PVC damage on coins is the result of improperly storing coins in soft plastic flips. The PVC chemical in the flips interacts with the metal of the coin, creating a slightly acidic reaction, which causes residual deposits to appear on the coin's surface. Copper coins are most vulnerable to PVC damage, followed by silver, and then gold and platinum.
PVC damage appears as greenish, milky, or grey streaks or haze. In severe cases, it looks like tiny green blobs on the surface of the coin. PVC stands for polyvinyl chloride; it is an additive used in plastics to make the material more pliable and less brittle. In coin collecting, PVC is most frequently encountered in the clear plastic flips in which coins are stored. As a general rule, the softer and more pliable the flip is, the more PVC it contains. The hard, stiff, brittle types of flips (made of Mylar) do not contain any PVC.
PVC residue has a distinctive smell, sort of like the smell you get when you open a cheap plastic toy. In mild cases of PVC contamination, you might not be able to detect the smell, but if you ever smell PVC after removing a coin from a soft plastic flip, even though you don't see contamination on the coin, you should treat the coin for PVC damage anyway as a precaution. Removing PVC residue is simple, but left untreated, it will eventually eat into the surface of the coin. Merely taking the coin out of the offending flip isn't enough; once the PVC cycle has begun, the acidic PVC cycle will continue to degrade the coin's surface until permanent PVC damage results. Reputable grading services will not encapsulate coins with PVC residue on them.
See also: How to Remove PVC Residue