Certified Coins vs Raw

There is often a difference of opinion between a buyer and a seller about a grade of a coin. Sometimes, the difference of a single grade point can mean a difference of value of thousands of dollars or more (sometimes much more). For that reason, “Third Party Grading” (TPG) Services have come to the hobby, first primarily to verify the authenticity of the coins, but second, to act as coin grading experts without bias in a grading decision.

The most prominent are PCGS, ANACS and NGC. ICG and SEGS are also getting respect from serious collectors. (Please do not confuse SEGS with SGS. SGS is a whole other ball of wax I’d prefer to simply avoid discussing here.) I don’t have a lot of experience buying and selling ICG or SEGS coins personally, however I have noted the grades they give are fair, or at worst, one point above NGC (or two points above the grade PCGS might assign).

Always remember that an assigned grade is simply an opinion. It can be a weighty opinion, but the point I’m making here is to learn to grade coins yourself. Do a lot of studying so you can have your opinion about the grade of the coin without the need of a certified grade. I recommend at least an hour of studying coins in a similar price and grade range to the one you consider purchasing. Sometimes I’ve studied coins for weeks before feeling confident enough to make a purchase.

Pay close attention to grading services and all holders. Just because a coin is in a holder does NOT mean the coin is real, nor does it mean the grade is correct. Nor does it mean the holder is real! As they say, “buy the coin, not the holder.”

Here are some other holders and TPG’s, courtesy of CoinAuctionsHelp.com.

In the past few years, CAC (the Certified Acceptance Corporation) has become very important to some collectors as well. CAC will put their sticker on any holder they think has the right grade. In other words, it’s a fourth party verifying that the grade on the holder is correct. CAC coins generally sell for a premium.

PCGS is the Professional Coin Grading Service. It is the “toughest” grading service of all of them. PCGS will not assign coins a grade if it perceives any problems at all – from artificial toning, improper cleaning, to damage or environmental damage. In these cases, PCGS assigns a grade of “Genuine” for authentic coins. Often, a PCGS-graded coin is 1 to 2 points lower than other TPG’s. This is not incorrect! It just relates a different opinion and different (not incorrect) standards.

ANACS is the grading service for the ANA, the American Numismatic Association. The American Numismatic Association Certification Service is another significant TPG. ANACS not only grade coins, but they will attribute varieties of types of coins. They will also assign a details grade to problem coins.

NGC is the Numismatic Guarantee Service. Like ANACS, they will assign details grade. On top of that, NGC assigns every coin it encapsulates a bar code and unique identification number. That allows people to double-check a certification on-line with that number.

There are other TPG’s that are respectable, but these are “the Big Three”. As the saying goes, “buy the coin, not the holder.” Do not always trust the grade on the holder. Instead, get smart about grading coins according to your own standard. Do your homework – and I mean a lot of homework – when buying and know your price range very well.

Buying graded coins doesn’t necessarily keep you from making mistakes. Knowing your stuff helps more.

A common dealer practice is to re-submit coins to the TPG’s to get the grade they want on the coin. If a coin comes back graded 65 but the dealer feels the coin is a 66, the dealer may “crack out” the coin from the container and send it in again and again until the coin gets that 66 he’s after. Of course, this only makes sense if there’s a significant price difference between a 65 and a 66. This practice has an adverse effect on population reports. If PCGS counts a coin as a 65 and it is resubmitted, then grades 66, that coin exists in their database as a 65 and a 66. If the coin was resubmitted numerous times after receiving a grade of 65 multiple times, they might have a number of 65′s in their database when in fact there’s really only one (now 66).

This is one reason why CAC coins sell for a premium. It’s not often a dealer will bother trying to resubmit a coin with a CAC sticker.

This is an example of a counterfeit PCGS holder - very misleading even to an experienced collector.

Of course, just as there are counterfeit coins, there are unfortunately counterfeit TPG holders (and counterfeit CAC stickers). I do my best to avoid purchasing counterfeits and I double-check all of the coins I buy to make sure they aren’t counterfeit, but unfortunately, the counterfeiters are getting better. The lesson here is do your homework and work only with dealers you trust.

Now, I should mention – I collect both raw and certified coins. Most of my collection is raw, but some of my nicer pieces – the stuff I wouldn’t want to accidentally touch with my hands – is certified.

Some people insist on buying certified coins, other people insist on buying raw. There are benefits to both. The advocates for raw coins enjoy holding the history directly, unencumbered, in their hand. I get that. I like that too!

On the other hand, for beginning numismatists interested in spending anything over $100 on a coin, seriously consider only buying it certified. Also, of course, ONLY buy from a trusted dealer. Be careful of eBay sellers – and if it looks too good to be true, it probably is! Certified coins carry a premium over raw – and there is a very good reason for that! Somebody else has authenticated the coin and professionally given it a grade.