Coin grading
Encyclopedia
In coin collecting coin grading is the process of determining the grade or condition of a coin, one of the key factors in determining its value as a collector's item.
The grading of a coin includes the analysis of several criteria, the most important being the quality, the rarity, the interest factor, and the liquidity factor.
This evolved for a time to the letter grading system beginning with the lowest grade – Basal State (also Poor (PO)), then continuing Fair (Fr), About or Almost Good (AG), Good (G), Very Good (VG), Fine (F), Very Fine (VF), Extra Fine (EF or XF), Almost or About Uncirculated (AU), Uncirculated (Unc) and up to Brilliant Uncirculated (BU). Gem Uncirculated was roughly equivalent in usage to BU at that time.
The British grading system is similar, except that 'Good' and 'Very Good' are 'Poor' and 'Fair' respectively. The word 'Good' used to describe a coin under the British grading system is usually an indication that it is at the higher end of its grading classification, e.g. a 'Good Fine' coin will be in a better condition than a coin that is merely 'Fine'.
William H. Sheldon in his book Penny Whimsy is credited with coming up with the Sheldon Scale in the 1950s, a numeric system going from 1-70. It was intended to be a reflection of the relative value
of a 1794 Large Cent, which was then worth $1 in Basal State and $70 in Uncirculated MS-70.
This numerical system was used primarily within the community of large copper coin collectors (a very specialized part of numismatics
that often has its own ideas about quality and grading compared to the rest of the coin collecting community) until the mid 1980s.
Now it is widely known that the numbers are a scale: 70 being a perfect coin, and 1 appearing as little more than a piece of oxidized, scarred, and bent copper.
In the early years of coin collecting, three general terms were used to grade coins:
Sheldon's scale, included in his famous work "Penny Whimsy", was originally devised specifically for United States large cents, but it is now applied to all series. The scale runs from 0 to 70, where 0 means that you can pretty much tell that it was once a coin while 70 means that it is perfect.
) of Dallas, Texas. In 1985, Ivy Press published the NCI Grading Guide, later renamed How to Grade U.S. Coins, an instruction manual on grading mint state
and proof U.S. coins by James L. Halperin
.
In 1986, PCGS (Professional Coin Grading Service
) was incorporated. PCGS authenticated, graded and encapsulated coins in a protective hard plastic shell. They used a combination of the two older systems putting letters and numbers together so that the grades became BS-1 (or PO-1), FR-2, AG-3, G-4 (Good: coin is heavily worn, even the major detail is not clearly visible), G-6, VG-8, VG-10, F-12 (Fine: fine detail visible but coin is heavily worn), F-15, VF-20, VF-25, VF-30, VF-35, XF-40, XF-45, AU-50 (About Un-circulated), AU-53, AU-55, AU-58, MS-60 (Mint State: completely un-circulated condition), MS-61, MS-62, MS-63, MS-64, MS-65, MS-66, MS-67, MS-68, MS-69 and MS-70 (Mint State: perfect, the highest level on the Sheldon Scale). For mint state and proof coins, PCGS used a slightly stricter interpretation than NCI, but basically employed the same standards outlined in Halperin's book. They also issued limited guarantees for the value of coins they had graded.
The march to finer and finer distinction had taken another huge step. Alongside this scale was a similar one for proof coins
PR-01 or PF-01 through PR-70 or PF-70 that was roughly equivalent to the MS scale, except for proof coins. This is important as in some issues distinguishing between mint state (for commerce) and proof coins is very difficult and specialized and the price differences can be large in favor of either MS or PR/PF.
The origin of the idea to make coins easily tradable on an open market
came from Wall Street in order to expand beyond the bullion coin market. However, because they had finite mintages, and used technical grading rather than market grading there are physical and practical limits to their system, particularly in relating the grade directly to a value. One thing PCGS did accomplish was largely ridding the marketplace of inferior counterfeit coins. Unfortunately, some better counterfeits have since come into being, further justifying the need for professional authentication in a counterfeit-authentication arms race.
.
As a variety receives more publicity within the numismatic press, the interest factor may rise as demand increases. This may cause the price or value of certain varieties to increase without any change in the estimated quantity available. On the other hand, if a large quantity of a variety surfaces, the value of that variety may decrease as the supply outstrips the demand. As in other segments of the hobby, a combination of supply and demand almost always dictates the price or value of a particular variety.
