Collectors at one time or another typically ponder whether coin certification is worth the costs involved. Typically these collectors have purchased raw material from a variety of sources, or found examples in pocket change. This article is intended to give basic advice to such individuals, in hopes of clarifying the benefits of certification and when such certification may be necessary.
To begin, the collector must look at his annual coin budget. Hopefully, he/she has been keeping records. Details of each coin purchase is helpful on a number of levels. If the collector's budget is a few hundred dollars a year, certification is typically not undertaken, though part of the collection may include coins previously certified by the former owner. In such a case the owner may be tempted to remove the coin from the holder, freeing it to match the remainder of the collection. In most cases, while tempting, this is not recommended.
If the collector's annual budget is in the thousands of dollars, it is time to consider certification. If the collection has an aggregate value in the tens or hundreds of thousands of dollars, it is certainly time.
While we all believe we will live forever, reality and the daily news emphasizes our mortality. Consider how your collection will be dispersed should you suffer an untimely death. In this case certification will be a final blessing you can leave your loved ones. Typically those that inherit do not share your passion, and thus will likely wish to convert your collection into cash. Let us assume you have kept your spouse and/or significant others somewhat knowledgeable of your actual cash outlay over time. It is imperative for these people to be able to easily find your records, documenting your collection and funds expended. Booklets such as The Rare Coin Estate Handbook, written by James Halperin, Steven Ivy, and Gregory Rohan should be prominent as part of your collection, and located where it can be easily found. This 90 page publication is available from Heritage Auctions in Dallas, Texas, on request and generally free of charge.
A collection with individual key coins encapsulated will facilitate their sale. Should your posthumous instructions include recommendations for sale as part of a national auction, certified coins can speed up the sale date, as well as allow you the opportunity to get the coins in the holders you wish them in, rather than those the auctioneer may use for convenience. Determining which certification service to use, will be discussed in detail later.
There are horror stories of families which have received pennies on the dollar for collections sold to unscrupulous dealers. Dealers may relate stories of family members who have brought in raw coins which were “shined up” with Brillo pads to make them more saleable. Most dealers have experienced this to one degree or another during their career. Having coins encapsulated in plastic lessens the likelihood of your collection experiencing such a fate. Hard holders also offer protection from damage through careless handling, moisture and even from proximity to fire or heat.
The prudent collector must leave detailed instructions with their loved ones on how they want their collection dissolved in the event of their death. In essence, we need to make a will for our coins. This should include individuals you want contacted, and an auction house(s) you trust to give your collection the best chance of a successful sale. It is also prudent at this point to discuss in writing what you feel the collection should realistically bring at auction or direct sale. Don't forget to discuss thoughts regarding commission rates. If you fully trust a fellow collector to direct these actions, it will take a significant burden off your family. One must be sure to discuss this with the person/people involved to ascertain their willingness to make such a commitment.
Now let us consider other important factors why and when certification is beneficial. As a collector, third party grading (TPG) will validate your coin's grade and authenticity.
Grading as we have all learned is a subjective opinion of a coin's condition. On a 70 point scale, the last 11 grades are reserved for uncirculated coins. We learn to grade through a variety of methods. Typically books and years of experience are our primary teachers. Certification provides us with an unbiased third party opinion, and can also be a useful teaching tool. It also teaches us how to identify problem pieces. For example, the following PCGS table/codes reference why a submitted coin does not achieve a grade, but rather a determination of authenticity, defined by this company as “genuine.”
|No Grade ||Description ||Printed |
|82 ||Filed Rims ||Yes ||Yes |
|83 ||Peeling |
|No ||No |
|84 ||Holed and |
|Yes ||Yes |
|90 ||Not Genuine ||No ||No |
|91 ||Questionable |
|No ||Yes |
|92 ||Cleaning ||No ||Yes |
|93 ||Planchet Flaw ||No ||Yes |
|94 ||Altered |
|No ||Yes |
|95 ||Scratch / Rim |
|No ||Yes |
|97 ||Environmental |
|No ||Yes |
|98 ||Damage ||No ||Yes |
|99 ||PVC Residue ||No ||No |
Under description, these general categories may define multiple problems. Peeling laminations and planchet flaws may also be thought of as mint errors, and this company does certify and grade them utilizing the mint error submission tier.
