Grading Service Rankings in Five Tiers
Wednesday June 13, 2007
The coin collecting hobby has been using a three tier ranking system to categorize grading services for a long time now. Most collectors are familiar with the term "top tier grading services" (which include NGC and PCGS.) The second tier is usually said to consist of ANACS and ICG. The third tier covers all the rest.
The problem is that "all the rest" comprises a wide diversity of companies and guarantees, as well as many different motives for doing the coin grading. For example, there is a whole category of major dealers who do their own slabbing. These dealers grade more or less consistently, guarantee that the coins are genuine, and offer some kind of (usually short term) guarantee. Contrast this type of slabber with someone like SGS (Star Grading Service,) which is widely reviled as the worst of the worst. SGS only issues 11 grades, MS-60 through MS-70, no matter how bad the coin is! A coin that was sent to them as a test coin came back (graded PR-70) with a big fingerprint added to it! SGS is frequently cited as the culprit when complaints about graded coin value fraud come in. Is it really fair to rank SGS "equally" with, say, PCI, which has been around for awhile but just doesn't grade as consistently as others?
I have created a proposal for a five tier ranking system for grading services in an attempt to remedy these inconsistencies. The first and second tier are unchanged. The third tier carries some of the "better" of the rest of the companies. The fourth tier is for self-slabbing dealers who meet certain conditions regarding buyer recourse and guarantees. And the fifth tier is called the "bottom tier," so that we can finally put grading disservices like SGS in their place! For such a system to gain widespread acceptance, it must have a consensus among the members of our hobby. What do you think about this proposed five tier system? Share your thoughts by clicking on "Comments" below.
The problem is that "all the rest" comprises a wide diversity of companies and guarantees, as well as many different motives for doing the coin grading. For example, there is a whole category of major dealers who do their own slabbing. These dealers grade more or less consistently, guarantee that the coins are genuine, and offer some kind of (usually short term) guarantee. Contrast this type of slabber with someone like SGS (Star Grading Service,) which is widely reviled as the worst of the worst. SGS only issues 11 grades, MS-60 through MS-70, no matter how bad the coin is! A coin that was sent to them as a test coin came back (graded PR-70) with a big fingerprint added to it! SGS is frequently cited as the culprit when complaints about graded coin value fraud come in. Is it really fair to rank SGS "equally" with, say, PCI, which has been around for awhile but just doesn't grade as consistently as others?
I have created a proposal for a five tier ranking system for grading services in an attempt to remedy these inconsistencies. The first and second tier are unchanged. The third tier carries some of the "better" of the rest of the companies. The fourth tier is for self-slabbing dealers who meet certain conditions regarding buyer recourse and guarantees. And the fifth tier is called the "bottom tier," so that we can finally put grading disservices like SGS in their place! For such a system to gain widespread acceptance, it must have a consensus among the members of our hobby. What do you think about this proposed five tier system? Share your thoughts by clicking on "Comments" below.
Comments
i’ve been a collector for quite a while not in just coins but other items all so. Evaluating an item (grading) and then possesing(at a resonable and personable cost) Was and should always be a process that is decided between seller and buyer only. Since they are the only parties involved.
Great idea! Go with it.
I think such a system would be of great value to the consumer. What would be particularly useful would be information on specific lower tier grading companies. For example, centsles is a major dealer on ebay, having a feedback rating of 30191 and 750 items currently for sale. Many of his coins are “certified” by NNC. I have never seen NNC certified coins sold by any other dealer, and thus have speculated that this company might be owned by centsles. That being said, the one coin I purchased that was graded by them appeared to be fairly though not particularly conservatively graded. Just to have a relatively up-to-date list of grading companies would be useful.
Sounds like a great idea Susan. Believe it or not I do rank some of the self slabbers even below SGS! All are equally fith tier though. How about a poll vote here on the rankings?
This sounds like a great idea. I’ve never had anything graded or bought graded, but in the event that I would want to get something graded, I would want as much information as possible, especially on the lower tiers.
If the point is to educate the beginner buying public, then it maybe a good thing. But five tiers is a little much though. I’ve normally considered the top three to be PCGS, NGC, and ANACS in that order. Which for now is all a beginner needs to know until he gets comfortable at grading. PCI, SEGS, ICG, have all had their point in time where they holdered conservatively, and some nice buys can be found if enough are searched, but that is for the more edumacated amongst us in the game. The rest are, and should be, considered a purchase of a raw coin in a protective holder, nothing more. Three tiers is enough, its getting the word out that counts.
Great idea!! However, “grading company” such as SGS should not be listed at all since SGS is nothing but fraud.
Susan - I would consider just four “tiers”, taking ANACS and ICG as Tier One and eliminating Tier Two as you have them listed one after another. I do not know if I can illustrate it but allow me to try.
You begin with Tier One, then you have space, space, space, space, space, Tier Two, space, space, space, Tier Three, space, Tier Four. What this says is that Tier One is not only composed of the best in quality, they are five times as good as Tier Two. It also says the bottom two must be crap because they are so close to each other but far away from the top tier.
