A Reminder to Everyone that Slabbed Coins are NOT Necessarily Problem-Free Coins

[TomB]

Perhaps many of you are aware that I have recently injured my back and, as such, have not been able to drive. This means that I have also not gone to any coin shows and, coupled with some bad timing, have not gone to a larger show since Baltimore in December and have only been to one show at all in 2005. Therefore, I have been relying on the internet more than previously to see coins.

 

At a typical show I will see scores of low-end or problem coins in NGC, PCGS and ANACS holders and I simply move on when these appear. Looking at images on the web provides a greater challenge to weeding these mistakes and dogs out. In the last few months, this is what I have received when I have ordered slabbed coins online, or won them in auction without first viewing them in-hand.

 

ANACS:

I won five mid-grade Barber halves from two separate Heritage auctions and all five had been previously cleaned, dipped and retoned. However, none were in an ANACS net holder. They were slabbed as problem-free coins. Also, Heritage made no mention of the problems each coin had, and their scanned images gave no clue as to what I would encounter. Thankfully, Heritage offered me the opportunity to write a letter as to the problems each coin had, and they refunded my money for the auction lots save for a truly trivial sum.

 

NGC:

While surfing ebay one night I came across the newly listed auctions of an ebayer who runs many BIN auctions for slabbed coins. I have never done business with them, but they offer a return policy, so I decided to look at a coin I might be interested in. Unfortunately, they put in the URL for their images improperly, and this batch of auctions only had a red X for each coin. I hit the BIN on one very tough date, mid-grade Barber half and when I saw the coin in-hand I was amazed that NGC would ever slab it. It had been dipped multiple times, was graded VF25 yet had flat white, dull, lifeless centers and muddy, blue-gold rims. Aside from the fact that it was lightly overgraded, it was really a VF20, was the glaring fact that it had no patina and was an absolute dog of a problem coin. I was able to return the coin for a refund without incident.

 

PCGS:

The DLRC site listed a very attractive NS Seated Liberty dime in an older PCGS green holder graded F15, the type of holder with the digital writing on it and that everyone seems to believe will instantly upgrade. However, the reverse of the coin looked to have some scratches on it, but this was just a scan and I thought it likely that the holder was lightly scratched so I bought the coin. Upon arrival, the obverse was attractive and the reverse was also attractive except for sixteen deep scratches underneath the words "ONE DIME". These were not new scratches, they were old and toned over, but they were obvious to anyone who might look at the coin for even a second. This coin had no right to ever get slabbed at PCGS and should have been graded by ANACS as something like F15, net G6 because of the heavy and multiple scratches. I sent the coin back for a refund, but did not tell the DLRC people about the problem. Unfortunately, as soon as DLRC got the coin back, they placed it in one of their auctions where it sold for 50% more than what I had paid for it! The new owner had to have been mortified when they received the coin.

 

Lastly, I received another coin from Heritage recently. This one was bought outright and is in a PCGS EF40 holder. It is a 19th century half dollar and is a few hundred dollar coin. As soon as I opened the package I could see an "X" scratched into the entire obverse of the coin. This was not a light mark, it was a jagged, intentional "X" through the portrait, through the fields, through everything in its way. It was also not an ancient mark, as it had not completely toned over. The Heritage images did not reveal the mark. It went back to Heritage for a refund immediately.

 

So, what is the lesson of this story? It is that even if a coin is slabbed by a reputable TPG that it may have a severe problem and that if you are to buy this coin, with this problem, that you are likely to lose in the long run. After all, you may pay market price for a coin with a large "X" through the obverse simply because PCGS slabbed it, but if you were to ever try to sell it to me I would decline the option. Similarly, you would likely take a beating on the price from anyone willing to take such a problem coin. Therefore, always inspect all your coins, and potential coin purchases, as if they are raw and come to an opinion as to grade, eye appeal and potential problems on your own before you take the word of a TPG. It will make your collection better in the long run and will likely make you substantial money when and if you sell.

[michael]

a great thread tomb as usual and man could i tell you stories like this with ngc and pcgs many many times over that would totally blow you away and curl your hair but i am sure with the bell curve in grading millions of coins done by many different people over the last 20 years or so you will get some a necessary evil when grading coins

 

and i am sure others have had many similar experiences

 

you are right tom the slab is a good start but thorughly inspect ALL the coins buy weather holdered by the top tier grading companies or not

[jom]

Bah! I don't believe a word you say. You are a TPG basher who has a reputation of saying bad bad things about their wonderful service. Only Margulies is worse! You...you...bad person you! You should be ashamed of yourself.

 

 

You've also seemed to have run across a problem I've noticed for about 5 years. The astonishing number of garbage coins in Heritage auctions. Truly remarkable that continue to try to dump that [#@$%!!!]. No wonder their catalogs weight more than me.

