PCGS Genuine Service Expands
In June of 2008, PCGS began offering a service where, for $100 per coin, they would put just about any coin that was genuine into their highly-regarded coin holders. This move was met with mixed reviews. Many people were quick to quote PCGS co-founder and CEO David Hall, who said many times that PCGS would never encapsulate problem coins, such as the forum post from the PCGS message boards (where he posts as "homerunhall") on July 9, 2003:
This is a very interesting question. We do not holder problem coins because the majority of our customers don't want us to. They feel it degrades other PCGS coins, i.e. the PCGS coins they own. But what about authenticity? I understand that it would be a benefit to know if a cleaned 1932-S quarter was genuine. However, if we put it in a holder then we have the "problem coins in PCGS holders" problem.
As [for] other second and third tier grading services holdering problem coins, I think it's a business decision they make that is based on their need to get some revenue. One of the things they can do is to grade coins that PCGS won't.
(I made some very minor grammatical edits for clarity. The original post can be found here.)
PCGS announced last Friday that they are expanding the PCGS Genuine service to all submissions effective Dec. 1, and eliminating the $100 fee. All coins which are submitted under any of their service tiers will be returned in a PCGS holder, rather than in a "body bag," unless the coin has active PVC corrosion, a plugged hole, or fails the authenticity check. There will be no extra charge for this service, and customers can opt out if they want.
So, what's behind this about-face of a long-standing policy that was near and dear to the "majority of their customers" and the powers-that-be at PCGS? Could it be that the PCGS parent company's stock price has reached such a nadir that something had to be done to increase revenues? PCGS' parent company, Collector's Universe (NASDAQ: CLCT), trades for about $3.00 a share right now, down from $13.45 a year ago. David Hall certainly believes in his company's future; he bought 25,000 shares at a cost of nearly $78,000 on Monday.
I don't believe that the low stock price is the reason for this about-face in slabbing problem coins. After all, I hardly think there's going to be a run on PCGS just so people who got their coins back as no-grades can resubmit them again (and the pay the grading fee) just to acquire the new, improved version of the PCGS body bag. I think the current CLCT stock price is partly a reflection of significant investments that Collector's Universe has made into establishing their precious gems and diamond certification businesses, and partly a reflection of the current economy. Nearly everyone's stock price is down.
So why the the new "PCGS Genuine" service policy? I think it's Don Willis, the new PCGS President. I think he's willing to take some calculated risks to revitalize PCGS and the hobby's perception of the company. While the big dealers didn't mind the body bags too much (because they are generally experienced enough graders to avoid sending problem coins in to begin with) the average collector felt burned when he spent upwards of $50 to $75 to get his newest prize coin graded, only to get it back in a 10-cent flip. Now, the average collector will perceive value from his submission, even when it still amounts to a no-grade. This is smart thinking, in my opinion. Maybe Willis will even have the courage to go up against the 2% of the hobby that actually approves of deceptive designations such as First Strikes and First Day of Issue. We probably won't see it right away, but hopefully Willis will bring PCGS back nearer to the center of being a good citizen in our collecting community again.
Comments
Hi Susan
As we see the economy implode, even well to do collectors are feeling the pinch as evidenced by the wall street corporate losses which are dazzling everyone.
Today when corporations are confronted with mounting losses they generally start to contract by laying of employees and cutting operating costs where ever it is possible.
In this economic environment it is difficult to increase business without changing the business model. So in that respect PCGS should be forgiven for their change of heart and now stooping to encapsulate genuine coins.
This should be beneficial to those who like the PCGS holder and brand name, even if it is an off grade coin. IMO, their holders are the best designed holder. BTW, if people are not aware of it, the holder is a patented design that some other TPG’s wished they had a right to use.
Also, with the increased influx of counterfeits, certifications of authenticity are becoming more important, esp for those who are not experts in the field of coins they collect.
So personally I think it was a wise move for PCGS to move into the genuine grading. However I am sure that David Hall will have to eat a little crow, but it seems like we are all having to do that now days, esp. Wall Street executives.
Best regards – BB
Hello everyone! There is something in this article that has piqued my curiosity. I know this is a comments section, i have a comment with a question. My question is, the top tier graders wouldn’t slab problem coins. But why do i see problem coins [colonial type] slabed by the top tier graders, selling at actions for top dollars? The problems mentioned about the coins are numerous in some instances. They are rare coins in some cases. So, was it, the top tier graders only graded rare, to semi rare coins? As this article reads, it makes it sound that all problem coins got rejected. This brings more confusion to my mind, than it does answer any question. Does any one have an answer to this split of personality. Why some get rejected, but other problem coins have been slabed by the top teir graders? I think that would be a nice thing to know. don’t know who else to ask. Cept my favorite place of all time!
coiny
Coiny,
From what I have observed about grading service practices in this regard (why some impaired colonials and early U.S. get slabbed when they technically shouldn’t) is that it comes down to “who you know” and “who you are.” In a fair world, it shouldn’t, but the world isn’t fair, is it?
Scott A. Travers has a great deal of information in his new book about grading services and the way they do business, that most collectors will find a very eye-opening experience to read. Scott’s Coin Collector’s Survival Manual 6th Ed. really dishes the dirt about the high-end coin business. I’m preparing a review of the book right now, to hopefully publish by Monday, but you can buy it below cover price through the link in my review of the 5th Ed. (I updated the link to the 6th.)
As for what PCGS has said in the past about slabbing impaired or “problem” coins, see the third paragraph of the post I wrote when PCGS first began this Genuine service (charging $100 a coin.)
Susan Headley
Coins Guide
Thank you Susan very much! I have to sheepishly admit, i have Scotts book, 5′th ED. It was hide-ing under my chair in a manageri of other well hiden books. I knew i had it. I fished it out to shamlesly discover, i got as far as page xiii in the acknowledgments section. I have now placed it among my top books i use as manuals. strike it rich with pocket change is the book i found i’ve been useing the most, when i need quick answers. Had i gotten any further inside Scotts book, i may have discoverd the anwser sooner. There is so much good informatin being discused here, in a way, i’m glad i brought it up. There have been times of contemplation, even in these lean times for alot of us. The temptation to buy problem colonials has gotten the better of me. i have restrained my self from making the purchases untill i knew more. Now i know what i need to know.And for that Sue i thank you again. This may have saved me some disapointment and dough. And mostly from getting stuck with a less than desirable coin. It is very tempting though. I would love to own an old colonial, some of the United States first minted coins. It’s to much of a mind field out there right now. In old silver and old coppers. Old gold seems the better route? Since i’ve read there are less problem coins struck in gold. That remains to be seen. It may be a safer bet, if and when temptation strikes again. And i have to have one. At least in better shape where the possibility exists of the coin getting a decent grade, if and when i would submit it for grading. raw gold coins — problem free? Are a better chance bet, then thee above.
Happy collecting to all.
Thank you one more time Sue for your quick response.
coiny
I’ve submitted coins to PCGS and ANACS only. In my experience, PCGS has sent the coin back in a PCGS holder marked genuine, sent the coin back in a flip with a PVC exposure or Not genuine designation. I have had ANACS grade cleaned or damaged coins and notate the designation on the slab. I buy coins alot and I don’t remember seeing NGC or PCGS slabbed coins that were cleaned or damaged.