. ANACS is considered the third leading service, and is also quite credible, but does not carry the market acceptance or liquidity of the other two. ICG is the fourth largest. There are subtle variations in the grades assigned by each of these major services, and prospective buyers are encouraged to seek professional or expert advice before making any important rare coin purchases.
An interesting contender among previous grading services was Compugrade. In 1990 Henry Merton was awarded United States Patent Number 4,899,392: Method and System for Objectively Grading and Identifying Coins, Feb. 6, 1990. Compugrade’s computers evaluated mint luster, physical damage to the coin and other conditions that detracted from the quality of 'Mint State.' Compugrade also patented a ‘tamper-proof’ slab to hold the coins that they graded. However, a ‘coup’ by members of Compugrade’s board of directors caused Henry Merton to telephone the Editor of Coin World to ask her to publish the letter that he had filed with her. That letter acknowledged assistance from numismatists who had not signed release forms for their contribution of information to the writing of the patent. That letter to the editor ‘wiped out’ Compugrade’s exclusivity by placing the patent in the public domain, which was Merton’s intent.
In the May 26, 2003 edition of Coin World
, the hobby newspaper had announced they had contracted investigators to conduct a year-long, comparative study of PCGS, ANACS, NGC, and ICG, along with several other grading services, each known as a TPG or Third Party Grader. In their investigation, Coin World sent several of the same coins to each grading service over the course of a year, each coin being graded by all Third Party Graders sent to. The findings were; "In no case did the grading services agree on the grade of any given coin, and in some cases the difference in grading was as much as seven points off". By way of example, a finding published by Coin World involved one case where ACCGS had graded a coin as "cleaned", which lowers the coin value. Additionally the coin had been graded several grades lower than PCGS while PCGS had not noted the same coin was "in fact, cleaned". It is standard in U.S. numismatics to grade coins on a point-scale from 1 (poor) to 70 (perfect), and to note if a coin has been cleaned or poorly mishandled, or in some cases to reject it for encapsulation.
On January 5, 2007, the Professional Numismatists Guild (PNG) published a more recent report about grading services and standards. The survey indicated the professional opinions of numismatists who buy and sell coins. No grading service was listed as "outstanding". PCGS and NGC were ranked as "superior". ANACS and ICG were ranked as "good".
In September 2004, members of the American Numismatic Association
(ANA) reported seeing counterfeit NGC PCGS holders (also known as "slabs") at the Long Beach
Coin Show. Members of the Beverly Hills Coin Club (BHCC) an affiliate club-member of the ANA, had reported counterfeit coin slabs as early as December 3, 1998. As a direct result, BHCC partnered with ACCGS, manned by unpaid club volunteers, as a pre-certification service for coins and to "guarantee the authenticity of slabs or Third Party Grader holders". More counterfeit PCGS and NGC holders were reported on eBay
in 2005 and later years, but NGC did not address the problem until 2008, after high-quality counterfeit holders had been seen and purchased on eBay. Numismatic Guaranty Corporation (NGC) published the following acknowledgment on January 7, 2008:
"NGC has identified and confirmed that (counterfeit replicas) of its holder has been produced.......The holder has been seen housing counterfeit dollar or foreign crown size coins. While the enclosed coins are also counterfeit, the label information matches the coin type enclosed. The label information is copied from actual NGC certification labels, and the certification information therefore will match the NGC database. Most frequently, Trade Dollars and Bust Dollars are found, although Flowing Hair Dollars and foreign coins have also been seen. A range of grades is also represented."
NGC and PCGS counterfeit holders have been reported in eBay forums and more may be reported by other firms and individuals. The PCGS website notes that they "anticipate that authentic coins will eventually be placed into counterfeit holders". Third party graders are taking measures to resist counterfeiting, however, counterfeit holders may multiply and improve over time. Numismatic Guaranty Corporation and PCGS offer no reimbursement liability for the prices paid for coins in their counterfeit holders. Both firms have online links to verify the holder numbers. However, many buyers may not be computer users or may be unaware of such links. Caution is advised when purchasing coins in PCGS and Numismatic Guaranty Corporation holders as the seller can disclaim liability due to the "third party" nature of the counterfeit holder. Additionally, it may be too late to request refunds from eBay sellers before holders can be verified as counterfeits. Many coins are posted on eBay and through other venues "as is" and therefore with no return privileges.