While no one wants to “waste” money by having a submitted coin not receive a grade, this process can be a valuable part of a collector's ongoing education. It can prevent future purchasing blunders, as the collector learns the markers to identify what, for example, a cleaned coin looks like. Third party graders offer a professional opinion, based upon the company and grader's expertise. Not all grading companies are created equal. So, determining your TPG company takes thought and may be modified over time, as the collector grows in experience.
A basic understanding of technical and market grading needs to be reviewed. Under current grading standards, Canadian TPG companies have chosen technical grading. The determining factors in this case are strike, luster, and marks, not necessarily in equal parts. Under market grading, which is the grading method common to the United States, eye appeal is added to the mix. These four factors make up the grade, compared to three under Canadian standards. In Canada, a poorly toned, ugly coin can achieve the same grade as beautiful one, all other conditions being equal. When grading companies first came into being back in the 1980's, the US tried technical grading. This soon gave way to market grading, a more meaningful way to determine a coin's grade and value. It is important for the collector to realize one system is not necessarily better than another, but rather, simply different. Assigned grades may differ based upon where the coin is graded. Since grade strongly influences value, this is a critical factor.
Another difference between grading systems relates to copper and color. Freshly minted copper coins are red in color. As the copper ages, it color changes to red-brown and eventually brown. There are a number of natural variations in copper color, including a visually stunning rainbow toning. Such toning may occur naturally, but also through “doctoring” techniques, which is a scourge to the collecting community. Suffice it to say that 99.99% of all red coins, 500 years from now will no longer be red, but brown. Full red coins are sought after by copper collectors, and as such are valued in multiples of dollars as compared to their red-brown and brown counterparts. Better US grading companies define red copper coins as being at least 90% red. Canadian companies typically allow the red designation to be achieved at 60-65%. Thus a “red” ICCS coin may cross-grade as a red-brown example in a PCGS holder. Another interesting difference between countries exists with brown copper. It is rare to find Canadian graded brown examples above MS-62, although MS-63 examples exist. US companies do not limit brown grades, and thus a highly lustrous, sharply struck, mark free, eye appealing brown piece can achieve an MS-66 or higher grade. Different countries, different ideas on how to grade. One is not necessarily better than the other, just different. The astute collector recognizes this. It can be to his benefit to obtain nice brown copper at a fraction of the cost of red examples.
In the ever developing global coin market, authenticity continues to be a huge factor in the collecting market. Laws exist in the US and Canada that deal with counterfeit coinage, and differ dramatically in how they are enforced. At present, Canada has been much more proactive in dealing with this problem, thanks in no small part to the efforts of Michael Marshall, a well know Canadian numismatist.
Counterfeits have been with us for as long as coins have been around. Sophistication has improved, making the purchase of expensive raw coins like a walk through a minefield. Currently, there is a huge influx of counterfeits from China. They vary in sophistication from semi-crude to very, very good. Nothing can discourage a collector more than spending hard earned money on a coin that is subsequently determined to be counterfeit. This is one of the primary reasons to certify coins. The buyer and seller now know they are dealing with legitimate coins. A word of caution here. Primary US TPG companies have financial guarantees the coin encapsulated is a legitimate mint product. Companies differ in the extent of this guarantee, and should be researched by the collector. Canadian services do not offer a financial guarantee. This is not to say these companies cannot determine a counterfeit from fake, but errors do occur, and all TPG companies have made mistakes.
Remember, most coins sell for their actual value. That uncertified bargain on eBay, will not be worth the face value of the piece, should it be determined a counterfeit.
