New PCGS contract

[Nutmeg Coin]

I see that PCGS is sending out a new contract to its dealers, relatively easy to read, with the velvet hammer coming down on non-compliant ones.

 

On page 6, section © it says "dealer will not affix any label or other writing to the outside of any PCGS holder containing the words "premium quality", "PQ" or any other language or symbol in a manner which could be construed to modify or refine the grade assigned to the coin by PCGS".

 

Also in the doctoring section it mentions a bunch of different methods (p.2-3) but not lasering which I have heard is harder to detect than the application of foreign substances, etc..

 

 

[ldhair]

Is this much of a change from the old contract?

[Mr. Smith Guesser]

"or any other language or symbol in a manner which could be construed to modify or refine the grade assigned to the coin by PCGS"

 

Ugh. That sounds open to interpretation. How about just "dealer will not affix any label to a PCGS-graded coin".

[Deerefan8420]

I see that PCGS is sending out a new contract to its dealers, relatively easy to read, with the velvet hammer coming down on non-compliant ones.

 

On page 6, section © it says "dealer will not affix any label or other writing to the outside of any PCGS holder containing the words "premium quality", "PQ" or any other language or symbol in a manner which could be construed to modify or refine the grade assigned to the coin by PCGS".

 

Also in the doctoring section it mentions a bunch of different methods (p.2-3) but not lasering which I have heard is harder to detect than the application of foreign substances, etc..

 

 

I'm sure there are quite a few "sticker dealers" that could be affected by this if, IF, PCGS wanted to do something about it. Isn't that the point of all the stickers that are placed on the holders anyhow? Aren't they meant to qualify the coin as being premium quality for the grade(as compared to other coins of comparable condition assigned the same grade), or in some cases, better than the assigned grade on the label? I wonder how many coins PCGS has had to buy back because of stickers added to their holders for coins that were not "worthy" of such stickers?

 

Edited to add: I was not going to open the whole can of worms as it related to the different stickers(I only eluded to it). But since Mr. Guesser has brought up CAC in his second post... I will add that I think it would greatly affect CAC, Eagle Eye Photo Seal an PQ Approved stickers and any of the others who place stickers on the holders to indicate "Premium Quality", "Superior Eye Appeal" or any other term that could construe or refine the PCGS assigned grade.

[Mr. Smith Guesser]

"dealer will not affix any label or other writing to the outside of any PCGS holder containing the words "premium quality", "PQ" or any other language or symbol in a manner which could be construed to modify or refine the grade assigned to the coin by PCGS".

 

 

Also... does that include CAC stickers?

[EVillageProwler]

"dealer will not affix any label or other writing to the outside of any PCGS holder containing the words "premium quality", "PQ" or any other language or symbol in a manner which could be construed to modify or refine the grade assigned to the coin by PCGS".

 

 

Also... does that include CAC stickers?

 

I doubt this applies to CAC (the entity), because I think they don't submit to PCGS.

[TonerGuy]

I will add that I think it would greatly affect CAC, Eagle Eye Photo Seal an PQ Approved stickers and any of the others who place stickers on the holders to indicate "Premium Quality", "Superior Eye Appeal" or any other term that could construe or refine the PCGS assigned grade.

 

I think its an easy way to eliminate the competition...

 

Either you submit to PCGS or to CAC but not to both. How many dealers are going to choose CAC over PCGS ?

[Mr. Smith Guesser]

I doubt this applies to CAC (the entity), because I think they don't submit to PCGS.

 

I'm playing the devil's advocate here....So don't take this too seriously...I like to try to poke holes in things...

 

But okay, dealers are not allowed to put any labels on PCGS slabs. What if the slab had a sticker that said "PQ" on it when a dealer bought it? Technically, the dealer didn't put the sticker on. Would the dealer no longer able to sell the coin? Or would they be required to peel it off?

 

And what's the difference between that and a dealer buying a coin for resale that already has a CAC sticker?

 

Again, I'm just play the devil's advocate. I'm not a dealer, so the rule doesn't even apply to me.

