Coin grading

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Coin grading [1] is the process of determining the grade or condition of a coin, one of the key factors in determining its value. A coin's grade is generally determined by five criteria: strike, preservation, luster, color, and attractiveness. Several grading systems have been developed. Certification services professionally grade coins for tiered fees.

Contents

Overview

A "grade" measures a coin's appearance. There are generally five main components which determine a coin's grade: strike, surface preservation, luster, coloration and eye appeal. Grading is subjective and even experts can disagree about the grade of a given coin. [2] [1]

History

U.S. coin grading has evolved over the years to a system of finer and finer grade distinctions. Originally, there were only two grades, new and used. This changed to the letter grading system beginning with the lowest grade – Basal State (also Poor (PO)), then continuing Fair (Fr), About or Almost Good (AG), Good (G), Very Good (VG), Fine (F), Very Fine (VF), Extremely Fine (EF), Almost or About Uncirculated (AU), Uncirculated (Unc) and up to Brilliant Uncirculated (BU). Gem Uncirculated was roughly equivalent in usage to BU at that time. Numerical grades from 1 to 70 now accompany the verbal grades. [3] [4] [5] [6]

Systems

Early grading systems

The quality of all coins is not equal and collectors felt the necessity of defining the quality of the coins in order to assess their value. Rim damage, nicks, polishing, cleaning, scratches and other forms of wear are considered factors in grading a coin. Whether or not a coin shows evidence of having been mounted in jewelry also affects its grade.

In the early years of coin collecting, three general terms were used to grade coins:

Sheldon grading system

As the collector market for coins grew rapidly in the late 19th and early 20th centuries, it became apparent that a more precise grading standard was needed. Some coins were simply more fine than others, and some uncirculated coins showed more luster and far fewer marks than others. Terms like "gem uncirculated" and "very fine" began to see use, as more precise grading descriptions allowed for more precise pricing for the booming collector market.

In 1948, well-known numismatist Dr. William Herbert Sheldon attempted to standardize coin grading by proposing what is now known as the Sheldon Scale, as is detailed below. Sheldon's 1 to 70 grading scale[ clarify ], included in his book Penny Whimsy, was originally devised for U.S. large cents but it is now applied to all series. [8]

European grading system

European countries use various, roughly equivalent, grading systems. The main features of their systems are presented in the following table: [9]

European Grading System
AdjectiveDesign remaining United
Kingdom
France Spain Italy German-speaking Scandinavia Netherlands Portugal
Good (G-4)10%GAB (Assez Beau)RCMGE (Gut erhalten)2G (Goed)REG
Very Good (VG-8)25%VGB (Beau)BCB (Bello)SGE (Sehr gut erhalten)1-ZG (Zeer Goed)MREG
Fine (F-12)50%FTB (Très Beau)BC+MB (Molto Bello)S (Schön)1Fr (Fraai)BC
Very Fine (VF-20)75%VFTTB (Très Très Beau)MBCBB (Bellissimo)SS (Sehr schön)1+ZF (Zeer Fraai)MBC
Extremely Fine (EF-40, or XF-40)90%EF/XFSUP (Superbe)EBCSPL (Splendido)VZ (Vorzüglich)01Pr. (Prachtig)Bela
About Uncirculated (AU-50)95% + some lusterUNCNo useNo useMSPL (MoltoSplendido)UNZ (Fast unzirkuliert)0-01No useNo use
Mint State (MS-60 to 64)100% + lusterBUSPL (Splendide)SCSPL/FDCUNZ (Unzirkuliert)0FDC (Fleur de Coin)Soberba
Mint State (MS-65 to 70)100% + full lusterFDCFDC (Fleur de Coin)FDCFDC (Fior di Conio)STGL (Stempelglanz)0FDCFDC (Flor de Cunho)

American Numismatic Association scale

As the hobby of numismatics evolved, the need arose for a more concrete grading system. In 1978, the American Numismatic Association published the Official A.N.A. Grading System for United States Coins. [10] It established grading tiers of, in descending order of preservation, Mint State, About Uncirculated, Extremely Fine, Very Fine, Fine, Very Good, Good and About Good. Most numismatists, as well as third-party grading services, also use two other descriptors for the lowest grades, Fair and Poor. The higher tiers on this scale each encompass two or more "sub-grades" denoted by the appending of the corresponding Sheldon scale number, such as Very Fine-20 or Very Fine-30. This allows for the recognition of coins which exceed the standard for a given tier, but do not meet the criteria for the next. Grades are commonly abbreviated, and not all numismatists use the numerical grades, so a grade of Fine-12 may be rendered as Fine, F-12, 12 or simply F. [10]

Certification services

Coin certification services emerged in the 1980s as a response to the need for buyers and sellers to agree on grading. [11] For tiered fees, certification services grade, authenticate, attribute, and encapsulate coins in clear, plastic holders. [12] [13] Professional Coin Grading service (PCGS), Numismatic Guaranty Corporation (NGC), Independent Coin Graders (ICG), and American Numismatic Association Certification Service (ANACS) are the most popular services. These are the only services whose coins have a special section on eBay, the largest rare coin marketplace. All four firms guarantee the grades and authenticity of their certified coins. Together they have certified over 80 million coins. [3] [4] [5] [6]

