When sellers use the word “gem,” they essentially mean MS-65 on the 70-point Sheldon Scale. The problem is, few “raw” or unholdered coins actually would earn that designation if evaluated by a top grading company.
Typically in my Coin Update columns, I bid on raw coins, evaluate their condition, and then submit them to PCGS to ascertain our respective grades. After two decades of doing this, I am relatively confident about my assessments, and so I do not bid on problem lots in estate and online auctions.
Increasingly on HiBid, eBay, and Proxibid, fewer auctions feature premium unholdered lots. Each week I see junk coins (mostly silver melt) and hyped coins by lower-tier grading companies. As I have mentioned in several previous columns, bidders waste hobbyist funds by believing consignor or auctioneer statements about grade.
I discourage bidding on these popular platforms if you aren’t a skilled grader. Best to wager on coins slabbed by PCGS, NGC, ANACS, and ICG. You can find hundreds at Great Collections, Heritage, or Stack’s Bowers.
In the past week, I evaluated hundreds of raw Morgan dollars in several HiBid auctions and found none worth a bid.
Morgan dollars have large planchets so that flaws are easily discerned.
A gem Morgan dollar has a clean cheek and few, if any, marks in the ample fields, as in this example:
Below I’ll display several examples of problem coins billed as “gem,” describing details.
1885-S “Gem” BU
The 1885-S Morgan is a semi-key in the series with a mintage of 1,497,000, with MS-65 samples selling retail at $2,250. Compare the raw obverse here with the earlier PCGS one.
As you can see, I noticed a stain, pin scratch, cleaning, wear, and hairlines — a combination of rubs and slider marks from an album. I couldn’t tell without the coin in my hand, but it looked like it had been dipped.
I doubt this would grade because of the flaws. At best, this might be worth a $75 bid. It will probably go for hundreds because of buyers’ lack of numismatic knowledge.
The first issue with this coin is the lack of luster and eye appeal, which is taken into consideration during grading. This coin has been cleaned and dipped. Morgan dollars are known for their reflective “cartwheels,” reflecting light as if in a circular motion when tilted. This has no reflectivity.
You should always expand photos if the option allows, and when I did this coin, I noticed an altered cheek with telltale signs of pock marks and smoothing. There are splotches of wear, too. At best, this is Almost Uncirculated. Given the flaws, it is hardly worth $265. In my view, this is a $35 coin.
1879-S, Reverse 78 Super Gem
This rarer variation of the 1879-S with an 1878 reverse is always worth a look, as these sell for substantial sums in Uncirculated condition. The auctioneer pegs this as a supergem worth $52,500. He’s using PCGS retail prices on a raw coin, an unethical practice in many numismatic circles.
Here’s a PCGS depiction of the reverse variation:
The above coin does have the 1878 flat breast. It at least has that going for it.
Again you can see that this coin has been dipped, stripping any luster or eye appeal. There are indications of wear. But the coin does look Uncirculated.
The obverse, however, has several flaws.
The scratch alone would render this ungradeworthy at PCGS. But there is also damage on the neck, altered cheek, and signs of cleaning.
I would never bid on such a coin, but if I had to, it would be $50, not $52,500.
I almost bid that much on this 1898-O Morgan, a common coin, but still worth $250 at MS-65. It appeared to live up to that condition.
However, I have learned to expand the photo before placing any bid. If the auction site lacks a photo expansion feature, just copy the image and expand it in your photo application, which I did here.
I have been seeing far too many coins on HiBid that have been altered, smoothed with a tool, or contain telltale rubs. This stands a 50-50 chance of grading at MS-63+ or perhaps MS-64 on a good day. I’m not interested in those odds. This might be worth a $45 bid because there is an 18% buyer’s fee and $20 shipping.
Recent auction prices for an MS-64 PCGS-holdered 1898-O Morgan average around $95. If won with a $45 bid, the total cost would be around $73. Then add $40 slabbing fee, and you’re already over the auction average.
An MS-64 at retail for this year is $165. While this might look like a good deal, I’ve learned from years slabbing coins that expert graders at PCGS or NGC may spot flaws that I have overlooked. That’s why I bid conservatively or not at all.