I also disagree with not giving the bottom tier the title Fourth Tier. It is always possible that a service can work its way up and if nothing else, we need to show consistancy.
I would also like to comment on selling coins from bottom tier companies - I received 5 beautiful Sacawagea’s (this can also properly be spelled Sacajawea) graded 70. I was thrilled until I decided to read more about Stars and decided to stop ordering or biding on anything graded by them if grading is a major consideration. If I wanted the coin however then I would have it graded by one of the Tier One graders.
My position on limiting grading to four tiers and including ICG and ANACS in the first. Why?
Some of the loudest arguements I have gotten into concern grading and which one to used. I just think the four I put on Tier One are so close they should be together.
Watch the tv coin sellers for awhile. Shop at Home is ALWAYS pushing NCG but CSN is ALWAYS pushing ICG. Treasure Hunter pushes anything that will get a sale as do most of the other TV coin programs. Does that mean Shop at Home is better than CSN because they are part of a major playere? Or should we listen to CSN because they know something we do not?
I would also like to tackle - at another time - the question of why do the big sellers push one grader over another. It costs me $30 but if these sellers are having tens of thousands graded are they paying $30? Of course not. It would not surprise me - since they do not disclose the info - if they are paying no more than a couple of bucks. If NCG charged me just a few bucks - and they did a good job, do not think for a second I would not be on the roof shouting their name and sending them as much business as possible.
Sorry for the length but it is an important subject and I would like to hear your opinions. Susan started something. Let all of us continue.
You can see that tbird and I disagree but only mildly. I disagree with Sam. If they advertise themselves as a grading service they should be listed. Get enough comments and perhaps they could become a better company. And do not forget, if they are NOT listed then new collectors or even many old timers who know little about grading have no where to look for info. I would rather they all be listed and let the collector or dealer make up their own minds.
As to gdnp you are correct. NNC stands for National Numismatic Certification.
Finally, also to gdnp a list of most all of the grading companies are listed. I got my list from the internet but cannot remember where but the gentleman who went to all the trouble to gather the info get coodos from me. He even goes so far as to tell you which online companies are using these made up names but selling only their own coins. Susan, are you familiar with this person?
If gdnp would give me a snail mail address I will send you a copy. I will also try to find the list again and if successful I will let everyone know.
Finally, again, I am not the usual coin dealer or collector. I do not fall into any category actually. All sales by my company are given to St. Jude’s Children’s Research Hospital and three small organizations doing good things for our service men and women, especially overseas. It is because of this that I am careful who I buy from or sell to. Grading tiers are important to this process and if I can give away a few thousand extra dollars by using credible graders, that is what I want to do.
Okay folks - let the yelling begin.
)
Cheers and sorry for the typos.
Ray Esposito
Alpine, Texas
I am a novice coin collector having purchased 18 Silver Eagle Proof coins over the past 3 months. One of the coins is a 2007 PR70 CAM Proof graded by SGS and purchased for $24.02 (thought I made a good buy at that price considering that the same coin graded by other services such as NGC were selling for $50.00 and more).
I was getting ready to purchase another coin graded by SGS until I read the comments about this grading service in the article. I believe that a 5 tier system for ranking coin grading services is a excellent idea!
Ray E. (and others who have shared ideas whom I haven’t had a chance to respond personally to yet),
Thank you for your thoughtful and thought-provoking comments regarding the proposed 5-tier ranking system for grading services. I’ve had half a dozen really well-considered responses and am considering forming an informal working group to try to arrive at a consensus on how many tiers to have and how to define them. Then, we’ll post a public survey listing all of the known grading services and let everyone who cares to vote to rank the services into the tiers. Periodically, we can re-survey so that companies who have improved (or gone down the tubes) can be reranked as appropriate.
I do have the list you are referring to. It was originally posted to the eBay Coin Forgery discussion group (which has sort of become the watchdog group for all types of fraud in the coins categories on eBay.) Here’s the link to the thread (you’ll need to be signed in to eBay to see it, I think. You might even have to join the group):
http://groups.ebay.com/thread.jspa?forumID=100037392&threadID=1600474046&start=0&tstart=0
I have an updated version of this with additional information on it. When we’re ready to publish the survey, we can get the latest version from this wonderful person going by the name of i-hate-slabs who is really the prime mover behind all of this (and not me, I just wrote the little proposal, heh.)
I plan to give this another week to 10 days for more ideas to come in, and then we’ll organize the informal working group. Anybody else who wants to help, please let me know! I’ll contact everyone around July 1 or so.
Susan
I believe you are being way too harsh with this five tier system. Calling the 5th tier the “bottom scum” degrades a lot of reputable coin collectors. Not only that, but any collector is bound to trade or sell a coin at one time or another and will likely have applied a personal, subjective grade to that coin. Having done so makes that collector “scum” by your standards.
Everybody knows that coins are graded based on emotional attraction. Let’s do away with these faulty grading services and substitute them with services that only authenticate what type a coin is. Leave the grading the the owner of the piece!