In addition, both PCGS and NGC introduced "Plus" grading in 2010, whereby coins graded between XF45 and MS68 can receive a '+' (for example, MS63+) if they are at the high end of their assigned grade.
The depth of mirrors on proof coinage has led to terms of distinction such as Cameo, Deep Cameo, Ultra Cameo and so forth. Also, uncirculated coins are sometimes deemed Proof-like and Deep Mirror Proof-like.
With all of these factors to consider, and the distinction between grades being so fine in many cases, it becomes more and more difficult for the average collector to keep up. The general public is even less likely to understand this explosion of grades and the subsequent valuations. Nevertheless, there are many good books and web sites that can assist in determining the approximate grade of coins.
The grading of a coin includes the analysis of several criteria, the most important being the quality, the rarity, the interest factor, and the liquidity factor.
Overview
Coin grading has evolved over the years to a system of finer and finer grade distinctions. Originally, there were only two grades, new and used.This evolved for a time to the letter grading system beginning with the lowest grade – Basal State (also Poor (PO)), then continuing Fair (Fr), About or Almost Good (AG), Good (G), Very Good (VG), Fine (F), Very Fine (VF), Extra Fine (EF or XF), Almost or About Uncirculated (AU), Uncirculated (Unc) and up to Brilliant Uncirculated (BU). Gem Uncirculated was roughly equivalent in usage to BU at that time.
The British grading system is similar, except that 'Good' and 'Very Good' are 'Poor' and 'Fair' respectively. The word 'Good' used to describe a coin under the British grading system is usually an indication that it is at the higher end of its grading classification, e.g. a 'Good Fine' coin will be in a better condition than a coin that is merely 'Fine'.
William H. Sheldon in his book Penny Whimsy is credited with coming up with the Sheldon Scale in the 1950s, a numeric system going from 1-70. It was intended to be a reflection of the relative value
Relative value
Relative value is the attractiveness measured in terms of risk, liquidity, and return of one instrument relative to another, or for a given instrument, of one maturity relative to another...
of a 1794 Large Cent, which was then worth $1 in Basal State and $70 in Uncirculated MS-70.
This numerical system was used primarily within the community of large copper coin collectors (a very specialized part of numismatics
Numismatics
Numismatics is the study or collection of currency, including coins, tokens, paper money, and related objects. While numismatists are often characterized as students or collectors of coins, the discipline also includes the broader study of money and other payment media used to resolve debts and the...
that often has its own ideas about quality and grading compared to the rest of the coin collecting community) until the mid 1980s.
Now it is widely known that the numbers are a scale: 70 being a perfect coin, and 1 appearing as little more than a piece of oxidized, scarred, and bent copper.
Components of coin grading
A "grade" is a shorthand devised by numismatists to indicate the appearance of a coin. There are generally five main components which determine a coin's grade: strike, surface preservation, luster, coloration and eye appeal.Early grading systems
The quality of all coins is not equal and collectors felt the necessity of defining the quality of the coins in order to assess their value. Rims, nicks, polishing, scratches and other forms of wear are considered factors in grading a coin. Also, if coins have been in some form of jewelry also affects the grading.In the early years of coin collecting, three general terms were used to grade coins:
- good - when circulation had worn the surface of the coin, but details were still visible.
- fine - when features were less worn and a bit of mint luster showed on the surface.
- uncirculated - when the features of the coin were sharp and the luster approaching the state of the coin at the mint. .
The Sheldon grading system
As the collector market for coins grew rapidly in the late 19th century and early 20th century, it became apparent that a more precise grading standard was needed. Some coins were simply more fine than others, and some uncirculated coins showed more luster and far fewer marks than others. Terms like "gem uncirculated" and "very fine" began to see use, as more precise grading descriptions allowed for more precise pricing for the booming collector market. In 1948, a well-known numismatist by the name of Dr. William Herbert Sheldon attempted to standardize coin grading by proposing what is now known as the Sheldon Scale.Sheldon's scale, included in his famous work "Penny Whimsy", was originally devised specifically for United States large cents, but it is now applied to all series. The scale runs from 0 to 70, where 0 means that you can pretty much tell that it was once a coin while 70 means that it is perfect.
