Grading & Authentication

Professional grading services provide a valuable service to the collecting community by helping to standardize grading practices. Anyone who looks at enough slabs will learn a great deal about grading. Collectors who examine enough non-certified coins will soon detect consistent over grading by dealers. All of the grading services, PCGS, NGC, ICG, and ANACS provide this valuable educational service.

Much debate exists over which of these services is "best" at grading. Important aspects of their service include consistency in grading, seldom overgrading (being conservative) and the ability to authenticate accurately. Detecting problems with coins, particularly adjusted mintmarks and dates is also extremely important. The ability to detect cleaning, artificial toning, repaired and engraved coins also enters into the picture. I will not attempt to enter into this argument for this article. It is sufficient for this article to say that there are no night-and-day differences between the four main services, it is all fairly gray.

Overview

When someone gives you an opinion as to the authenticity or grade of a coin, there are several significant things you should pay attention to. First, what is the expertise of the person giving the opinion? Second, how much time do they spend in the authentication process? Even the most expert authenticator can make mistakes if he only spends a few seconds looking at a coin. Third, what does the authenticator stand to lose if he is wrong? If you ask for a free opinion, you might get what you pay for.

In the opinion game, a guarantee means if the opinion rendered is incorrect, the person rendering the opinion stands to take a loss. A full guarantee means that he takes the full loss. A guarantee of authenticity should guarantee the full value of the coin. A guarantee of grading should guarantee the difference in value between the stated grade and the actual grade.

Opinions vs. Guarantees

When someone renders an opinion, they risk their reputation. There is clearly value to an opinion. Especially when the person rendering the opinion has a significant reputation. This is, after all, all you get from Stack's or Heritage (with respect to grade).

When someone gives a guarantee, they are risking their money. Depending on the amount of money, this can be more or less important than reputation. As a matter of practicality, this means that when guaranteeing something more valuable (in terms of the guarantee), the services spend more time on forming their opinions.