History of the Challenge Coin
The legend goes like this... A WWI Pilot, a wealthy lieutenant, ordered small, solid-bronze medallions (or coins) struck, which he then presented to the other pilots in his squadron as mementos of their service together. The coin was gold-plated, bore the squadron’s insignia, and was quite valuable. One of the pilots in the squadron, who had never owned anything like the coin, placed it in a leather pouch he wore around his neck for safekeeping. A short while later, this pilot’s aircraft was heavily damaged by ground fire (other sources claim it was an aerial dogfight), forcing him to land behind enemy lines and allowing him to be captured by the Germans. The Germans confiscated the personal belongings from his pockets, but they didn’t catch the leather pouch around his neck. On his way to a permanent prisoner of war facility, he was held overnight in a small German-held French village near the front. During the night, the town was bombarded by the British, creating enough confusion to allow the pilot to escape.
The pilot avoided German patrols by donning civilian attire, but all of his identification had been confiscated so he had no way to prove his identity. With great difficulty, he crept across no-man’s land and made contact with a French patrol. Unfortunately for him, the French had been on the lookout for German saboteurs dressed as civilians. The French mistook the American pilot for a German saboteur and immediately prepared to execute him.
Desperate to prove his allegiance and without any identification, the pilot pulled out the coin from his leather pouch and showed it to his French captors. One of the Frenchmen recognized the unit insignia on the coin and delayed the execution long enough to confirm the pilot's identity.
Once the pilot safely returned to his squadron, it became a tradition for all members to carry their coin at all times. To ensure compliance, the pilots would challenge each other to produce the coin. If the challenged couldn’t produce the coin, he was required to buy a drink of choice for the challenger; if the challenged could produce the coin, the challenger would purchase the drink.
The tradition of a challenge is the most common way to ensure that members are carrying their unit's coin. The rules of a challenge are not always formalized for a unit, and may vary between organizations. The challenge only applies to those members that have been given a coin formally by their unit. This may lead to some controversy when challenges are initiated between members of different organizations and is not recommended. The tradition of the coin challenge is meant to be a source of morale in a unit, and forcing the challenge can cause a reverse effect.
The challenge, which can be made at any time, begins with the challenger drawing his/her coin, and slapping or placing the coin on the table or bar. In noisy environs, continuously rapping the challenge coin on a surface may initiate the challenge. (Accidentally dropping a challenge coin is considered to be a deliberate challenge to all present.) Everyone being challenged must immediately produce the coin for their organization and anyone failing to do so must buy a round of drinks for the challenger and everyone else who has their challenge coin. However, should everyone challenged be able to produce their coin, the challenger must buy a round of drinks for the group.
While most holders of challenge coins usually carry them in their pockets or in some other readily accessible place on their persons, most versions of the rules permit a challenged person "a step and a reach" (particularly useful if one is challenged in the shower).
Variants of the rules include the following. If you are able to steal a challenge coin, everyone in the group must buy you a drink. During a challenge, everyone in the group must buy you a drink if you are the holder of the highest ranking coin. Some units provide strict time limits to respond to a challenge.
Examples of Challenge Coins of Various Types and Organizations
Air Force Coin Check.
Marines Coin Check.
Army Coin Check. Airborne.
Navy Coin Check. (Notta)
Coast Guard Coin Check. (Not Much)