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What You Really Get From A Grading Service

Tom Becker


Prior to the proliferation of third party grading services, I knew of a dealer who added to his marketing strategy by guaranteeing to buy back any coin he sold at exactly the same grade he used when selling it. As long as the coin remained sealed in it's original holder, what he sold as a MS-65 would be a MS-65 when the investor wished to sell it-and there was no time limit on this guarantee.

This promise immediately generated significant new business for the dealer. At the time, it wasn't unusual for collectors and investors to find that when they went to sell coins opinions about the grade could vary from one dealer to the next. More often than not, the potential buyer wanted to give the coins a lower grade. For some who had read this special dealer's promotion his grading guarantee would provide the security and assurance they had been looking for.

In time, what many of this dealer's customers discovered was that their guarantee of grade meant nothing. Because it wasn't combined with a guaranteed price based on a verifiable indicator of current market value, the dealer could offer whatever he pleased for the coins he sold.

When word spread that this dealer's “grading guarantee” was worthless his business suffered. Instead of finding his mailbox filled with orders it now contained complaining correspondence from irate customers or carefully worded demands from lawyers. In response, the dealer simply went out of business to resurface using a corporate name that offered no clue as to his identity.

As mentioned at the beginning of my story, this event happened prior to the establishment of third party grading services. Please understand my telling of this incident in no way suggests such a marketing tactic has been used since.

The best any grading service can hope to provide is an opinion of grade based on the skill of those grading the coins combined with instruction from the management and ownership of the grading service.

Admitting to potential ignorance, I'm not aware of any current grading service that both guarantees their opinion of grade will never change and who also promises to purchase any and all coins they have graded at a guaranteed price based on current indications of market value as reported by a specific pricing guide. I've wondered why a dealer or group of dealers hasn't attempted to create such a multi-purpose grading service offering such significant and meaningful guarantees.

At least for now, it might be best for all concerned to recognize that what is being offered by any grading service I know of is an opinion. If you are expecting more you may be disappointed.

 

Tom Becker is a regular contributor to the Canadian Coin Reference Site, you can direct your questions directly to Tom easily by E-mail:tom@tombeckeronline.com or visit Tom's website @ http://www.tombeckeronline.com

 




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