Have you ever stumbled upon old coins and wondered what they’re worth? Maybe you wish to sell some gold or silver coins to get extra cash. You’ll need to understand how coin grading works.
How much does it cost to get a coin graded? Well, the answer is relative; it’ll depend on the service provider, the coin graded, and the number of coins submitted. Here’s a comprehensive guide on everything you need to know about grading a coin. Read on to find out.
What Will I Learn?
- A Comprehensive Coin Grading Guide
- What Are Coin Grading Services?
- History of Coin Grading
- The Importance of Coin Grading
- Who Provides Grade Coins Services?
- The Grinding Process and How it Works
- The Sheldon Grading Scale
- Scale Condition and Description
- What Involves a Professional Coin Grading Service?
- Coin Grading Costs
- Are Coins Worth Grading?
- How Much Does Grading with PGCs and NGCs Cost?
- What Are the Advantages of Buying Coins?
A Comprehensive Coin Grading Guide
In this guide, you’ll learn everything you need to know about professional grading services and how various conditions impact the coin’s value. Without further ado, let’s first define what coin grading is.
What Are Coin Grading Services?
Coin grading, also known as third-party grading, is a professional service provided by Numismatic Guaranty Corporation (NGC) experts. The experts assess the quality of the coin graded and examine its physical conditions. After this evaluation, the coin is graded on a scale between poor and excellent uncirculated. This grade helps you find the value of your coins.
Moreover, PCGs provide an unbiased value of the coins and allow collectors to know the true worth of their collectibles. It’ll also guarantee that no parties will be short-changed in the process. However, having your coin graded by Numismatic Guaranty Corporation (NGC) will not increase the worth of your coins. On the contrary, it ensures a fair market value for these coins, which would otherwise be short-changed if they hadn’t been graded.
History of Coin Grading
Rare coin collecting became popular in the 1900s, which gave rise to the Numismatic Guaranty Community. Back then, the professional grading service was more subjective and contentious than today. The terms under which the coins were graded were wide, with no established standards.
This led to various disparities among the grading services that would have the same coin condition. These differences made coin collecting difficult. While the dealers understood the significance of a uniform scale, it wasn’t until Dr. Sheldon created a 70-point scale for examining the coins in 1949 that there was some sort of restoration to the process.
Another significant milestone in the coin grading industry happened in 1977 when Abe Kossoff created ANA grading standards for United States coins that wished to formalize the Sheldon non-numerical grade. It tried to describe potential grades, including photographs for each service.
This made third-party companies start emerging in the 1970s to facilitate the ANA Certification Service (ANACS). It resulted in the rise of other corporations like the Professional Coin Grading Service and Numismatic Guaranty Corporation in 1987 and 1986, respectively. The first company to encapsulate graded coins was the Professional Coin Grading Service. It would attach the graded metals with a plastic holder showcasing the coin’s information and grade.
Today, collectors may collect labels, cores, and designations for an added variety for their collectibles. The establishment of grading businesses brought a positive impact to the coin collecting industry.
Previously, collectors had to rely on dealers’ word about their graded metals without the option of verifying how accurate the information was. Today, collectors can rest assured they’re genuinely getting their coin graded accurately. It also prevents scenarios of counterfeit money.
The encapsulated coins that have been certified usually add a layer of protection to coins that would have been damaged, which can lower the entire state of the coin.
The Importance of Coin Grading
Grade coins don’t equate to the value of a coin. Instead, it’s a number to a coin based on its conditions and leaves the market to determine the worth of the coins graded. However, collectors who get a coin graded by PCGs or NGC are evaluated and assessed by an unbiased expert.
When collectors want to trade their coins, the grading service will act as evidence of their preservation. The standard grading service will eliminate any uncertainty in the transaction. It allows the buyer to analyze more objectively.
Coins with grading and certification are less vulnerable to market price fluctuations than bullion coins. Market price changes will have little impact on the rarest coin grading.
At a glance, grading coins is important since:
It ensures the coin is of good quality and assures buyers of the legitimacy of the coin.
The grading process safeguards the coin from environmental contaminants and damage.
It helps determine the market value of the coins.
Grading coins allows easy valuations and identification.
It’s worth noting that the grading process won’t boost the coin’s value. Even so, if you have a graded coin, you’ll stand a chance of selling the coin quickly.
Who Provides Grade Coins Services?
It’s important to ensure that Numismatics experts have graded the coins. This way, you’ll ensure the coin is evaluated by an unbiased and trained expert that will enhance the accuracy of the numerical grade of the coin. As stated earlier, various third-party corporations are known to offer the services.
Some third-party corporations have proven to be the most credible source of grading services. Let’s take a look at some of them.
Professional Coin Grading Service (PCGs)
This third-party corporation has been operating since 1985. It was founded by David Hall, alongside other proficient numismatics experts. Recent studies show that PCGs have graded over 40 million coins since their operations. Moreover, it’s credited as being the pioneer of appraised coin protection. It uses tamper-evident capsules to protect the coin further and guarantee their grading. The PCGs is based in Newport Beach, CA, but it has some branches in Europe and Asia. PCGs is part of the Collectors Universe Inc.