[coinman_23885]

I don't see PCGS being able to enforce the sticker provision; after all, what would be their damages? Also, to those who are wondering, how would a dealer sticker or CAC sticker "be construed to modify or refine the grade assigned to the coin by PCGS"? That strikes me as being incredibly vague and unenforceable especially since contracts are construed against the draftsman. Moreover, if the goal is to curb competition, there is a question of whether this is fair and even permitted under laws regulating fair competition among businesses.

 

I think it is all talk.

 

[Mr. Smith Guesser]

I think it is all talk.

That's probably the case.

 

This could have been the result of a single dealer that's rubbing PCGS the wrong way or trying to get over on consumers in some manner and enough people complained. And by making a broad rule about the stickers, they can easily put the kibosh on it.

[Conder101]

How about just "dealer will not affix any label to a PCGS-graded coin".

That would include price tags.

 

Also... does that include CAC stickers?

Only if CAC is an authorized PCGS dealer.

[MarkFeld]

How about just "dealer will not affix any label to a PCGS-graded coin".

That would include price tags.

 

Also... does that include CAC stickers?

Only if CAC is an authorized PCGS dealer.

 

What about Eagle Eye, which, to my knowledge, is an authorized PCGS dealer?

[TonerGuy]

I don't see PCGS being able to enforce the sticker provision; after all, what would be their damages? Also, to those who are wondering, how would a dealer sticker or CAC sticker "be construed to modify or refine the grade assigned to the coin by PCGS"? That strikes me as being incredibly vague and unenforceable especially since contracts are construed against the draftsman. Moreover, if the goal is to curb competition, there is a question of whether this is fair and even permitted under laws regulating fair competition among businesses.

 

I think it is all talk.

 

They could easily enforce it. They could just revoke a dealer's authorized dealer status. Sure the dealer could have an employee sign up as a collector and still submit coins but I think a dealer would receive some benefit for being authorized. Damages arent necessary.

 

A dealer doesnt have a right to be an authorized dealer.

 

Fair ? Did you see what the NBA just did to Donald Sterling ?

 

They can set their Terms of Service pretty much however they want. If you want to be an authorized dealer you have to play by their rules or they can take away your membership in the club/association.

 

Of course who knows if that is PCGS's end goal with this. Personally I think it would be rather stupid since it appears that PCGS with a CAC sticker are the most valued coins on the market right now. Why would they want want to give NGC a chance to challenge that advantage is not smart business. But as we have all seen - PCGS is not necessary good at being smart ie banning numerous well known and respected posters on their message boards because of simple disagreements.

 

Upon further review - maybe this is more of an issue than just a sticker...

 

CoinPlex - dealer to dealer trading/buying system

 

Collector's Corner has 57,774 listings valued at $89,912,175.00

 

CAC's Coinplex has coins valued at $975,866,826.00 - more than 10x what Collector's Universe has on their system.

 

[WoodenJefferson]

Rest assured it is mean to govern items as such (company to remain nameless)

 

 

But yes, Eagle Eye may run into a grey area here.

[RWB]

Are the gray areas like those in Stephen King's "The Mist?"

[coinman1794]

"dealer will not affix any label or other writing to the outside of any PCGS holder containing the words "premium quality", "PQ" or any other language or symbol in a manner which could be construed to modify or refine the grade assigned to the coin by PCGS".

 

 

Also... does that include CAC stickers?

 

A dealer submitting a coin to CAC is not the same as a dealer affixing a label to the slab. Also, the CAC sticker does not "contain the words "premium quality", "PQ" or any other language," whatsoever, except "CAC." If they are eliminating CAC privileges, they need to reword this rule to say what they mean.

 

[Nutmeg Coin]

I don't really remember specifics on the previous PCGS contract form, but the usual legal boilerplate. For me the only advantage of being a member dealer is slightly better rates. But with the limited amount of fresh raw material out there, I have not been submitting much, and hardly ever do re-submissions unless I disagree with a result.

