Grading Services
As of 2010, there are two prevalent coin grading services: PCGS and NGC. 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.
Read more about this topic: Coin Grading
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