Numismatics Guaranty Corporation (NGC)
NGCs is yet another third-party corporation that started providing coin grading services in 1987. It’s based in Sarasota, FL. The company has since graded over 50 million coins from the United States and various parts of the world from nearly past and present countries. Currently, Numismatics Guaranty Corporation is the official grading service of ANA (American Numismatics Association).
American Numismatic Association Certification Service (ANACs)
The (ANAC) was founded in 1972 as part of the American Numismatic Association. During this time, coin collection took over by storm, allowing room for counterfeit infiltrating the market. While con artists were looking for ways to fraud people from this rising hobby, ANA’s board of directors was looking for ways to combat this menace.
Overall, the corporation created the certification service, which was different from how it operated previously. Usually, they only identified whether or not the coin was genuine, then returned it with a certification of identification and not encapsulated. The corporation started grading coins in 1979. ANZACs has, however, been sold severally since its inauguration. This company is currently owned by EKW, LLC and is based in Englewood, Colorado.
The Grinding Process and How it Works
The grinding process will vary from one coin dealer to the other, depending on the professional coin grading services put in place. They, however, go through the basic stages:
The process kicks off with the collectors submitting their coins. Whichever third-party corporations the coin owner is dealing with will first allow the collectors to fill in some details about the coins. They include: date, mint mark, denomination, quantity, method of payment, and return shipping address. The owner will then have to prepare for shipping by staking each coin into plastic holders.
After the coin dealers receive the coins, they’ll undergo identification processes. Usually, it’s a simple process of assessing the coins and ensuring the content of the package matches the quantity of the submission invoice. Afterward, the coins are entered into the corporation’s database and barcode. The dealers will store the coins in a vault until standardized grading is done.
When the coin dealers are ready to grade coins, they’ll take out the coins from the vault into the grading room. Usually, not all coins are graded at a go; they’re graded separately by two coin graders. The coins are evaluated and assessed to determine the coin condition, then compared with the published references to determine which variety it qualifies and its numerical grade. During this process, the owners of the coins are anonymous to ensure the process remains impartial.
Once the grading is done, the coins will go into another department to encapsulate coins with labels about all grading data and descriptions. The coins will then be placed in a plastic core piece with a transparent holder.
Lastly, the coins are shipped to the address indicated in the submission form. Most third-party grading corporations will return the graded metal to the grading department before shipping to carry out the final inspection, ensuring that the labels match the actual coin’s condition.
The Sheldon Grading Scale
Most third-party corporations use the Sheldon scale to grade coins. It’s the universal grading standard for most coins. This standard grading system was invented by Dr. William Sheldon in 1949.
It revolves around a 70-point scale that assesses the coin’s condition. Usually, a coin that’ll be graded on the higher end of the spectrum is more expensive than those on the lower end of the spectrum. Today, the Sheldon scale has an abbreviation that indicates the coin’s condition.
These abbreviations range from PO (Poor) to MS (Mint State). PR on the Sheldon scale indicates that the coin is proof. On the other hand, SP refers to the specimen. Here’s a more detailed review table of the Sheldon scale.
Scale Condition and Description
MS 60-70: Uncirculated coins – These are coins that haven’t been in circulation and have a full luster, plus show no marks
AU 50, 53, 55, and 58: About uncirculated coins – Coins that have been in circulation for a limited time and show signs of little wear.
XF 40 and 45: Extremely fine – All design elements of the coins are visible. However, most high points show wear and flattening. They have very little luster.
VF 20,25,30, and 35: Very fine – Light to moderate wear is clearly seen on the coin. There could be possible loss in major details.
F 12 and 15: Fine – Half of the coin is worn out and flat, but the lettering on the coin remains visible.
VG 8 and 10: Central, and fine details of the coins graded are worn or flattened- Its lettering readability is still intact but loses visibility. The rims remain full.
G 4 and 6: Good – Central designs can be identified by the outline. Rims are partly worn and flattened.
AG 3: About Good – Rims are completely worn out, but the lettering on the coins remains readable.
FR 2: Fair – The coins are flattened with visible peripheral lettering.
PO 1: Poor – The coin is completely worn out; the only visible parts include dates, mint marks, and identity.
What Involves a Professional Coin Grading Service?
In a nutshell, coin grading involves identifying the coin’s variety, type, denomination, mint mark, mint year, possible mint errors, condition of the edges, design devices, and surface preservation. Moreover, the process involves identifying if the coin is genuine or not. Generally, it’s the identification of a particular coin and assessment of its condition. It’s finally encapsulated on a tamper-evident holder to protect it from further damage and handling.
Coin Grading Costs
Both PCGs and NGC charge grading fees for coin grading. Initially, collectors must be members of these third-party corporations for them to submit coins for appraisal. Depending on how many coins you want to be graded, you can easily join either of the organization with various memberships.
