated prices - resulting in an effective dramatic lowering of their actual salary and disposable income.
Railways and public transport agencies used fare tokens for years, to sell rides in advance at a discount, or to allow patrons to use turnstiles geared only to take tokens (as opposed to coins, currency, or fare cards).
In North America tokens were originally issued by traders from the 1700s in regions where national or local colonial governments did not issue enough small denomination coins for circulation. They were later used to create a monopoly; to pay labour; for discounts (pay in advance, get something free or discounted); or for a multitude of other reasons. In the United States, a well-known type is the wooden nickel, a five-cent piece distributed by cities to raise money for their anniversaries in the 1940s to 1960s.
Local stores, saloons and mercantiles, would issue their own tokens as well, spendable only in their own shops. Railways and public transport agencies have used fare tokens for years to sell rides in advance at a discount. Many transport organizations still offer their own tokens for bus and subway services, toll bridges, tunnels, and highways, although the use of computer-readable tickets has replaced these in some areas.
Churches used to give tokens to members passing a religious test prior to the day of communion, then required the token for entry. While mostly Scottish Protestant, some U.S. churches used communion tokens. Generally, these were pewter, often cast by the minister in church-owned molds. Replicas of these tokens have been made available for sale at some churches recently.
Wipo Publishes Patent of Saxonia Eurocoin, Thomas Bilas, Swen Hopfe, Ralph Siegel, Stephan Siegel for "Multi-Part Token Coin Having a Core Made of Plastic" (German Inventors)
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