European grading system
European countries use various, roughly equivalent, grading systems. The main features of their systems are presented in the following table:| Adjective | Design remaining | United Kingdom United Kingdom The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages... |
France France The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France... |
Spain Spain Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula... |
Italy Italy Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and... |
Germany Germany Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate... |
Scandinavia Scandinavia Scandinavia is a cultural, historical and ethno-linguistic region in northern Europe that includes the three kingdoms of Denmark, Norway and Sweden, characterized by their common ethno-cultural heritage and language. Modern Norway and Sweden proper are situated on the Scandinavian Peninsula,... |
Netherlands Netherlands The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders... |
Portugal Portugal Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the... |
|---|---|---|---|---|---|---|---|---|---|
| Good | 10% | G | AB (Assez Beau) | RC | M | GE (Gut erhalten) | 2 | G (Goed) | REG |
| Very Good | 25% | VG | B (Beau) | BC | B (Bello) | SGE (Sehr gut erhalten) | 1- | ZG (Zeer Goed) | MREG |
| Fine | 50% | F | TB (Très Beau) | BC+ | MB(Molto Bello) | S (Schön) | 1 | Fr (Fraai) | BC |
| Very Fine | 75% | VF | TTB (Très Très Beau) | MBC | BB (Bellissimo) | SS (Sehr schön) | 1+ | ZF (Zeer Fraai) | MBC |
| Extra Fine | 90% | XF | SUP (Superbe) | EBC | SPL (Splendido) | VZ (Vorzüglich) | 01 | Pr. (Prachtig) | Bela |
| About Uncirculated | 95% + some luster | XF/UNC | No use | No use | No use | UNZ- (Fast unzirkuliert) | 01/0 | No use | No use |
| Uncirculated | 100% + luster | UNC | SPL (Splendide) | SC | SPL/FDC | UNZ (Unzirkuliert) | 0 | FDC (Fleur de Coin) | Soberba |
| Brilliant Uncirculated | 100% + full luster | UNC | FDC (Fleur de Coin) | FDC | FDC | STGL (Stempelglanz) | 0 | FDC | No use |
Distinctions
In 1984, Numismatic Certification Institute (NCI), the first privately-owned grading service, was launched by the owners of Heritage Rare Coin Galleries (now Heritage Auction GalleriesHeritage Auction Galleries
Heritage Auction Galleries is the world's largest collectibles auctioneer and the third largest auction house, with over $700 million in annual sales and 600,000 online bidder-members...
) of Dallas, Texas. In 1985, Ivy Press published the NCI Grading Guide, later renamed How to Grade U.S. Coins, an instruction manual on grading mint state
Mint state
Mint State refers to a grade used in numismatics. It is given to a coin which was not used in circulation, and thus can be described "as new"....
and proof U.S. coins by James L. Halperin
James L. Halperin
James L. Halperin is an American author and businessman. In 1985 Halperin authored a text on grading coins, How to Grade U.S. Coins, upon which the grading standards of the two leading third-party grading services PCGS and NGC were ultimately based...
.
In 1986, PCGS (Professional Coin Grading Service
Professional Coin Grading Service
PCGS is the acronym for Professional Coin Grading Service a third party grading service for grading rare coins. Founded in 1986, and located in Newport Beach, CA., it is a subsidiary of Collector's Universe, Inc. , a company that also buys and sells rare coins and operates a rare comic book...
) was incorporated. PCGS authenticated, graded and encapsulated coins in a protective hard plastic shell. They used a combination of the two older systems putting letters and numbers together so that the grades became BS-1 (or PO-1), FR-2, AG-3, G-4 (Good: coin is heavily worn, even the major detail is not clearly visible), G-6, VG-8, VG-10, F-12 (Fine: fine detail visible but coin is heavily worn), F-15, VF-20, VF-25, VF-30, VF-35, XF-40, XF-45, AU-50 (About Un-circulated), AU-53, AU-55, AU-58, MS-60 (Mint State: completely un-circulated condition), MS-61, MS-62, MS-63, MS-64, MS-65, MS-66, MS-67, MS-68, MS-69 and MS-70 (Mint State: perfect, the highest level on the Sheldon Scale). For mint state and proof coins, PCGS used a slightly stricter interpretation than NCI, but basically employed the same standards outlined in Halperin's book. They also issued limited guarantees for the value of coins they had graded.
