Coin Doctoring and Gradeflation

David Hall of PCGS at The ANA's National Money Show announced that coin doctoring and gradeflation no longer will be an issue. All coin
images will ne digitized and kept on file. Re-submissions will be checked against the image on file to see if the coin was subject to an artificial enhancements.

New holders are called "Secure Plus". The new sercive has three main points:

1. New hardware and software technology will create a "digital fingerprint" of the coin. This will allow graders to recognize when a coin has been re-submitted. Looking at old and new images of the coin will allow graders to see if the coin has been "doctored".

2. A 700 point grading scale will select premium grade (about 30%) coins and add a plus sign (+) as part of the grade on the holder. The plus designation will be used on coins XF-45 to MS-68, however MS-60 and MS-61 will be excluded.

3. Increased liquidity, higher value, and sight-unseen trading of PQ coins.


NGC will have plus coins within the next sixty days.

What about CAC coins?

It all sounds interesting. Soon we will be talking about AU-587 vs
AU-691. Maybe they will sell the computer software so we too could deal on a 700 point scale.

John Armonas

The positive side to this is that counterfeit coins and holders will be detected much easier. The bad part is that the plus designation adds more confusion to an already imprecise grading process. All it will do is give dealers more excuses to charge more for coins.

Well, from my perspective working in a coin shop, I think this might help explain to customers why coins from the same grading services that have the same grade, date, and mintmark are priced differently. But, I think if you're at all familiar with the numismatic market, you should understand that coin grading is subjective, and the quality of same-grade coins can vary greatly.

I actually touched on this topic in my "Rules of Coin Shop Etiquette" article (see link at the bottom;)):

Comparing same-grade coins is NOT comparing apples-to-apples – Often, coins of the same date and mintmark graded the same (even by top grading services), vary greatly in appearance (eye-appeal), wear, luster, and detail. Instead, think of a coin's grade as you would a car's mileage. If you have two identical cars that both have 120,000 miles—one in day-to-day trips to-and-from work with maintenance done every 10,000 miles, and the other in rugged, off-road, mud-pit driving, with no oil changes ever—there will be differences in the quality of the vehicles, regardless of the mileage.

I do like the idea of the "digital fingerprinting" though--aren't they doing that to your face at the DMV??

We'll see how well this goes over...


expertclick.com/NewsReleaseWire/Rules_fo..._Eyes,201031278.aspx

I read with interest your article on "Rules for Coin Shop Etiquette". It is written as seen through a Dealer's Eyes. From a customer point of view I agree with most of your points. So far I did not have a chance to visit yout store so the comments do not apply directly to your coin shop.

The coin dealer is the professional. If a customer brings coins for sale, should not the dealer offer the price for them instead of asking "What do you want for these coins?" We, the customers are the amateurs. Otherwise, the scene becomes from a used car lot.

If to a dealer MS-64 (PCGS or NGC) coin looks like a MS-65, due to an "eye appeal" and is priced high, why is it inappropriate to ask for a MS-64 price or something in between? "The prices are firm" should leave some wiggle room. Nothing is set in stone. The "eye appeal" is subjective.

Most of us receive The Graysheet and can lookup prices at PCGS, etc. The Graysheet reports dealer-to-dealer wholesale prices, however the real wholesale prices come out when one tries to sell coins.

For example, at present I am trying to sell off the rest of my USA Type Set in order to concentrate on the CC coins. Twenty coins in PCGS and NGC holders. According to The Graysheet the value is around $4,000.

We have two coin shops in town. Both coin dealers belong to our coin club. One dealer quoted $2,650 for the lot another $2,500. I am sure they are not trying to cheat me, but it shows that the wholesale market is way below The Graysheet prices.

When one is aware that the retail price and the wholesale price are miles apart, why not indulge into some barganing with the dealer.

Do not take it personally, this is my observation from experience.

John Armonas

"Theft & Counterfeits Plague Market" was a headline in April 9, 2010 the Coin Dealer newsletter.

A California dealer has reported purchasing $70,000 in "sandwiched" counterfeit Morgans. Other reports have involved real Cartwheels in counterfeit holders.

One example was an 1891-CC graded PCGS MS65, overgraded in a fake slab.

PCGS Secure Plus will not run CAC out of business. CAC's acceptance is growing. Many dealers and customers see CAC as a positive force on the market and are willing to pay 15 to 20% more for CAC stickered coins.

John Armonas

I haven't read up on this Secure Plus procedure. Are all coins encapsulated by PCGS going to be imaged? I thought I heard there was a threshhold of value where only coins above a certain value would be imaged.