So how expensive is it to certify a coin? As in most all products and services, prices will vary. For brevity sake, we will look at the accepted top two in each country. This is PCGS and NGC in the US, and ICCS and CCCS in Canada. With the exception of ICCS, the majority of all TPG companies will have their prices clearly posted on their website. This makes it easier to do a cost analysis, specific to your collection.
Both PCGS and NGC have membership requirements. These “collectors clubs” vary in cost and membership benefits. If you are an ANA member, NGC offers free submissions, but does not offer access to other benefits such as on-line population reports. Both of these companies have yearly renewal requirements. However, based upon the tier chosen, “free” submissions are typically included as part of the membership package. This in effect zeros out the cost of membership. Among other benefits upon joining, one may now directly submit coins for grading, access population reports, use inventory programs, and participate in registry set building.
Submission is based upon defined tiers. These include modern, economy, regular, expedited, and various show levels. The latter refers to their participation at most national shows where a coin can be graded and encapsulated during the course of the show itself. PCGS basic tiers are $14, $18, and $30, while NGC costs are $16.50, $19, and $35 for the same services. PCGS charges $50 for error certification, while NGC fees are $10 plus the tier fee. PCGS has an $8 processing fee per order. Should you attend a national show in the US, the grading services typically have booths where you can submit coins directly, thus saving postage charges in one direction. These companies are quite helpful in processing orders, and will walk you through the process. You can join these member clubs at the same time. Other US TPG companies such as ANACS and ICG also have tables and do not require membership. Fees to such companies may be reduced as well. It should be remembered though, not all companies are created equal. Coins values may increase or decrease based upon the holder and company reputation. The premier Canadian service is ICCS. CCCS has been around since 2004 and is gaining in market share. Both ICCS and CCCS grade coins in soft holders. These are soft vinyl (PVC) flips with a non-PVC inert inner sleeve to protect the coin from PVC contamination. These flips have the advantage of being relatively inexpensive, easy to store, and offer a degree of protection. CCCS offers a hard holder, at rates between $13 to $25 per coin. CCCS soft flips are available between $6 to $15 per coin, based upon the number submitted. One must submit a minimum of 100 coins to obtain the $6 rate. ICCS fees vary from $6.50 to $15.00, again with a 100 coin submission to achieve the lowest rate. ICCS has an $11 fee for tokens, and $6 per coin charge to have the Charlton Variety Reference Number included on the coin. ICCS does not certify error coins. CCCS will certify errors, and does not charge additional fees for variety attribution or token submissions.
Holder quality, like grading, has a degree of subjectivity to it.The collector must bear in mind all holders, hard and soft, are subject to counterfeiting. China is again in the forefront in this activity, and US grading services are actively fighting such practices. Fortunately, these holders can be identified by the alert individual. The author makes the following observations, based upon personal experience:
PCGS holders are available only as hard esthetically pleasing plastic. They offer security holograms, certification numbers, are easy to store in the company boxes. For an additional fee, a “Security Plus” designation is offered. This designation files a photographic fingerprint of the coin, which is maintained by PCGS. Extremely fine and above PCGS coins can achieve a plus (+) designation to the holder, which designates the coin as in the top tier for the grade. Additional registry points are achieved by such designations. For an additional fee, professional digital photographs can be taken at the time of submission. Disadvantages include a susceptibility to scratches on the plastic when mishandled by sliding across a hard surface. In addition, the edge of the coin cannot be readily viewed when encapsulated. This may change in time.
