Coin grading

Coin grading is the process of determining the grade or condition of a coin, one of the key factors in determining its value. A coin's grade is generally determined by five criteria: strike, preservation, luster, color, and attractiveness. Several grading systems have been developed. Certification services professionally grade coins for tiered fees.

Overview

A "grade" measures a coin's appearance. There are generally five main components which determine a coin's grade: strike, surface preservation, luster, coloration and eye appeal. Grading is subjective and even experts can disagree about the grade of a given coin.[1][2]

History

U.S. coin grading has evolved over the years to a system of finer and finer grade distinctions. Originally, there were only two grades, new and used. This changed to the letter grading system beginning with the lowest grade – Basal State (also Poor (PO)), then continuing Fair (Fr), About or Almost Good (AG), Good (G), Very Good (VG), Fine (F), Very Fine (VF), Extremely Fine (EF), Almost or About Uncirculated (AU), Uncirculated (Unc) and up to Brilliant Uncirculated (BU). Gem Uncirculated was roughly equivalent in usage to BU at that time. Numerical grades from 1 to 70 now accompany the verbal grades.[3][4][5][6]

Systems

Early grading systems

The quality of all coins is not equal and collectors felt the necessity of defining the quality of the coins in order to assess their value. Rims, nicks, polishing, scratches and other forms of wear are considered factors in grading a coin. Also, if coins have been in some form of jewelry also affects the grading.

In the early years of coin collecting, three general terms were used to grade coins:

Sheldon grading system

As the collector market for coins grew rapidly in the late 19th and early 20th centuries, it became apparent that a more precise grading standard was needed. Some coins were simply more fine than others, and some uncirculated coins showed more luster and far fewer marks than others. Terms like "gem uncirculated" and "very fine" began to see use, as more precise grading descriptions allowed for more precise pricing for the booming collector market.

In 1948, well-known numismatist Dr. William Herbert Sheldon attempted to standardize coin grading by proposing what is now known as the Sheldon Scale. Sheldon's 1 to 70 grading scale, included in his book "Penny Whimsy", was originally devised for U.S. large cents but it is now applied to all series.[8]

European grading system

European countries use various, roughly equivalent, grading systems. The main features of their systems are presented in the following table:[9]

European Grading System
Adjective Design remaining United
Kingdom		 France Spain Italy German-speaking Europe Scandinavia Netherlands Portugal
Good 10% G AB (Assez Beau) RC M GE (Gut erhalten) 2 G (Goed) REG
Very Good 25% VG B (Beau) BC B (Bello) SGE (Sehr gut erhalten) 1- ZG (Zeer Goed) MREG
Fine 50% F TB (Très Beau) BC+ MB (Molto Bello) S (Schön) 1 Fr (Fraai) BC
Very Fine 75% VF TTB (Très Très Beau) MBC BB (Bellissimo) SS (Sehr schön) 1+ ZF (Zeer Fraai) MBC
Extra Fine 90% EF/XF SUP (Superbe) EBC SPL (Splendido) VZ (Vorzüglich) 01 Pr. (Prachtig) Bela
About Uncirculated 95% + some luster UNC No use No use No use UNZ− (Fast unzirkuliert) 01/0 No use No use
Mint State (MS-60 to 65) 100% + luster UNC SPL (Splendide) SC SPL/FDC UNZ (Unzirkuliert) 0 FDC (Fleur de Coin) Soberba
Mint State (MS-66 to 70) 100% + full luster FDC FDC (Fleur de Coin) FDC FDC (Fior di Conio) STGL (Stempelglanz) 0 FDC FDC (Flor de Cunho)

Certification services

Main article: Third Party Grading

Coin certification services emerged in the 1980s as a response to the need for buyers and sellers to agree on grading.[10] For tiered fees, certification services grade, authenticate, attribute, and encapsulate coins in clear, plastic holders.[11][12] Professional Coin Grading Service (PCGS), Numismatic Guaranty Corporation (NGC), Independent Coin Graders (ICG), and ANACS are the most popular and credible services, according to experts. These are the only services whose coins may be sold on eBAY, the largest rare coin marketplace.[13][14] All four firms guarantee the grades and authenticity of their certified coins. Together they have certified over 80 million coins.[15][16][17][18]

At each of the four main grading companies, a similar process is used. Each coin is graded (on a verbal and 1 to 70 numerical scale) and authenticated by two or more graders, and then assigned a final grade by a finalizer, based in part upon the recommendations of the prior graders. Depending on the company, various descriptors may be added, such as Full Bands for Mercury dimes, Full Bell Lines (FBL) for Franklin Half Dollars, or Deep Mirror Prooflike (DMPL) for Morgan dollars, and the coin's die variety may be noted. The coin is then slabbed and returned to the customer.[19][20][21][22] In 2010, PCGS and NGC introduced "Plus" grading for high-end coins graded XF45 to MS68. A plus symbol (+) is added after the grade.[23][24]

Certified Acceptance Corporation (CAC) is a Far Hills, New Jersey coin certification company started in 2007 by coin dealer John Albanese. For tiered fees of $12.50 or $25, the firm evaluates certain U.S. coins already certified by Numismatic Guaranty Corporation (NGC) or Professional Coin Grading Service (PCGS). Coins which CAC deems high-end for their grades receive green stickers. Coins which are at least high end for the next grade up are bestowed gold stickers. Coins considered average or worse receive no sticker. CAC maintains a free online Population Report and slab serial number verification service. Studies suggest that CAC-certified coins trade for premiums. Coins must be submitted to CAC via authorized dealers. CAC buys and sells CAC-certified coins via their affiliated trading network, Coinplex.[25][26][27][28][29][30]