The march to finer and finer distinction had taken another huge step. Alongside this scale was a similar one for proof coins
Proof coinage
Proof coinage means special early samples of a coin issue, historically made for checking the dies and for archival purposes, but nowadays often struck in greater numbers specially for coin collectors . Many countries now issue them....
PR-01 or PF-01 through PR-70 or PF-70 that was roughly equivalent to the MS scale, except for proof coins. This is important as in some issues distinguishing between mint state (for commerce) and proof coins is very difficult and specialized and the price differences can be large in favor of either MS or PR/PF.
The origin of the idea to make coins easily tradable on an open market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
came from Wall Street in order to expand beyond the bullion coin market. However, because they had finite mintages, and used technical grading rather than market grading there are physical and practical limits to their system, particularly in relating the grade directly to a value. One thing PCGS did accomplish was largely ridding the marketplace of inferior counterfeit coins. Unfortunately, some better counterfeits have since come into being, further justifying the need for professional authentication in a counterfeit-authentication arms race.
Rarity factor
The value of coins depends on their rarity. There are several scales which have been developed for the definition of the rarity of a particular coin. The most common are the "Sheldon rarity scale" and the "Universal rarity scale"The Sheldon rarity scale
The Sheldon scale has been developed by William Herbert Sheldon in 1958 and consists of a progression of eight levels, in which the population of all coin varieties are to fall. Each level is prefaced with the letter "R", indicating rarity. While being developed for the one cent coins which were he studied, the scale has been used for defining the rarity of all coins.| Rarity | Description |
|---|---|
| R1 | Common, readily available |
| R2 | Less common - Available at most shows, but in limited quantity |
| R3 | Scarce - somewhat difficult to find, only a few likely at larger shows |
| R4 | Very scarce - may or may not find at larger shows/auctions |
| R5 | Rare - unlikely more than 5 at shows or auctions each year |
| R6 | Very rare - Almost never seen, only one may be offered for sale in a year’s time |
| R7 | Prohibitively rare - one may be offered for sale once every few years |
| R8 | Unique, or nearly so |
The Universal rarity scale
The Universal rarity scale (URS) was developed in 1992 by Q. David BowersQ. David Bowers
Quentin David Bowers is among the best-known and most noteworthy numismatic authors of the last 50 years. Beginning in 1953, Bowers’s contributions to numismatics have continued uninterrupted and unabated to the present day. He has been involved in the selling of rare coins since 1953 when he was...
.
| Rarity | Number of known coins |
|---|---|
| URS 0 | None known |
| URS 1 | 1, unique |
| URS 2 | 2 |
| URS 3 | 3 or 4 |
| URS 4 | 5 to 8 |
| URS 5 | 9 to 16 |
| URS 6 | 17 to 32 |
| URS 7 | 33 to 64 |
| URS 8 | 65 to 125 |
| URS 9 | 126 to 250 |
| URS 10 | 251 to 500 |
| URS 11 | 501 to 1,000 |
| URS 12 | 1,001 to 2,000 |
| URS 13 | 2,001 to 4,000 |
| URS 14 | 4,001 to 8,000 |
| URS 15 | 8,001 to 16,000 |
| URS 16 | 16,001 to 32,000 |
| URS 17 | 32,001 to 65,000 |
| URS 18 | 65,001 to 125,000 |
| URS 19 | 125,001 to 250,000 |
| URS 20 | 250,001 to 500,000 |
The Scholten scale
Dutch numismatist C. Scholten developed the following rarity scale in 1953 which he applied to the study of coins in the Dutch colonies The Scholten scale includes the following degrees of rarity| Rarity | Number of known coins |
|---|---|
| C | Common |
| N | Normal |
| S | Scarce |
| R | Rare |
| RR | Very Rare |
| RRR | Extremely Rare |
| RRRR | Of the utmost rarity |
Interest factor
The Interest factor is a term used to indicate how much demand a particular coin or variety might have. A variety with a very high interest factor would be in high demand, with several thousands of collectors desiring the variety. A medium interest factor may indicate that the variety is desired by hundreds or a few thousand people, and a low interest factor might indicate that the coin is sought by just a handful of collectors.As a variety receives more publicity within the numismatic press, the interest factor may rise as demand increases. This may cause the price or value of certain varieties to increase without any change in the estimated quantity available. On the other hand, if a large quantity of a variety surfaces, the value of that variety may decrease as the supply outstrips the demand. As in other segments of the hobby, a combination of supply and demand almost always dictates the price or value of a particular variety.