NGC holders are one of the best on the market. These hard holders are esthetically pleasing, and offer protection from surface scratches to the plastic by having a raised rim. They offer security holograms and certification numbers. The newest generation holders are designed to hold the coin in place with four protruding prongs, thus making the edge easily viewable. This is a superb attribute, particularly when viewing error coins. An NGC coin can obtain a plus (+) designation, to denote premium quality for the grade, and a star (*) for exceptional eye appeal. Both designations add points for NGC Registry coins. For an additional fee, professional digital photographs can be taken at the time of submission. NGC offers extra deep holders, which can allow for extra thick pieces and/or special errors to be encapsulated. NGC offers coin conservation services through their NCS division. Some people find the white background of these holders esthetically unpleasing. The holders are slightly thicker than other hard holders, thus take up slightly more space in storage. NGC has been criticized for their inability to accurately grade Canadian coins. Bearing in mind the different grading standards between countries, the author finds that while there is certainly validity to this in years gone by, NGC has made efforts to correct this issue. Many if not most current examples will readily cross-grade between services. NGC (as well as PCGS) has been reported to be quietly buying up poorly graded early pieces when they cross the auction block. This practice will ultimately increase the company's credibility and acceptance, as these pieces disappear from the marketplace. NGC graded Canadian errors are well accepted due to accurate descriptions, assigned grades and holder attributes.
ICCS is arguably the most insecure holder on the market. This holder has been compromised in the past. Since this holder lacks basic security, it becomes hard to recommend, particularly if resale is a consideration. Some collectors are reluctant to buy an ICCS certified coin from an unknown dealer or individual for this reason. In addition, as the holder ages it is subject to cracking. Some collectors complain that moisture exists and directly contacts the coin surface, within the inner inert plastic. Not all accept this as a legitimate concern, though those that do, also point to color changes that occur particularly to copper coins. The collecting community on the whole still accepts this product, due in large part to the expertise of its primary grader, Brian Cornwell. ICCS holds the lions share of TPG coins within the physical boundaries of Canada. Soft holders do allow for full viewing of the coin edge, though the view may be distorted through two layers of plastic.
CCCS soft flips display similar problems with cracking (age related) and moisture. The addition of the “2004” imprint makes the holder more secure, but is not a failsafe. Such holders may still be opened and resealed by a skilled use of a scalpel and a $60 electric sealing machine. In theory, such tampering can be identified upon close inspection. In recognition of these problems, Louis Chevrier owner and primary grader has developed an excellent, scratch resistant, hard holder. This holder is recognized and highly regarded for its excellent crystal clear clarity. It does not offer an edge view such as NGC holders, but is closer in similarity to PCGS examples. Indeed, being only slightly larger, this holder fits in some of the spaces in a PCGS plastic storage box. At present, CCCS does not offer a plastic storage holder. CCCS is arguably the most conservative grading service of all four reviewed.
What Coins Need Certification?
Considering the “why” of certification, the “what” is the next logical question. Typically, this will be determined by value, rarity, and variety. As part of the grading exercise, it may be educational to check any questionable pieces you may own. Don't be too upset if some of these coins do not either receive the grade you expect, or are body-bagged for any of the problems listed above. Such coins are part of your numismatic education. Some of these lessons can be expensive, but hopefully they will help prevent future mistakes of a like nature.
Your choice of certification services is important. Typically, US grading companies are “harder” on the coin than Canadian firms which lack sophisticated devices such as the “coin sniffer” designed to detect the presence of coin doctoring substances. In years gone by, these coins could find themselves into pretty much any holder. That is not the case today with firms such as PCGS. One must be careful here not to assume that one grading company is the end-all for determining a coin's authenticity or problems. For instance, coins with a PCGS designation of “questionable color” may well find a home in an ICCS or CCCS holder, and rightly so. Canadian firms have the advantage of seeing many more Canadian coins, and thus may be aware of specific date characteristics, which might elude the US grader.
Coins with a retail estimate of less than $100, typically do not warrant encapsulation. An exception to this rule may include error coins, and those with specific attributes or varieties that have yet to achieve overall recognition in trends. Remember also, error coins can be created and counterfeited by unscrupulous sellers, who pray on the unknowledgeable collector. Another exception would be a coin with a special meaning to the individual collector.
