There is a tradition in the military to give military coins as gifts of honor, respect, gratitude and loyalty. The origin of these coin gifts is unknown, but there are legends dating back as far as World War I. Whether or not these legends are truth or not is a mystery.
Many names are given to military coins: challenge coins, squadron's coins, military coins, unit coins, memorial coins, unit challenge coins and commander’s coins.
Coins are given as tokens of affiliation, support, patronage, respect, honor and gratitude. They can be a gift to boost morale or reward behavior. Commanders often give coins to members of the troop who have done something worthy but not meritorious enough for a formal award. Once someone has received a challenge coin, it is carried at all times, traditionally inside a pouch worn around the neck.
Owners of military coins often play a challenge game with them in a bar or restaurant. The challenger slaps his coin on the table. If the challenged opponent presents his coin, then the challenger has to buy him a drink. If he does not present a challenge coin, he must buy the challenger a drink.
A World War I legend says that an American pilot was captured by the Germans, but escaped and made his way to a town in France. The residents mistook him for a German saboteur, but when he showed them his coin, they recognized it as the insignia of his squadron and let him return. Another legend is that during the war in Vietnam, soldiers carried bullets to demand respect. They challenges others to present a bullet and the one with the smaller bullet would purchase drinks for everyone else. It became dangerous as the size of the bullets increased, so the soldiers replaced bullets with coins.
Recipients of Coins
Coin giving is not just a tradition among military officials. Sometimes a military official will give a coin to someone else of importance. Bill Clinton, George W. Bush, and Barack Obama are all presidents who were given a coin by a military official.