A challenge coin is a small coin or medallion (usually military), bearing an organization’s insignia or emblem and carried by the organization’s members. Traditionally, they are given to prove membership when challenged and to enhance morale. In addition, they are also collected by service members. In practice, challenge coins are normally presented by unit commanders in recognition of special achievement by a member of the unit. They are also exchanged in recognition of visits to an organization.

Coin appearance

There are many finishes available—from a simple pewter to 24K gold. While there are only a few base metals, the patina (finish) can range from gold, silver, nickel, brass, copper. bronze plus the antiqued variations. Soft or hard enamel or a printed inset with an epoxy coating may add color (the epoxies are often more resilient and scratch resistant than the metal surfaces).

Cost

Challenge coins are moderately inexpensive to design and produce. There are two basic processes by which to manufacture: zinc-alloy castings or die struck bronze.

Zinc alloy castings offer the advantage of low cost. While a die struck bronze or brass coin is more expensive, the result renders a far superior product (numismatic quality).

As of 2010, coins manufactured in China and South Korea typically cost between US$2.50 to US$7.00 per coin depending on production process and complexity of design, laser engraving, enamels, voids, etc. The dies must be sculpted by an artist and can range in cost from US$50 to US$300 depending on complexity. The cost of domestic manufacture can be many times this amount.

In order to be competitive, most North American companies offering challenge coins rely on having the product manufactured 'off-shore'.