Liquidity factor
The Liquidity factor is a measurement developed by J. T. Stanton, president of PCI Grading Company to indicate how quickly or how easily a coin or variety should sell at auction, given normal market conditions. Using a scale of 1 to 5, a Liquidity factor of 1 would indicate that the coin would not normally sell very easily or fast, and usually at a discount from suggested values. A Liquidity factor of 5 would be expected to sell right away, and generally command full or inflated suggested values. Hot or highly active market conditions would usually inflate the Liquidity of any coin, with a cold market causing the opposite.Grading services
As of 2010, there are two prevalent coin grading services: PCGS and NGCNumismatic Guaranty Corporation
The Numismatic Guaranty Corporation is a provider of third-party coin grading services to numismatists. The company was founded in 1987 and is headquartered in Sarasota, Florida...
. ANACS is considered the third leading service, and is also quite credible, but does not carry the market acceptance or liquidity of the other two. ICG is the fourth largest. There are subtle variations in the grades assigned by each of these major services, and prospective buyers are encouraged to seek professional or expert advice before making any important rare coin purchases.
An interesting contender among previous grading services was Compugrade. In 1990 Henry Merton was awarded United States Patent Number 4,899,392: Method and System for Objectively Grading and Identifying Coins, Feb. 6, 1990. Compugrade’s computers evaluated mint luster, physical damage to the coin and other conditions that detracted from the quality of 'Mint State.' Compugrade also patented a ‘tamper-proof’ slab to hold the coins that they graded. However, a ‘coup’ by members of Compugrade’s board of directors caused Henry Merton to telephone the Editor of Coin World to ask her to publish the letter that he had filed with her. That letter acknowledged assistance from numismatists who had not signed release forms for their contribution of information to the writing of the patent. That letter to the editor ‘wiped out’ Compugrade’s exclusivity by placing the patent in the public domain, which was Merton’s intent.
In the May 26, 2003 edition of Coin World
Coin World
Coin World is an American weekly numismatic magazine. It is the world’s #1 publication for coin collectors and the weekly newspaper of the entire numismatic field...
, the hobby newspaper had announced they had contracted investigators to conduct a year-long, comparative study of PCGS, ANACS, NGC, and ICG, along with several other grading services, each known as a TPG or Third Party Grader. In their investigation, Coin World sent several of the same coins to each grading service over the course of a year, each coin being graded by all Third Party Graders sent to. The findings were; "In no case did the grading services agree on the grade of any given coin, and in some cases the difference in grading was as much as seven points off". By way of example, a finding published by Coin World involved one case where ACCGS had graded a coin as "cleaned", which lowers the coin value. Additionally the coin had been graded several grades lower than PCGS while PCGS had not noted the same coin was "in fact, cleaned". It is standard in U.S. numismatics to grade coins on a point-scale from 1 (poor) to 70 (perfect), and to note if a coin has been cleaned or poorly mishandled, or in some cases to reject it for encapsulation.
On January 5, 2007, the Professional Numismatists Guild (PNG) published a more recent report about grading services and standards. The survey indicated the professional opinions of numismatists who buy and sell coins. No grading service was listed as "outstanding". PCGS and NGC were ranked as "superior". ANACS and ICG were ranked as "good".
In September 2004, members of the American Numismatic Association
American Numismatic Association
The American Numismatic Association was founded in 1891 by Dr. George F. Heath in Chicago, Illinois. The ANA was formed to advance the knowledge of numismatics along educational, historical and scientific lines, as well as enhance interest in the hobby.The ANA national headquarters and museum is...
(ANA) reported seeing counterfeit NGC PCGS holders (also known as "slabs") at the Long Beach
Long Beach, California
Long Beach is a city situated in Los Angeles County in Southern California, on the Pacific coast of the United States. The city is the 36th-largest city in the nation and the seventh-largest in California. As of 2010, its population was 462,257...