 

On the Coinplex vs. "Collector's Corner" trading platforms, I agree that the Coinplex network is much better, but is a dealer to dealer network. I found the Collector Corner system cumbersome, with listings taking too long and not terribly active in terms of moving certified material. Coinplex however has CAC offers for thousands of coins. Both run $100 a month. CCE is actually superior to Coinplex though with much more activity.

 

If you look at the PCGS grading statistics page, it looks like the number of "plus" grades are significant but not enough to compete with CAC:

 

2,189,676 graded in last year; number of "plus" graded coins: 50,281

http://www.pcgs.com/statistics/

 

Possibly PCGS has a new PQ grade coming beyond the "plus" and this is a way to legally open their opportunities more? Just a guess, probably unlikely.

[bsshog40]

This is really strange to me. A dealer is still a collector I would think. He purchased the coin and has ownership of it. It's like selling a car and the manufacturer telling you that you can't put a sign on it saying "extra nice" or something of the sort. Most of these stickers are a persons opinion of the coin. Doesn't this start to violate the "First Ammendment"?

[Mr.Mcknowitall]

This is really strange to me. A dealer is still a collector I would think. He purchased the coin and has ownership of it. It's like selling a car and the manufacturer telling you that you can't put a sign on it saying "extra nice" or something of the sort. Most of these stickers are a persons opinion of the coin. Doesn't this start to violate the "First Ammendment"?

 

Congress shall make no law.........

[WoodenJefferson]

What if the sticker applied is officially 'trade marked' what then?

[coinman_23885]

I don't see PCGS being able to enforce the sticker provision; after all, what would be their damages? Also, to those who are wondering, how would a dealer sticker or CAC sticker "be construed to modify or refine the grade assigned to the coin by PCGS"? That strikes me as being incredibly vague and unenforceable especially since contracts are construed against the draftsman. Moreover, if the goal is to curb competition, there is a question of whether this is fair and even permitted under laws regulating fair competition among businesses.

 

I think it is all talk.

 

They could easily enforce it. They could just revoke a dealer's authorized dealer status. Sure the dealer could have an employee sign up as a collector and still submit coins but I think a dealer would receive some benefit for being authorized. Damages arent damages.

 

Fair enough. When I wrote that I had legal remedies in mind.

 

With that said, from a practical perspective, do you really think PCGS is going to lose a lot of money and business to get into a contest with its clients? The bottom line is that attempts to enforce this could result in financial loss and cause the stockholders to revolt, prompting the board to send Don Willis packing. And while I don't like Don and can think of a few adjectives to describe him, stupid isn't one of those adjectives.

[CSdot]

There is one major dealer based in California who specifically affixes a PQ sticker. He is a fairly prominent dealer, and a former ANA President, so I find it hard to believe that the leadership at PCGS is unaware that this dealer uses PQ on his stickers. In other words, logic leads me to believe that this new rule is directed specifically at him.

 

Less likely, but still within the realm of possibility, is as others have said, that this new rule is suppose to challenge all sticker companies, from CAC to Eagle Eye to PQ, and others.

 

[MarkFeld]

There is one major dealer based in California who specifically affixes a PQ sticker. He is a fairly prominent dealer, and a former ANA President, so I find it hard to believe that the leadership at PCGS is unaware that this dealer uses PQ on his stickers. In other words, logic leads me to believe that this new rule is directed specifically at him.

 

Less likely, but still within the realm of possibility, is as others have said, that this new rule is suppose to challenge all sticker companies, from CAC to Eagle Eye to PQ, and others.

 

If the rule is directed at one dealer, in particular, this doesn't appear to be a smart way to address it.

[CSdot]

There is one major dealer based in California who specifically affixes a PQ sticker. He is a fairly prominent dealer, and a former ANA President, so I find it hard to believe that the leadership at PCGS is unaware that this dealer uses PQ on his stickers. In other words, logic leads me to believe that this new rule is directed specifically at him.

 

Less likely, but still within the realm of possibility, is as others have said, that this new rule is suppose to challenge all sticker companies, from CAC to Eagle Eye to PQ, and others.

 

If the rule is directed at one dealer, in particular, this doesn't appear to be a smart way to address it.