 

jom

[DaveG]

Tom,

 

It's nice to see that you're giving the Postal Service so much business while the rest of us are deprived of your company

 

Like you, I continue to be disappointed by the the poor quality of some coins in major TPG slabs. Last year I bought a not-exactly common New Orleans half eagle in an NGC VF-30 slab. The coin looked to be a bit "too light" in color, but, as I hadn't bought a coin in a while and wasn't sure when I'd see another affordable example of this date, I bought it. I subsequently showed it to one of the leading experts on southern gold coins - he said "of course, it has been lightened with baking soda, but [at least] it is accurately graded."

 

And then, at the March Baltimore show, I saw a reasonably common New Orleans half eagle in an NGC XF-40 slab. Although the coin had what looked like original surfaces, it looked like someone had jabbed a pen hard into the obverse, near the truncation of Liberty's bust and there were a couple of serious bagmarks on the reverse as well. Maybe I'm a little too fussy, but I would have called that coin "damaged"!

[Calypso]

Hi Tom,

 

sorry to hear about your back

 

I made the mistake of buying problem certified coins when I first started collecting, kept them because I trusted the seller (a local dealer who has since gone out of business) and just didn't know. One was a civil war era quarter eagle that had been "touched up". It was in a green label PCGS holder and had turned color in a blotch near the rim. This same dealer also sold me a red Indian Head cent in a PCGS holder which started to change color within two weeks, I took it back and he returned my money. He had also sold me raw Indian Head cents and Shield two cent coins I found out later had been recolored. I have avoided copper ever since.

It was these kinds of experiences which caused me to sell off most of my collection in disgust and leave the hobby for ten years, it seemed like everyone was a crook. Now I have a nice library of books and the internet to study and stay informed with including wonderful posts like yours!!

 

I had the pleasure yesterday of reading the new QD Bowers book on US Type Coins. I really enjoyed it and found several interesting passages. Among them, on the bottom of pages 37 and 38 are headings "What Grading Numbers Mean" in relation to third party graders and "Differences within a specific Grade". Informative reading. On page 38 he states:

 

"Somehow, famous numismatists of the past really *enjoyed* collecting coins without all of the grading steps we have today. I never heard a peep of complaint from Louis Eliasberg, John J. Pittman, Amon Carter, Emery May Holden Norweb, Harry Bass or any other legendary numismatist of a generation or more ago. They all knew grading by personal study and experience, evaluated coins offered to them, rejected overpriced and overgraded coins and went on to aquire what they did want".

 

Calypso

[BankNote1]

Somewhere I read, "buy the coin and not the holder"! It is imteresting that the coins from the big name guys wern't any better than the ones you can buy from the rest of us!

 

Another point, never, I mean never buy a coin on the internet that doesn't have a return policy!!!

[truthteller]

TomB,

 

You are absolutely right. I gave up on mail order, ebay, and mail biding for coins years ago for the same reasons you give. Even with well pictured auctions, I just don't trust descriptions given by the auction houses. I have to see the coin in person, or it's a pass.

 

 

 

TRUTH

[Leothelion]

Every time I look at a coin, whether it be on the internet or at a coin show, I always have this brain-numbing question on my mind when making that decision to buy it, "why hasn't anybody else bought this coin?" Dealers travel coin show to coin show, always taking their wares with them wherever they go. And you never know how long a coin's been sitting somewhere before it pops up for sale! To battle this problem, for what seems like a lifetime, I'll keep telling myself that I must know something nobody else does! It's the way of the game, staying on top and winning at every chance you get but that never really happens does it? How many dogs we need to go through, whether slabbed or not until we find that one coin that finally fits ones needs! For the majority of these so called collectors, they buy it, take a look at it and throw it in a drawer and then repeat the cycle! There must be a higher market grade then the technical aspect of it!

 

Leo

[Hoot]

All excellent posts, and a great thread, Tom. I've nothing to add except that a good, honest description of a coin is most often a better descriptor to buy sight-unseen by than a photo.

 

Finding people who describe their coins honestly is difficult at best. I've bought and owned and lost my shirt on my share of lousy certified coins. In my remote situation, it's inevitable, and likely will be repeated. (Every time I've sold a questionably graded or holdered coin, I've always given it an honest description, and have lost money on every one.)

 

Hoot

[James_OldeTowne]

Tom,

 

This is a timely and well though out post. I believe that "problem" coins are a valid part of the market, especially for collectors like me who often can't afford problem-free examples of rare coins. It's the "degree" to which the problem exists, though. I suppose companies like NGC and PCGS take this into account when they certify a coin with what they deem a lesser problem, such as multiple dippings.

 

Thanks for the great thread!

 

James