Coin Grading Services
Raymond F. Hanisco
 

Coin Collectors love to talk about there coins, especially to other Coin Collectors. It is a like sports fishermen talking about fishing. You hear about the Big One or about the one that got away, but when you talk to a fisherman from different parts of the United States, one will soon realize that each section of the country has its own way of measuring their trophy fish. It seems some measure by length and others by weight. The same type of thing holds true in the grading of coins. What one Coin Collector grades as a Very Fine, another will call an Extremely Fine. There is really nothing wrong with that except when it come time to sell a collection, then both parties need to arrive at some sort of common consensus in grade which relates directly to money. This common consensus in grade is especially important when applied to a scarce or rare coin because just one step in grade could mean the difference in thousands of dollars. It is out of this need that allowed for the establishment of the Coin Grading Services. Once a Coin Collector advances to the point of considering acquiring coins that have been graded and certified by a grading service, they will be faced with a plethora of grading services. Is there a difference? Is one better then another? What is a collector to do?

Welcome to my jungle. It seems that once one becomes involved in Coin Collecting, one will find it is a never ending process of learning. Before I begin to guide you through the alphabet jungle of grading services, I would like to preface my remarks. I understand that this website has a fairly wide readership. I know this from the emails I receive. In the process, I may leave a grading company or two out, and I may offend some
grading services, or someone's opinion of a grading service, but remember, likes or dislikes of one particular grading service or another is an opinion, and opinions can change. It is just like the grading of coins, it is subjective and an opinion, and it can change. Cutting through the political correctness, what I am saying is this: if a company does not receive a stellar review, and they are offended, then strive to become better and make the Coin Industry, as a whole, better for both the professional and the collector. Now, let's get on with the show!

There is an unspoken three tier system of grading services within the coin industry, and grading services have been placed into these tiers by Coin Dealers. How does the average Coin Collector know into which tier a grading service has been placed? They don't, not until it is time to sell their coins. That is when they may find out a particular cherished coin may not be what they thought it might be. Don't get me wrong, for a scarce or a rare coin at the time of sale, any grading service is better then a raw or non-graded coin. At the time of the writing of this article, there are four grading services that are considered tier one companies. I know not everyone will agree with this assessment, but these companies have withstood the test of time, and/or have proven themselves within the industry as conforming closely and strictly to the standards and norms of grading. These four companies are PCGS, NGC, ANACS and ICG. I wish I could say that politics within the Coin Industry does not exist, but I would be lying. Politics exists in every industry, and those who conform to, and work within the structure, rise to the top. Here we go into the alphabet jungle.

PCGS (Professional Coin Grading Service) fulfilled the demand when the mass appeal for graded and certified coins surfaced among Coin Collectors. It was established in 1986 under the direction of David Hall, one of the big guns in the Coin Industry. It was PCGS who set the standards and norm for the grading and certification of coins. Throughout the years, PCGS has become a part of a much larger entity called Collectors Universe, whose has taken on the grading and certifying of a whole host of collectibles, e.g. stamps, currency, sports cards and autographs just to name a few. The President of PCGS is Ron Guth, author of Coin Collecting for Dummies, along with many other publications. PCGS has a very large and loyal following within the Coin Industry, and is considered one of the best for authenticating and grading coins. A criticism sometimes heard within the Coin Industry is that since David Hall is the involved with a retail coin company, then he can have coins graded at his direction to personally benefit him. Personally, I believe that any top company is a target for negative press. Most of the largest Coin Dealers in the United States, and throughout the world have great trust in the grading of PCGS. From my personal experience, it seems to me that the only Coin Dealers I have heard touting that garbage are those who do not want to pay the slightly higher price PCGS Certified coins demand, or for that matter, the slightly higher price any tier one grading service coins demand. It cuts into their profits.

NGC (Numismatic Guaranty Corporation) was founded in 1987. NGC provides a great deal of competition for PCGS. NGC has been given the honor as being the current Grading Service of Choice for the ANA (American Numismatic Association). They are highly regarded, and respected within the Coin Industry, as well as having a very loyal following among Coin Collectors. Top Coin Dealers within the United States and throughout the world inventory and offer NGC Certified coins to their customers. (Editor's Note: I consider both NGC and PCGS to be equals in grading and certifying coins.)

ANACS (American Numismatic Association Certification Service) opened their doors for business in 1972. One could say ANACS wrote the book on grading coins, and provided a valuable service for Coin Collectors when there was no one else to provide such a service. Originally associated with the ANA (American Numismatic Association), ANACS no longer enjoys that relationship, and is a stand alone grading service. The company did struggle for a couple years, but seems to be back on track. In a recent conversation with the President of ANACS, James Taylor, this editor was told that ANACS has just hired one of the big names in coin grading to help oversee their operations. Mr. Taylor also told me ANACS will have a surprise for Coin Collectors which will be announced officially in January 2006. He made me promise not to reveal it to my readers until that time, but he was seen at the most recent Baltimore Coin Show doing a little advanced PR work among the Coin Dealers.