Coin Show. Members of the Beverly Hills Coin Club (BHCC) an affiliate club-member of the ANA, had reported counterfeit coin slabs as early as December 3, 1998. As a direct result, BHCC partnered with ACCGS, manned by unpaid club volunteers, as a pre-certification service for coins and to "guarantee the authenticity of slabs or Third Party Grader holders". More counterfeit PCGS and NGC holders were reported on eBay
EBay
eBay Inc. is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide...
in 2005 and later years, but NGC did not address the problem until 2008, after high-quality counterfeit holders had been seen and purchased on eBay. Numismatic Guaranty Corporation (NGC) published the following acknowledgment on January 7, 2008:
"NGC has identified and confirmed that (counterfeit replicas) of its holder has been produced.......The holder has been seen housing counterfeit dollar or foreign crown size coins. While the enclosed coins are also counterfeit, the label information matches the coin type enclosed. The label information is copied from actual NGC certification labels, and the certification information therefore will match the NGC database. Most frequently, Trade Dollars and Bust Dollars are found, although Flowing Hair Dollars and foreign coins have also been seen. A range of grades is also represented."
NGC and PCGS counterfeit holders have been reported in eBay forums and more may be reported by other firms and individuals. The PCGS website notes that they "anticipate that authentic coins will eventually be placed into counterfeit holders". Third party graders are taking measures to resist counterfeiting, however, counterfeit holders may multiply and improve over time. Numismatic Guaranty Corporation and PCGS offer no reimbursement liability for the prices paid for coins in their counterfeit holders. Both firms have online links to verify the holder numbers. However, many buyers may not be computer users or may be unaware of such links. Caution is advised when purchasing coins in PCGS and Numismatic Guaranty Corporation holders as the seller can disclaim liability due to the "third party" nature of the counterfeit holder. Additionally, it may be too late to request refunds from eBay sellers before holders can be verified as counterfeits. Many coins are posted on eBay and through other venues "as is" and therefore with no return privileges.
Complexity
It is difficult to imagine that there will be yet finer distinctions in grading in the future, yet it's already happening. Series-specific strike distinctions such as FSB (Fully Split Bands) for Mercury and Roosevelt Dimes, FBL (Full Bell Lines) for Franklin Half Dollars, FH (Full Head) for Standing Liberty Quarters, 5 and 6 step Jefferson Nickels and so forth are creating condition rarities out of coins formerly thought of as common.In addition, both PCGS and NGC introduced "Plus" grading in 2010, whereby coins graded between XF45 and MS68 can receive a '+' (for example, MS63+) if they are at the high end of their assigned grade.
The depth of mirrors on proof coinage has led to terms of distinction such as Cameo, Deep Cameo, Ultra Cameo and so forth. Also, uncirculated coins are sometimes deemed Proof-like and Deep Mirror Proof-like.
With all of these factors to consider, and the distinction between grades being so fine in many cases, it becomes more and more difficult for the average collector to keep up. The general public is even less likely to understand this explosion of grades and the subsequent valuations. Nevertheless, there are many good books and web sites that can assist in determining the approximate grade of coins.
See also
- Mint stateMint stateMint State refers to a grade used in numismatics. It is given to a coin which was not used in circulation, and thus can be described "as new"....
- Coin collectingCoin collectingCoin collecting is the collecting or trading of coins or other forms of minted legal tender.Coins of interest to collectors often include those that circulated for only a brief time, coins with mint errors and especially beautiful or historically significant pieces. Coin collecting can be...
- NumismaticsNumismaticsNumismatics is the study or collection of currency, including coins, tokens, paper money, and related objects. While numismatists are often characterized as students or collectors of coins, the discipline also includes the broader study of money and other payment media used to resolve debts and the...
- ExonumiaExonumiaExonumia are numismatic items other than coins and paper money. This includes "Good For" tokens, badges, counterstamped coins, elongated coins, encased coins, souvenir medallions, tags, wooden nickels and other similar items...
- Troy weightTroy weightTroy weight is a system of units of mass customarily used for precious metals, gemstones, and black powder.There are 12 troy ounces per troy pound, rather than the 16 ounces per pound found in the more common avoirdupois system. The troy ounce is 480 grains, compared with the avoirdupois ounce,...
(The system used with coins and precious metals. One troy ounce (ozt) is exactly 31.1034768 grams, about 10 percent more than the avoirdupois ounce, which is exactly 28.349523125 g.)