By Peter Mosiondz, Jr.
Originally Appeared in Canadian Coin News
My biggest pet peeve about our wonderful hobby of coin collecting is the over-grading of coins. I see this all too often when I am called in to appraise a collection or make an offer on some coins that the collector has for sale at that moment. The Mylar® 2x2 holders or brown coin envelopes carry the dealer’s grade. Most times the collector cannot remember from whom a particular piece was purchased. Oftentimes the supposed grade as originally sold is blatantly out of reach. What to do about this situation? The collector must learn how to grade for very own protection. We are directing these comments to the “raw” or unencapsulated coins that one frequently encounters. But the caveat still applies to those coins graded by third-party services as we’ll see later.
Of course things have improved considerably with the advent of third-party grading services which have been with us now for nearly a quarter century. But there are still many enthusiasts, myself included, who like to collect the raw coins; coins that are not graded by a third-party service and are not encapsulated in a rigid piece of plastic. I enjoy holding the coin by its edge as I contemplate the history and romance associated with it.
Who is to blame for the over-grading of coins? In my opinion dealers and collectors share the blame. The dealer who knowingly over-grades his coins is doing nothing less than stealing money from the unknowing collector.
Stealing is the apt word in this situation for the simple fact that the higher a coin’s grade, the higher the price attached to it. Worse yet is the dealer who does not know how to grade coins. Hard to believe? Yet many such so-called dealers abound. This type of “dealer” should take it upon himself to learn and do it quickly for the betterment of the hobby.
I am not speaking about the majority of dealers; especially not the larger trustworthy firms who have been in business for many years and who have built stellar reputations in the process. However there are many newer dealers and some smaller operators who either deliberately over-grade or do not know how to properly grade their coins.
The collector takes responsibility as well. Certain precautions should be taken. The simple answer, as already stated, is to learn how to grade coins. The American Numismatic Association has a splendid course every summer on coin grading. Contact The American Numismatic Association at 818 N. Cascade Avenue, Colorado Springs, CO 80903. Or visit their web site at http://money.org/. The cost of their grading course is worth every cent. Needless to say every serious collector should be a member of the ANA.
Once the collector learns how to properly grade coins he will no longer have to depend on someone else to do the job for him. He will no longer have to accept a coin as being in Very Fine grade merely because the seller stated that it was indeed at that grade level. Now that he is comfortable with his resultant prowess in grading he knows exactly what constitutes a very fine grade for that particular series. He can then accept the coin or reject it with complete confidence.
Then we have the lazy collector; and they do exist – trust me. This is the individual who prefers to think that the dealers from whom is he is buying really know their business, know how to properly grade coins and will always make an honest sales presentation. This is wishful thinking at best. The owner of the firm who has been in business for a long period of time and his long-term numismatists on staff usually can be trusted to do so. But what about the newer employee who has just graded that coin you are contemplating to buy. Perhaps the coin was graded with all good intentions and without any desire to deceive the buyer. The individual just did not have enough professional experience in coin grading. Anyone can make an honest mistake. That is why they put erasers on pencils. Then again we encounter the so-called dealer who intentionally over-grades. The best advice is to be your own expert in this matter.
A splendid and very inexpensive book is available to help you along the road to grading competence and confidence. The American Numismatic Association’s Grading Standards for United States Coins, now in its sixth edition, is a great publication. Both deserve a place on every collector’s library shelves.
Here is my favorite definition of grading. The late (and great) dealer Abe Kosoff stated that “Grading may be defined as the determination of the state of preservation by an experienced numismatist without prejudice as to ownership”.
What does this mean? It is human nature to feel that the coin may not look so hot when it belongs to the other fellow. But my how it improves with age when it comes into our possession. In other words we should not wear rose-colored glasses when buying and selling coins. A coin that is purchased as an Extremely Fine-40 (EF-40) coin must be sold accordingly and not “bumped up” or elevated to an About
Uncirculated (AU) grade when it is offered for sale at a resultantly higher price.
Remember that we are talking about unencapsulated or “raw” coins here. The collector who focuses his attention to the collecting of coins that are graded and encapsulated by third-party grading services should have much fewer problems, however he must still learn how to grade and not to accept solely someone else’s opinion on the coin’s grade. And we must also state that grading is not and never will be an exact science. It is merely a matter of opinion. Make sure that it is your opinion that is the important one when spending your hard-earned money.