A collector may add a few lower valued coins to achieve a price break with a TPG. Some grading companies allow coin rolls to be submitted. In this case, the submitter may specify to only holder those coins achieving an MS-65 or above, and thus save grading fees on lower quality examples. Typically a nominal charge is added for those coins that do not achieve the minimum grade level requested. Coins that are known to have been counterfeited are examples of pieces that typically deserve encapsulation. This includes most key date examples in all states of preservation. It is almost always easier to sell coins through on-line auctions that have been certified. It takes much of the uncertainty and guess work out of the purchase.
The more valuable a coin is, the more important it is to be evaluated by a TPG company. There are examples of coins where one grade point can result in thousands of dollars in trends value. This introduces a new concept, familiar to many dealers as well as collectors. It is called the “crack-out” game. Take for example, a coin whose value is $1000 in MS-64, but in MS-65 it is valued at $7500. In this case, should the buyer or owner think it has a shot of achieving the MS-65 grade, the coin is broken out of its current holder and resubmitted. This can occur numerous times, until the desired grade is achieved. Companies such as PCGS are now taking photos of these coins on arrival, in essence creating a digital fingerprint of the coin. This has an overall effect of limiting the practice. This in itself is one reason collectors are skeptical of the value of certification services. Some coins have been cracked and resubmitted so many times that when the desired grade is finally achieved, it stays forever in this holder. While the practice is decried by many, the prudent collector needs to be aware of the practice. It is imperative the buyer learns to grade himself, so as to be able to detect when a coin has reached its maximum potential and not overpay for a coin that barely meets the requirement for the grade.
US companies have come up with this competitive “free” practice that allows the collector to rate his coins against others collecting the same series. These coins are typically high grade examples, and achieve a point value based upon rarity and condition. PCGS registries allow only coin coins graded in their holders to compete. NGC allows coins graded in both NGC and PCGS holders to compete. This is win for the collector, and certainly a revenue producer for the grading service. At present, no Canadian company sponsors registry set competition.
Registry competition can be fierce. When a high end coin reaches public auction, collectors watch population reports and fight to win such a coin if it can push their set up one or more levels. Typically these collectors then seek to buy high grade pieces already in the holder of preference due to possibility of failure to cross grade from one service to another. This is another win for the TPG service, and creates brand loyalty. Collectors are often heard to describe their preferred TPG service as a love-hate relationship. A high level of frustration may surround one grade point, and refusal to cross-grade a coin from another service becomes aggravating to say the least.
Registry set collectors of modern coinage, will certify common examples to complete sets. Were it not for the registry set itself, such coins would rarely be certified. What the collector is looking for in these instances is the condition rare piece. Though thousands of examples may exist in such condition, completeness becomes the driving force for this registry collector.
If you have persevered through this epistle, you may likely agree there are both pluses and minuses to professional certification. Overall, I believe the benefits significantly outweigh the negatives. Certification of your personal collection does not need to happen overnight. The astute collector will explore the services out there, and perhaps try each service to evaluate their grading, customer service and costs.
One significant impediment to grading outside one's own country involves customs and postal laws. Should a collector in Canada wish to experiment with US companies he may benefit from having an authorized dealer submit them. This negates the need to join a collector club, and while he has undoubtedly viewed coins in these holders, now he will have the opportunity to see his collection professionally graded (or in instances cross-graded). If he travels to US shows, he can submit them in person. US collectors may find Canadian postal requirements perplexing. He will need to determine what is the best way to complete customs forms without jeopardizing the chance of mail theft and customs inspections. It is suggested the collector contact the certification company directly and follow their recommendations for submission. One may wish to hand deliver them while attending a show and avoid the customs / postal issues at least in one direction. Customs can become a driving force keeping collectors from seeking certification outside ones own country.
Suffice it to say, certification affords the collector the peace of mind knowing his coins and family are now protected in the event of death. His coins will ultimately pass to new collectors, as he becomes part of the pedigree of his prized pieces. As the temporary caretaker of these small pieces of history, he has done his best to authenticate, accurately assign a grade and protect his collection from unintended damage for future generations to enjoy.