In 2007, the rare coin industry's leading dealer association, the Professional Numismatists Guild (PNG), released the results of a survey of major coin dealers who gave their professional opinions about 11 certification services. PCGS and NGC were rated "Superior" overall, with ANACS and ICG deemed "Good". PCI and SEGS were listed as "Poor", while called "Unacceptable" were Accugrade (ACG), Numistrust Corporation (NTC), Hallmark Coin Grading Service (HCGS), American Coin Club Grading Service (ACCGS), and Star Grading Services (SGS).[31][32][33]

Counterfeit NGC and PCGS holders have been reported, but significant measures have been taken by both services to remedy the problem, such as NGC's use of photographic verification for every coin certified and both services' employment of serial number verification and anti-counterfeiting features in their holders.[34][35][36][37]

See also

References

  1. ↑ Winter, Doug (2001). "The Five Components of Coin Grading".
  2. ↑ Travers, Scott. "Introduction". coingrading.com. coingrading.com. Retrieved 2015-09-09.
  3. ↑ "NGC". ngccoin.com. NGC. Retrieved 2015.
  4. ↑ "PCGS Coin Facts". pcgscoinfacts.com. pcgscoinfacts.com. Retrieved 2015-09-05.
  5. ↑ "ANACS". http://www.anacs.com/. ANACS. Retrieved 2015-09-05.
  6. ↑ "ICG". icgcoin.com. ICG. Retrieved 2015-09-05.
  7. ↑ Androulakis, Yiannis. "Coin Grading Standards".
  8. ↑ Sheldon, William H. (1990). Penny Whimsy. Sanford S. Durst. ISBN 0-942666-62-3.
  9. ↑
    "Grading Standards".
  10. ↑ "Coin Grading Systems - The History of Coin Grading Scales". About.com. Retrieved 13 December 2009.
  11. ↑ "The History of Rare Coin Grading". Austin Gold Information Network. Retrieved 26 August 2009.
  12. ↑ "Coin Grading Services: Who They Are and What They Do". coin-collecting-guide-for-beginners.com. Retrieved 26 August 2009.
  13. ↑ "PNG, ICTA Announce Results of 2006 Grading Services Survey". pngdealers.org. Professional Numismatists Guild. Retrieved 2015-09-07.
  14. ↑ "Coins Buying Guide". ebay.com. eBay. Retrieved 2015-09-05.
  15. ↑ "NGC". ngccoin.com. NGC. Retrieved 2015.
  16. ↑ "PCGS Coin Facts". pcgscoinfacts.com. pcgscoinfacts.com. Retrieved 2015-09-05.
  17. ↑ "ANACS". http://www.anacs.com/. ANACS. Retrieved 2015-09-05.
  18. ↑ "ICG". icgcoin.com. ICG. Retrieved 2015-09-05.
  19. ↑ "NGC". ngccoin.com. NGC. Retrieved 2015.
  20. ↑ "PCGS Coin Facts". pcgscoinfacts.com. pcgscoinfacts.com. Retrieved 2015-09-05.
  21. ↑ "ANACS". http://www.anacs.com/. ANACS. Retrieved 2015-09-05.
  22. ↑ "ICG". icgcoin.com. ICG. Retrieved 2015-09-05.
  23. ↑ PCGS Secure Plus Service
  24. ↑ NGC Launches Plus Designation
  25. ↑ "Certified Acceptance Corp. plans fee increase". coinworld.com. Coin World. Retrieved 2015-09-12.
  26. ↑ Roach, Steve. "The value of a CAC sticker". coinworld.com. Coin World. Retrieved 2015-09-12.
  27. ↑ Ferguson, Mark. "Comprehensive Market Study". coinweek.com. Coin Week. Retrieved 2015-09-12.
  28. ↑ "Certified Acceptance Corp. plans fee increase". coinworld.com. Coin World. Retrieved 2015-09-12.
  29. ↑ Roach, Steve. "Mysterious CAC gold stickers". coinworld.ccom. Coin World. Retrieved 2015-09-12.
  30. ↑ "CAC". caccoin.com. CAC. Retrieved 2015-09-05.
  31. ↑ "PNG, ICTA Announce Results of 2006 Grading Services Survey". pngdealers.org. Professional Numismatists Guild. Retrieved 2015-09-07.
  32. ↑ "NGC". ngccoin.com. NGC. Retrieved 2015.
  33. ↑ "PCGS Coin Facts". pcgscoinfacts.com. pcgscoinfacts.com. Retrieved 2015-09-05.
  34. ↑ "PCGS Announces". coinweek.com. Coin Week. Retrieved 2015-09-16.
  35. ↑ "NGC Confirms Counterfeit Replica Coin Holders". coinnews.net. Coin News. Retrieved 2015-09-16.
  36. ↑ "NGC". ngccoin.com. NGC. Retrieved 2015.
  37. ↑ "PCGS Coin Facts". pcgscoinfacts.com. pcgscoinfacts.com. Retrieved 2015-09-05.

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