Some Coin Update viewers are skeptical about third-party grading services, writing us with concerns about subjective grading, cost of services, and loss of the feel of precious metal in your palm. These are valid points to a degree; but they also miss the mark in contemporary collecting. You realize this when you pay premium prices for a counterfeit coin with plenty of heft in your palm because it is overweight and made in China.
Third-party grading became popular about 30 years ago as a hedge against overvalued seller coins. Talk about subjectivity! For those who remember those days, you don’t have to take a nostalgic walk down numismatic lane. You can find over-graded self-slabbed coins in online auctions. Here’s an example (more on that soon in Coingrader Capsule):
The lot description for this coin was MS67. It also actually cited a PCGS price for an MS67 of $14,000–a dubious practice, by the way, for any non-PCGS coin–for what looks like a heavily bag-marked, perhaps cleaned, 1902-O Morgan. I would not bid on this coin, believing I could buy this Morgan dollar for $30 at my local coin shop. It sold for $360 with buyer’s premium.
The top holdering companies–PCGS, NGC, ANACS and ICG–provide reliable grades within a point or so of each other, often because of slightly different grading criteria. But subjectivity is limited to a point here and there or a judgment call on full bands, cameos, artificial color, DMPLs and the like.
In addition to providing reliable grading, these third-party grading companies guard against counterfeits. These companies also want to provide an appealing label design and sturdy holder that is less prone to scratching as older models.
The new PCGS holder takes all of that into account.
Photo credit: Professional Coin Grading Service
The holder is completely redesigned and used now on all submissions certified by PCGS. According to the company’s news release, “an important addition to the new PCGS holder and enhanced label is a Quick Response Code that links directly to the online cert verification of the coin.” The company’s Secure™ Service” also provides additional security with micro-text and color shifting features.
Other security features include additives in the embedded hologram and label to verify authenticity of the new holders and a code that links directly to PCGS’s online verification page.
What we found most intriguing is the new blend of crystal-clear, scratch-resistant plastic, so airtight that PCGS has been showcasing the holder in a fish bowl with a betta, otherwise known as a Siamese fighting fish, perhaps an unintended symbol that the company intends to fend off those Asian counterfeits.
To see a video by PCGS President Don Willis click the photo above featuring the betta in the bowl.
In an interview with Willis, he addressed questions that Coin Update viewers might have in mind. I also interviewed the other grading services about their holders, especially the scratch-resistant feature.
COIN UPDATE: The previous holder was prone to chipping on the edges. Has this been corrected in the new holder?
WILLIS: In designing the new holder we evaluated dozens of plastic formulas to find the optimum formula for clarity, scratch resistant and durability. We also needed to be able to crack out a coin, however that process had to destroy the holder. We actually tested a couple of formulas that were nearly unbreakable, however we decided they were not practical. The new holder can be chipped or cracked, it’s just much more difficult. The dimensions of the holder did not change but we also changed the design of the holder to make it a little sturdier and strengthen the areas were chipping would occur. We believe the reformulation and design change best meets all of our criteria.
COIN UPDATE: We noticed the scratch-resistant feature right away. Some competitors charge extra for that feature. What was the thinking with the new holder, providing it for all submissions?
WILLIS: Holders getting scratched is an age old problem that we wanted to address. We improved scratch resistance, but the new holder still is susceptible to scratching under the right circumstances. Again you have to consider other factors as well such as clarity. The new holder is much more scratch resistant than our previous holders.
COIN UPDATE: Will there be a price change because of the development of the new holder?
WILLIS: The new holder will not affect our pricing in any way. Believe it or not, holders are one of the most challenging aspects of our business, however we do not believe that our customers should have to pay for improved clarity or scratch resistance. We are simply trying to provide a better product.
COIN UPDATE: We’re interested in the features to counteract counterfeits. Can you provide some information about the proliferation of counterfeits?
WILLIS: There are several types of counterfeiting of which the biggest threat are those coming from China. My understanding is that there are six factories in China that produce counterfeit coins. The Chinese are also now counterfeiting holders. The Chinese continue to get better at counterfeiting and they are constantly probing legitimate holder design looking for any areas of weakness. Physically we have redesigned our holder to be nearly impossible to break apart without being destroyed. So the new holder has additional physical security. We also added several overt and covert security features. One of the most important new security features is the introduction of specially formulated trace element in the plastic formula. It can only be detected by specially calibrated hand held devices. A positive reading indicates a good holder. There are several other features that we do not want to disclose at this time but they are already in the holder. We hope the new holder has enough security features to stay ahead of the counterfeiters for a long time.
Coin Update also posed some questions to NGC about its holder and the added $5 fee for enhanced scratch-resistant features (offered free on higher levels of service).
NGC is working continuously on holder design, said Scott Schechter, vice president. New developments and enhancements are forthcoming.
“I’ve heard about new holders made from ‘scratch-resistant plastic.’ I’m not exactly sure what this means,” he stated, “but I believe that it is very different from the UV-cured coating that is applied to NGC holders for scratch resistance. Our original vendor had never worked on a packaging product before the NGC holder; rather he had only applied this coating to prescription eyeglasses!
“Currently, the curing times and costs make it impossible for us to extend this product across our entire product line,” he added. “While the scratch-resistant coating is superior; our standard holder design, plastics and our packaging materials all serve to minimize scratching. The holder options are more of a choice between ‘better’ and ‘best’ than anything else.”
Schechter noted that NGC developed its holder for the Smithsonian. It was “independently tested and approved by them, is made from the same exact materials as our standard production holder. When it comes to protecting a coin, which is arguably the most important factor, we’re very confident about the long-term performance of our holder.”
To learn more about its top-of-the-line holder, “the EdgeView®,” click here.
While NGC charges a modest fee for its best holder, Schechter noted, the company images every one of its coins. “These images can be viewed using our online certification verification tool or mobile app. This is a free feature at all service levels.” (PCGS charges a $10 fee for TrueView™ imaging, which provides obverse and reverse photos at several levels of picture size.)
Paul DeFelice, vice president at ANACS, noted that his company’s holder is scratch resistant and tamper-evident, “in that it shatters” when someone attempts to open it. He noted that ANACS also is concerned about counterfeits–“we see dozens each day”–and that consumers can purchase ANACS coins “with confidence knowing that the company with the best experts available evaluated each coin and guarantee.”
ICG also was sent a series of questions about its holder. A company representative wrote:
“We would not charge an extra fee for a ‘scratch-resistant’ service that keeps our slabs (and the customer’s collectible) looking the best it possibly can. As scratch-resistant is not a guarantee against possible marks or damage, we even offer a free reholder service for slabs that have been scuffed or otherwise damaged.”
ICGS also recently changed the method of adding the hologram to holder. “Many customers complained about damage to the hologram caused by stickers when it was being heat stamped onto the plastic, so we now place it inside the holder with a special tamper evident sticker to protect it.” There have also been additional security features added to the ICG holder, to discourage counterfeiters.
In the end, each of the top holdering companies in their own ways are tending to the three factors that showcase a premium holder: elegant design, counterfeit detection, and scratch-resistant plastic.