At each of the four main grading companies, a similar process is used. Each coin is graded (on a verbal and 1 to 70 numerical scale) and authenticated by two or more graders, and then assigned a final grade by a finalizer, based in part upon the recommendations of the prior graders. Depending on the company, various descriptors may be added, such as Full Bands for Mercury dimes, Full Bell Lines (FBL) for Franklin Half Dollars, or Deep Mirror Prooflike (DMPL) for Morgan dollars, and the coin's die variety may be noted. The coin is then slabbed and returned to the customer. [3] [4] [5] [6] In 2010, PCGS and NGC introduced "Plus" grading for high-end coins graded XF45 to MS68. A plus symbol (+) is added after the grade. [14] [15]

In 2007, the Professional Numismatists Guild (PNG), a US association of rare coin dealers, released the results of a survey of major coin dealers who gave their professional opinions about 11 certification services. PCGS and NGC were rated "Superior" overall, with ANACS and ICG deemed "Good". PCI and SEGS were listed as "Poor", while called "Unacceptable" were Accugrade (ACG), Numistrust Corporation (NTC), Hallmark Coin Grading Service (HCGS), American Coin Club Grading Service (ACCGS), and Star Grading Services (SGS). [16] [3] [4]

Counterfeit NGC and PCGS holders have been reported, but significant measures have been taken by both services to remedy the problem, such as NGC's use of photographic verification for every coin certified and both services' employment of serial number verification and anti-counterfeiting features in their holders. [17] [18] [3] [4]

See also

Related Research Articles

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Numismatic Guaranty Company American coin certification organization

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Uncirculated coin

The term uncirculated coin can refer to three things:

Third Party Grading (TPG) refers to coin grading, authentication, attribution, and encapsulation by independent certification services. These services will, for a tiered fee, "slab" a coin. Professional Coin Grading Service (PCGS), Numismatic Guaranty Corporation (NGC), Independent Coin Graders (ICG), and ANACS are the most popular and credible services. Together they have certified over 80 million coins. All four firms guarantee the grades and authenticity of their certified coins. Certified Acceptance Corporation (CAC) is a coin certification service which certifies—and makes a market in—certain high-end coins already certified by PCGS or NGC.

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Cleaning (coinage)

Coin cleaning is the process of removing undesirable substances from a coin's surface in order to make it more attractive to potential buyers. The subject is controversial as no consensus exists among the numismatic community whether cleaning is necessary. Those that argue in favor of cleaning are also in dispute on which methods work best. It was once common practice to clean coins as the method was recommended by experts in the field. Solutions from pencil erasers to wire brushes and potassium cyanide were all used as cleaning agents with the goal to make the coin look brilliant again. When certified grading came into use in the mid 1980s though, the practice of cleaning coins diminished over time. Most coin experts have since come out against cleaning coins, as doing so can negatively affect them both in grade and value. If a potentially valuable coin must be cleaned then professional work is recommended. Commonly found coins are mentioned as ideal candidates for any attempted cleaning experiments.

References

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  2. Winter, Doug (2001). "The Five Components of Coin Grading". Archived from the original on 2010-03-08. Retrieved 2010-06-06.
  3. 1 2 3 4 5 "NGC". ngccoin.com. NGC. Retrieved 2015.Check date values in: |access-date= (help)
  4. 1 2 3 4 5 "PCGS Coin Facts". pcgscoinfacts.com. pcgscoinfacts.com. Retrieved 2015-09-05.
  5. 1 2 3 "ANACS". www.anacs.com/. ANACS. Archived from the original on 2015-03-31. Retrieved 2015-09-05.
  6. 1 2 3 "ICG". icgcoin.com. ICG. Retrieved 2015-09-05.
  7. Androulakis, Yiannis. "Coin Grading Standards".
  8. Sheldon, William H. (1990). Penny Whimsy. Sanford S. Durst. ISBN   0-942666-62-3.
  9. "Grading Standards".
  10. 1 2 https://www.pcgs.com/news/how-united-states-coins-are-graded
  11. "Coin Grading Systems - The History of Coin Grading Scales". About.com. Archived from the original on 16 November 2007. Retrieved 13 December 2009.
  12. "The History of Rare Coin Grading". Austin Gold Information Network. Archived from the original on 6 September 2009. Retrieved 26 August 2009.
  13. "Coin Grading Services: Who They Are and What They Do". coin-collecting-guide-for-beginners.com. Retrieved 26 August 2009.
  14. PCGS Secure Plus Service
  15. NGC Launches Plus Designation
  16. "PNG, ICTA Announce Results of 2006 Grading Services Survey". pngdealers.org. Professional Numismatists Guild. Archived from the original on 2015-09-21. Retrieved 2015-09-07.
  17. "PCGS Announces". coinweek.com. Coin Week. 13 January 2014. Retrieved 2015-09-16.
  18. "NGC Confirms Counterfeit Replica Coin Holders". coinnews.net. Coin News. Retrieved 2015-09-16.