ICG (Independent Coin Grading) is one of the newer companies in the coin grading field. Established in 1998, ICG came on like gang busters. ICG seems to be a good solid grading service. They provide services to Coin Collectors that the other tier one grading services do not, e.g. the grading and certifying of ancient coins. Being one of the newer grading services, ICG is working hard to establish its place among the top companies in the grading services field. ICG has been bucking the system a little, and has created a few waves in what is otherwise a clam sea. Some Coin Dealers see this as an unwanted disruption, but is it? Could it not be that ICG is just stepping forward and taking the lead to provide an expanded service for Coin Collectors where other grading services are slow to move. What some Coin Dealers fail to realize is that it is the Coin Collector who makes the market, not the other way around.

These are the top four companies in the field of grading services. If you asked any of the major players, either Dealers or Collectors in the Coin Industry, they would tell you pretty much the same thing. There are many other companies out there, but they seem to fall a little short in one aspect or another from what these four are doing. Some of them are only a short step away from a tier one company, and some just do not get it. It does not mean that I would not own a coin graded by other then a tier one company because I do, but all things being equal, in general, I would rather a tier one graded coin over any other, especially at the time of sale.

Here is a list of some of the other coin grading services you'll see in the market place. Please notice that some of the company names or initials are very similar to some of the tier one companies, and each other.

ACG - ASA - Accugrade

ACGS - American Coin Grading Service

AGS - American Grading Service

CCGS - Capitol Coin Grading Service

DCGS - Digital Coin Grading Service

FSC - Fiducial Select Capitol

GCS - Global Certification Service

MCCS - Millennium Coin Certification Services

NNC - National Numismatic Certification

NSCGS - New Standard Coin Grading Service

NTC - Numis Trust Corporation

NGS - NuGrade Service

NGS - Numismatic Grading Service

PCC - Premier Certified Coins

PCGA - Premier Coin Grading and Authentication

PCI - Photo-Certified Coin Institute

PGS - Professional Grading Service

SDGS - Silver Dollar Grading Service

SEGS - Sovereign Entities Grading Service

SGS - Star Grading Service

TGS - TruGrade Service

So, now that I have completely confused you with the abundance of coin grading services within the Coin Industry, why would a collector want a graded and certified coin? Let's keep in mind the actual goal of any Coin Collector, and that is the end game, or the sale of your coins sometime in the future. In any collection there are coins that are called key date coins. A key date coin is not necessarily the coins with the lowest mintage, but are the coins that are the most difficult to obtain. These key date coins are most likely the ones that carry the greatest value to them, and will actually carry a majority of the value of the entire collection. A good example of this is a coin collection that I recently evaluated for a collector friend of mine. The total value of the collection was just slightly over $30,000.00, however a majority of the value of the collection was in only 14 coins within that collection. For an investment of under $500.00 to have those 14 coins certified and graded by a tier one grading service, that collector was able to increase the value of the collection by $5,000.00. In my mind, that not a bad increase. I'm not saying everybody will gain that kind of increase, it will vary according to what kind of coins you collect, and the grade assigned to those coins.

The next question one may want to ask is, why would I want to have my coins graded by a tier one company instead of a tier two or tier three company? This question is an easy one to answer. They make fewer errors. Yes, it is true, there are mistakes made in grading, even by the tier one companies, but they seem to error with much less frequency. I am not saying that some of the tier two or tier three companies don't do a good job, but what must be considered by the collector is that some of the lower tier companies have a tendency to assign a higher grade to a coin then a tier one company would. Coin Dealers know this and will compensate for coins they purchase accordingly. As a Coin Collector, you should be aware of this as well. You should not pay the same price for a coin graded by a tier two or three company as you would for a tier one graded coin with all things being equal. Sometimes you can negotiate with a Coin Dealer when buying a coin graded by a second or third tier grading service. Here's how. You have found that special coin for which you've spent years searching; it is graded by a second tier grading service; and, you cannot get the Coin Dealer to come down on his price. What do you do? Talk to the Coin Dealer. Tell him you are willing to pay his full price with a condition. You'll submit the coin to a tier one grading service, at your expense, if the coin comes back at the same grade...the deal is done. If the coin comes back at a lower grade, then the Coin Dealer will refund you the difference between the price you paid and the price of the lower grade coin plus the cost to have it graded. Get it in writing, on your receipt. Any good, fair and honest Coin Dealer will take the deal. If he doesn't, there is something wrong, and you should walk away. This technique is especially easy to do at a major coin show since most of the major grading services offer express service at these shows.

There are many benefits to owning graded and certified coins. For the average Coin Collector, you do not need all your coins graded and certified, but you should consider submitting the key date coins. As you grow within your hobby, it may be necessary to acquire higher quality pieces that are graded and certified. There is not a specific Coin Industry standard that says what requirements a company has to meet to be considered a tier one, two or tier three grading service company. It is a general feeling within the industry, or it is not spoken about, addressed or acknowledged to exist to the general public, but it is very real. Be careful in what coins you purchase, and keep an eye on the end game.