I just finished reading three of your articles about coin grading services and was I surprised. I know about PCGS & NGC and have a lot of coins graded by them. I was unaware about about other rading svs. I just purchased a small lot of certified coins graded by INB but before buying I checked the grading service he uses, IBN, so I wasn’t taken in by knowing what I was buying wasn’t worth the price that the seller was quoting. I just collect and don’t sell coins so I wasn’t concerned about INB services. I totally agree with you on having a five tier listing of coin grading services. It would go a long way for helping new collector’s from being taken by these seller’s who always have one or more lots of coins from an “estate” for sale. Yes, a five tier system would be very helpful for consumers. eBay should have this five tier system (or three tier) placed on their site map for Coins, US so that people will know about these services before buying.
Justin,
I am grateful to you for pointing out my inappropriate use of the word “scum.” This is, indeed, an ugly and strong word, and it doesn’t belong in this article. As you probably surmised, the subject of grading service abuses is one that I have strong feelings about, and I got a little carried away when I wrote about the “bottom tier.”
I reread the rest of the article, and I don’t agree that my wording gives the impression that the collectors who own “bottom tier” slabs are in any way at fault, or scammers. I guess it would be up to a person’s individual sense of ethics whether he tried to pass off a misgraded coin on someone else or not, but the fact that a collector is unfortunate enough to end up with one of these slabs doesn’t make him a bad person, and I don’t think my article implies that.
Based on your feedback, I replaced the word “scum” with something less inflammatory. I always appreciate thoughtful, constructive criticism and I appreciate your taking the time to provide some.
Susan Headley
About.com Guide to Coins
All I can say as a newbie collector is that “good judgement from experience…and most of that come from bad judgement”. I place most of the blame on SGS for calling itself a “grading service”. I will not remove the slab from my Ebay purchase because that would be destroying evidence that I’m sure will part of some sort of “Action”. The biggest problem with SGS is EBay. It is not only in bed with SGS with the listing fees they collect but the coin selling rules are BS and won’t stop even one listing from this Service. On the positive side-SGS does have nice holders.
i ve collected coins off and on since 59. i would think that to get control over the fake coins that are out there a 5 tier service would be well received. i would ask who makes the call as to who goes in what tier
Hello everybody!
I have a question for specialists.. What do you prefer?
A very antique coin graded PCGS Xf 40 or the same coin graded ICG AU 55?
Best Regards!!
I don’t disagree that there are some really bad graders out there but I would not bet the ranch on PCGS or NGC either. They have many conflicts of interest - heavily dealer oriented. The Dealers and NGC, PCGS have a love fest going on and trying to exclude or squeeze out any other players in the grading market. Unfortunately it does not matter what you think when trying to sell a coin. The same grade displayed on the holder might be a better coin slabbed in a PCI holder than a PCGS holder but that would not matter. The reality is you would get far less froma dealer in the PCI slab. There is no honesty in coins - I have decided to get out of collecting all together because in my view the playing field is rigged against the collector.
the grading issue is completely out of hand.last year i wrote a letter to the editor of coin world complaining about the ANA and its lovefest with ngc and pcgs.
I have a lot of coins that i have collected many in segs holders some in nnc,some ntc and anacs and icg along with many ngc and pcgs. with the political games and comraderie enjoyed by the “top tier” grading companies and the ANA and EBAY. it is apparent to me that my coins(as nice as they may be)are not good investments unless they are in the top tier holders.
as an example EBAY in its infinite wisdom has decided that they will only let you display information for (4) grading companies. pcgs,ngc,anacs and icg. SO if i want to sell a few of my segs graded coins im at a disadvantage and that leads to less value of these segs coins.the problem is this. people are actually buying the holder and not the coin within it even if the risk is less if you have pcgs or ngc
here is a breif illustrationto think about. i recently purchased a 2006 reverse prove silver eagle ms-70 NGC at a price of $600 several weeks later I purchased another sreverse proof ms-70 in an ICG holder for $360. smae coin just as nice no spots,blems or defects.
to me it’s a good deal but i know why i got such a good deal on the icg, it wont trade as well in it’s present holder not only that but if you look at what sgs has in their holder you may find that they are exactly the same in grade but discounted because of the holder.I raelize that sgs does overgrade to the nth degree.it should be the coin itself that tells the story.
I happen to like SEGS because i do think they grade fair and i think ICG has been more than conservative with some of the coins i sent in to them. I do realize the value of of the top tier graded coins but c’mon people this is all about politics, big dealers,ebay and MONEY
thaks for the opportunity to rant
Long time Morgan col. Bought MS-68 early Frisco other day graded by SGS (for grins). Placed bid 15 percent below CDN MS-60 and won. Whoopie, right-wrong. The coin was strongly struck MS(64-65), but had been lightly whizzed. How could they miss that. Rank them lower, they are adversely affecting the unknowledgeable/beginning collector. collector.
For what its worth, I believe ICG should be elevated to “tier One”. I believe they are more conservatiove than NGC and that’s what we need today in the grade-inflated market. Given time, I believe they will meet or exceed PCGS/NGC approval ratings as seen in CDN. Heck they already are almost even with NGC.