 

I agree wholeheartedly.

 

Is it possible that the leadership at PCGS is unaware that BS puts PQ stickers on his coins? Let's assume they were aware, if they didn't want it to look like it was directed specifically at him, then wouldn't they have given a more generic accolade in their warning than PQ to describe what is now verboten?

 

Either someone didn't do their homework, and they owe an apology to let him know the new rule was not intended to single him out, or PCGS knew exactly what they were doing and we just don't know the catalyst for this edict.

[Mr. Smith Guesser]

After seeing the slab that WoodenJefferson posted, I can see how someone (especially someone new to the hobby) might mistake that as a CAC sticker or something that PCGS themselves put on the slab.

 

I mean, it's a hologram like the hologram labels on the back of the NGC/PGCS slabs. And as a dealer, you'd know how it could be confusing. So it seems that the dealer is intentionally trying to confuse the customer.

 

Can't people just be on the level man? Is that really too much to ask?

 

I mean, are they really going to starve if they're not working the customer over? If that's the case...please...come to my house, I'll feed you if you're starving.

[TonerGuy]

"dealer will not affix any label or other writing to the outside of any PCGS holder containing the words "premium quality", "PQ" or any other language or symbol in a manner which could be construed to modify or refine the grade assigned to the coin by PCGS".

 

 

Also... does that include CAC stickers?

 

A dealer submitting a coin to CAC is not the same as a dealer affixing a label to the slab. Also, the CAC sticker does not "contain the words "premium quality", "PQ" or any other language," whatsoever, except "CAC." If they are eliminating CAC privileges, they need to reword this rule to say what they mean.

 

I see CAC stickers as modifying or refining the grade assigned to the coin by PCGS... Gold stickers specifically are for coins they feel are under-graded.

 

How about just "dealer will not affix any label to a PCGS-graded coin".

That would include price tags.

 

Also... does that include CAC stickers?

Only if CAC is an authorized PCGS dealer.

 

I dont read it as including price tags... here's the language that counts...

 

which could be construed to modify or refine the grade assigned to the coin by PCGS".

 

I dont know if JA is an authorized PCGS dealer but if he is I am sure they would include him IF the goal was to stop third party certification such as PQ, CAC and Eagle Eye.

 

What if the sticker applied is officially 'trade marked' what then?

 

That doesnt make much of a difference.

 

CAC is trademarked and an application for PQ has been made but its not yet approved by the USPTO.

 

If PQ is approved it will be interesting to see if BS sues or threatens to sue other dealers using PQ stickers on their coins. I saw an entire case full of self-printed little round plain PQ stickers on one dealer's coins...

[Conder101]

I dont read it as including price tags... here's the language that counts...

My comment about the price tags did not apply to the email from PCGS and their language., It applied to the comment I quoted from another member who suggested that PCGS should just make their statement "dealer will not affix any label to a PCGS-graded coin".

[Raisethis2]

 

This looks to me like PCGS has determined that David Stuppler and his PQ Approved poses some threat to PCGS that I don't understand. Being that PCGS is a publicly traded company it seems just stupid to me that they would want to go after him in this way although a direct confrontation with him seems less "winable" than just cracking down on Dealers who are PCGS affiliates.

 

Earlier someone mentioned that perhaps PCGS plans to affix some PQ designation of their own on slabs or at minimum wants to at least keep the option open. As a future sales tool and re-submission option that makes sense.

 

If that's the case it's just a backdoor way to "copyright" something they don't own and never will. In any event, maybe having PQ stickers only on NGC slabs is a good thing.

 

Seems about right for the deep thinkers ATS.

[RWB]

PCGS makes the terms of agreement. If a participating business does not like those terms, they can decline that agreement and no longer participate. Otherwise, they are constrained by the agreement.

[CSdot]

Seems the dealer could easily get around the contract by setting up a side LLC either in his name or his wife's or kid's name to handle the stickering of coins. That way Dealer entity #1 is compliant, while entity #2 is free to do as it pleases as it is not subject to the PCGS agreement.