Grading Firms Provide a Valuable Service|
September 05, 2012
This article was originally printed in Coins Magazine.
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It was 1993 and our numismatist was walking the bourse at the Bay State Coin Show in Boston. He had just moved to New England, and was excited to be attending a premiere coin show.
The show was all that he had hoped for, especially the large number of dealers who had early American copper. The early American copper pieces were a joy to behold. It was obvious that thrifty New Englanders had collected these pieces and put them away for posterity.
Walking the bourse, he spied an specially nice 1871 Indian Head cent. While not the key coin for the series, it was still a difficult coin to find, especially one that had not been cleaned or damaged.
The dealer understood his concerns and affirmed that the coin was indeed original and offered to return his money unconditionally if he discovered any issues while at the show. With that said, the deal was consummated.
The coin was shown to other dealers, who all agreed that the coin was original and that it had been fairly graded. One dealer who viewed the coin offered the following advice:
“You obviously want Indian Head cents that meet your strict conditions. I would suggest that you start buying certified coins. I see certification as the wave of the future.
“Folks are going to be more insistent on coins that are graded accurately. They are also concerned, as you are, about counterfeits or altered coins. The old handshake method isn’t going to be enough.
“Mind you, I’m talking more about coins that are hard to come by and that approach a dollar threshold where certification is crucial.”
Our numismatist thanked the dealer for his advice. He, of course, knew about the whole idea of certified coins or what was called third-party grading.
The name came from the concept of the seller being the first grader and the purchaser being the second grader. When the two did not agree, a third party was often brought into the process, be it another dealer or collector, to venture their opinion. Of course, the third party might not be without bias toward either one of the parties.
Sending a coin off to someone else who didn’t know the coin or the people involved was a solution. Having the coin certified would make it easier to sell and value coins.
For our numismatist the issue didn’t resonate with him. First of all, he had spent years acquiring Indian Head cents and he certainly knew how to accurately grade them.
He could easily spot coins that had been cleaned or altered to improve their appearance and grade. Counterfeits back then were usually poorly executed.
He had been proficient at picking up added S mintmarks on the 1909-S key date. He had also spotted coins where the dates that been changed from common dates to key and semi-key date coins, such as the pricey 1877 key date.
Spending money to send a coin off for certification seemed to be a waste of money. This was diverting money that he could spend on acquiring more coins.
Well that was 1993, and the numismatic world has changed. Dealer cases are usually well stocked with certified coins.
There are still strong opinions about the pros and cons of third-party grading. Some folks feel that coin certification is too expensive and it only drives up the cost of the hobby, which discourages new people from coming into the hobby.
There are others who feel that the certification companies have been beneficial. My fellow collectors and I are all supporters for certification. We often talk about how it would be the Wild West if it weren’t for the certification companies.
The flood of counterfeits coins has been scary. The certification companies have given us a sense of security in their vigilance and education efforts.
There is a place for both certified and raw coins in the hobby. Not all my coins are certified. I still buy raw coins.
I have my personal guidelines for certification. These include the value of the coin and the need to protect it. It doesn’t make sense to spend $20 or so to certify a coin that is only worth a few more dollars.
If the coin is important to my collection in terms of value and scarcity I’ll probably have it certified.
Additionally the surrounding plastic encasement (the slab) protects those important coins from physical or environmental damage. It’s comforting to know that the coin I have pursued and purchased has been certified as to its authenticity and grade.
While I wholeheartedly support certification, remember as I and others have said, “Buy the coin, not the slab.” Buying just any coin because it’s in a slab doesn’t make sense. You want a coin that meets your requirements as to appearance and grade. Your ideal coin may be raw or in a slab. Talk to other collectors and get their opinions on certification. The more you know the better your decision.
More Coin Collecting Resources:
• State Quarters Deluxe Folder By Warmans
• Subscribe to our Coin Price Guide, buy Coin Books & Coin Folders and join the NumisMaster VIP Program
• Strike It Rich with Pocket Change, 2nd Edition
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