We have heard about grade inflation over the years when it comes to coins holdered by PCGS and NGC. For instance, coins in older slabs purportedly sell for higher prices because buyers think reholdering them will bring more value.
I don’t buy that coin dealer hype and have written about it a few times in Coin Update news. Here’s a 2011 article. In this one, I actually cracked open older holders only to receive the same or lower grades.
I’m not writing about that today.
Increasingly I am seeing bidders paying PCGS/NGC “sight unseen” prices for obviously substandard coins. These can be raw or holdered ones by lower-tier companies. Sometimes the auctioneer just throws out a high grade. Sometimes they add adjectives like “superb gem” or “super gem.” In worst-case scenarios, they add a PCGS/NGC retail value to one of these hyped coins.
Today we’ll look at some examples.
The above depicted 1896 Morgan dollar may have been cleaned and has rim marks on the cheek and hair. I put the grade at MS-63 and wouldn’t bid on it anyway because the surfaces lack luster and eye appeal (indicating dipping).
Here’s a closeup so you can see the flaws:
Now compare the grade here with a PCGS sample auctioned by the reputable Stack’s Bowers gallery:
You can clearly see the uptick in quality with the PCGS coin. Surfaces lack significant marks and details are sharp. The coin has good luster and eye appeal.
Another example of auctioneer hype is calling an inferior coin slabbed by a lower-tier company a “super gem” or, in this case, “superb”:
Here’s the auctioneer’s description, “superb gem:”
I grade this SGS coin MS-62, if that. All the pertinent fields, especially the cheek, have marks and hairlines. Again, let’s compare it to a PCGS example:
In both cases, the auctioneer can state that grading is subjective. I suppose they get a pass with that excuse. But when they attach a “sight unseen” PCGS/NGC value or Red Book retail price to it, they commit a more serious type of grade inflation.
Here’s such a case:
The value of this coin is decidedly not $2,500. I say it is silver melt, about $35-40.
Let’s look at the flaws:
It looks dipped. It not only has signs of wear in the upper-right devices; it has a significant rim gauge in the lower-left corner, rendering this ungradeworthy.
Again, let’s do a comparison with a PCGS MS-66+ sample:
The PCGS coin has clean surfaces, luster, and great eye appeal.
The sad fact is that newcomers to numismatics lack grading expertise and believe the hype. When it comes time to sell, as in the 1921 example above, they will demand exorbitantly inflated prices because that is what they paid, only to be told the grading truth: They overpaid for a lesser-value coin.
As for viewers here, this wouldn’t apply to you because you have dedicated yourself to learning about the hobby.
If you like a coin in an online auction and want to make a comparison with a PCGS/NGC-graded example, you should compare the auction coin to ones being offered by a reputable house, such as Stack’s Bowers, GreatCollections, or Heritage.
You can also access grading sites, such as PCGS Photograde Online.
100% agree with your comments. Me I going to wait till this balloon burst. Made me look at buying other coins I had never actually thought about buying.
Dan Waite says
Someone pointed me to an auction this past week in which this sort of thing was incredibly egregious, and when I saw that “MS66+” 1921 Morgan you posted, I figured it must have been from there, so I looked back at that auction to see if that coin was in there, and…. it wasn’t.
On closer inspection, though, I did find it in their previous auction!
J R Emery says
I agree… I have been a collector 60 years and dealer past 30+ years. I have experimented with third party services and found only 60 percent of the time they may agree.
It is best to do the research and learn about the area one has an interest to collect. Only choose what one likes in eye appeal and the pocket can afford. .
Value will come later but you could have many years of enjoyment from it.