PCGs have a three-tier membership fee, including:
Platinum membership tiers with a membership fee of $249 per year.
Gold membership tiers with a membership fee of $149 per year.
Silver membership tiers with membership fees of $69 per year.
The PGCs membership offers direct submission privileges, special grading discounts, and member-only shows. Gold membership comes with eight free grade coins, while the silver membership offers four free grade coins.
On the other hand, NGC memberships include:
An elite membership that charges a fee of $299 per year.
A premium membership that charges a membership fee of $149 per year.
An associate membership that charges a membership fee of $25 per year.
NGCs Associate members will get additional direct submission privileges, plus all members have access to all online NGCs resources. Members in the elite have a $150 credit grading, while the gold members have $250.
Moreover, members must pay a grading fee for every coin they turn in for appraisal. They charge according to the maximum value and the type of coin you want graded. The grading costs also include insurance and shipping, depending on the number of coins you send for grading, plus their total declared value.
Are Coins Worth Grading?
Should you get a coin evaluated? The answer to this question is a long one. It depends on the worth of the coin now before the evaluation. The rule of thumb is to only go for coin grades if you think the grading fee is lesser than the value of the graded coin.
You can do things before you submit your coins to determine if they’re worth grading. Firstly, you can check the coin’s reference value in their coin price guides. Both PCGs and NGCs have online’s price guides, and then compare them with the coins you want to be graded. If there’s a great chance that your coin is highlighted as valuable, you can consider the grading costs before submitting it.
How Much Does Grading with PGCs and NGCs Cost?
One must either be a member of NGCs or PGCs to send any coin worth grading. The costs may start from $69 to $39, depending on the type of service you want. You’ll also have to pay a fee for each coin you send for appraisal.
If your coins are high-value, then the higher it’ll be to have them appraised. While this may sound weird, it’s relatively true. When grading an ordinary coin is $50, it will go back to $20, whereas a rare coin worth $50,000 may cost around $125 for grading. It’s more expensive to grade coins that are expensive than simple coins. This is why you’ll only hear about grading worth $5000 and wonder why there are no low-value graded coins.
While considering whether or not having your coins graded is worthwhile, you’ll also need to consider the cost of shipping and insurance expenses.
The grading process at the local coin dealer can take up to one week to complete and have the graded metals on your hands the next week. While coin grading is beneficial in some instances, collectors must consider the expenses and time needed, as not all coins are worth grading.
What Are the Advantages of Buying Coins?
There are various advantages that one can enjoy when they buy graded coins. They include:
Allow for Liquidity
It ensures that you’re able to sell the coin easily. The certification provides assurance and confidence in the coins you’re buying. Graded metals are easy to identify, and their grade is extremely apparent. Buyers can know the exact condition of the coin they’re purchasing.
Preservation of Graded Coins Through Grading
Buying graded metals which are sonically sealed will provide long-term storage for the coins. Even though the slab under which the coins are placed can’t fully protect the coin from the effects of surrounding areas, placing it in a cool and dry place is 100% effective in protecting the coin. Modern collectors can choose between graded metals and coins in their original mint packaging.
Storage of Graded Coins
Collectors who go out of their way to collect graded metals will find a useful way of storing the coins. One will be able to store and protect their acquisition but also an option to organize and display them. Some firms provide huge boxes of collector’s items – often too big to store in a vault or home safes. If the coins are stored in a capsule, they can be removed from the huge boxes to save space. However, the process makes viewing and evaluating the coins quite hard and frustrating.
In instances where the coin is graded and slabbed, they can be stored in specialized storage boxes designed to be compact yet functional.
This is a huge factor in why people buy graded metals. These coins have undergone a certification process evaluated by numismatist experts who give accurate grades. The buyers can always be sure about the coin’s condition. Whether a buyer is hoping to purchase a coin in its finest conditions or just complete a set of coins in the same grades, then knowing the coin’s condition is relevant to any collector.
Another good reason why you should buy graded metals is identity. Certification provides the needed information about the kind of coin you intend to buy. Third-party corporations have immense database information on every coin they grade. Buyers can find particular specs for a coin and how many coins they’ve been assigned to particular grades. The process is called ‘coin’s population’ and can greatly influence the value of coinage in the modern numismatists’ world. Buyers can easily search for a unique coin serial code on the website of PCGs and NGCs to acquire first-hand information by themselves.
Investing in grading coins can be excellent if you have rare and valuable collector’s items. It’s, however, important to note that not all coins are worth grading. Coins that have abundant circulation and are inexpensive are not worth grading.
Before you make a decision thinking that this financial move makes sense to you, you must consider the estimated expenses plus the potential benefits. Moreover, you’ll need to consider how this decision will affect future generations. The benefit of grading precious metals is evident; it provides the peace of mind that buyers need when they’re buying new metals or reviewing their coin collections. While the certification process is new in the metal grading industry, it has quickly gained popularity among coin dealers and coin owners alike.