Interesting post across the street: Modern grade guarantee and consequences

[Houston Investor]

Hilarious Story - People who pay big bucks for mods in 70 are suckers. A 1998 ASE in Proof is about a $35 - $50 coin; no more. And someone would pay $1000 for one because it is in a Proof 70 slab? I guess some of them, like sheep rushing over a cliff, are just begging to get ripped. What a laugher this story is.

 

Looks like this guy paid some expensive tuition . What does he think that these coins are in stasis - of course they are going to develop toning as time goes by - unbelieveable! And he expected PCGS to reimburse him at some big retail amount.....would tell him too bad so sad.

[MikeKing]

I actually felt sick to my stomach clicking on the link and being back to the land of leprosy and repression. I'll have to be more careful next time.

[jesbroken]

One thing I would feel concerned about is that the customer said in his post that he purchased extra coins of the year in question. Did they also milk spot or did only certain coins. If they also milk spotted therein may be a concern as to the plastic holders. I have several 86 and 87 that have no milk spotting of any kind that are stored in nonpvc flips. Thats 20 years.

Michael-I agree with you wholeheartedly that if the wholesaler sold to the customer he should maintain a substantial presence between his customer and pcgs.

That's not what is occurring. Also by David Hall's own word this has not been handled in a timely manner(dropped the ball). I feel badly for the customer, for he has not only lost in coins but in value growth over this time.

Jim

[Zoins]

Can milkspotting be considered a natural part of the ASE aging process? It's not like it's uncommon

 

Would it have been better for him to crack, neutralized and resubmit? Or should TPGs offer to neutralize ASEs for you, esp. since you have to submit some of them in sealed Mint boxes?

[Houston Investor]

Taking any link to that nut house across the street makes me angry but this one shows they sure have some real turkeys over there. I think if I were David Hall I would just pull the plug on that whole forum. I would not waste my time trying to reply to those folks or dignify their trash.

 

If this guy was stupid enough to loose big money on mods like that I do not believe the dealer or the TPG owe him a thing. I find it hilarious he thinks they do - what there is a numismatic Santa Claus? Wake up and smell the coffee guy - u got ripped ! Pay your tuition and move on.

[MarkFeld]

.....If this guy was stupid enough to loose big money on mods like that I do not believe the dealer or the TPG owe him a thing. I find it hilarious he thinks they do - what there is a numismatic Santa Claus? Wake up and smell the coffee guy - u got ripped ! Pay your tuition and move on.

I think it's rude and unfair to characterize the collector that way, when he apparently merely wanted to have his coins (which had developed spotting) replaced or restored to the condition they were in at the time he acquired them.

[MAULEMALL]

.....If this guy was stupid enough to loose big money on mods like that I do not believe the dealer or the TPG owe him a thing. I find it hilarious he thinks they do - what there is a numismatic Santa Claus? Wake up and smell the coffee guy - u got ripped ! Pay your tuition and move on.

I think it's rude and unfair to characterize the collector that way, when he apparently merely wanted to have his coins (which had developed spotting) replaced or restored to the condition they were in at the time he acquired them.

I agree..

[Houston Investor]

.....If this guy was stupid enough to loose big money on mods like that I do not believe the dealer or the TPG owe him a thing. I find it hilarious he thinks they do - what there is a numismatic Santa Claus? Wake up and smell the coffee guy - u got ripped ! Pay your tuition and move on.

I think it's rude and unfair to characterize the collector that way, when he apparently merely wanted to have his coins (which had developed spotting) replaced or restored to the condition they were in at the time he acquired them.

 

Well I am glad we got that out of the way Mark, some poor little collector got ripped and we are such jerks if we expect him to take responsibility for making a bad investment decision - maybe you should send him a 10% off coupon.

 

The fact that coins develop spotting is a numismatic fact of life. What this particular collector is now expecting from the TPG is senseless. Many times spotting / toning happens after coins have been freshly dipped or removed from their mint holders, languishing in a flip (worse if it is PVC) and exopsed to the atmosphere - the spotting may show up months later. Ever read the coin preservation handbook? Unless coins are kept in a vacuum they will develop toning, spots, biological attack, etc.

 

Rude and unfair? I hardly think so - reality is more like it. Maybe you should take some spotted coins around the bourse at a show Mark and see how sympathetic the dealers are. If your lucky, someone might sell you some jewel luster. People who pay $1000 for a Proof ASE (TPG 70) which is merely a $50 coin are not worthy of sympathy. Knowledge is king in numismatics and the ignorant end up being the end user in the food chain (paying the most). My advice to a collector - leave your modern coins raw - then if the coins develop unattractive toning you can dip them, no problem. If you are a collector, you need to take responsibility for your decisions - no dealer or TPG is going to bail you out if you make a bad investment decision.

[Zoins]

The issue seems pretty simple to me.

 

(a) The coins developed spots after they were graded PCGS PR70DCAM

 

(b) Do the coins with spots still grade PCGS PR70DCAM? If PCGS would still grade these coins PR70DCAM in the current state, there is no issue.

 

© If the coins would not regrade as PCGS PR70DCAM, are they covered under the grade guarantee? If they are not covered under the guarantee there is no issue.

 

(d) If the coins are no longer considered PCGS PR70DCAM and they are covered under the grade guarantee, should PCGS honor the grade guarantee or just hope the problem will go away?

 

Maybe it's time to remove ASE milkspotting from the PCGS grade guarantee or say PCGS PR70DCAMs can have milkspots?

[MarkFeld]

The fact that coins develop spotting is a numismatic fact of life. What this particular collector is now expecting from the TPG is senseless. Many times spotting / toning happens after coins have been freshly dipped or removed from their mint holders, languishing in a flip (worse if it is PVC) and exopsed to the atmosphere - the spotting may show up months later. Ever read the coin preservation handbook? Unless coins are kept in a vacuum they will develop toning, spots, biological attack, etc.

And the grading companies are aware of that numismatic fact of life when they assign the MS/PR 70 grade. In doing so, they take the risk that the coins might develop problems, the type of which might cause the coins' owners to try to take them up on their grade guarantees.

 

Classic coins graded less than MS/PR70 have also been known to develop problems in the holder after having been graded, though less frequently than modern coins. That doesn't make the buyers of those coins "ignorant" or mean that they got "ripped", made a "bad investment decision", etc.

 

This isn't just about MS/PR70 coins or just about modern coins - it's about (any) coins changing/deteriorating in the holders and whether/how the grade guarantee applies. I seriously doubt that your attitude would be the same if you were the owner of an expensive non-modern coin that went bad in the holder.

[michael]

And the grading companies are aware of that numismatic fact of life when they assign the MS/PR 70 grade. In doing so, they take the risk that the coins might develop problems, the type of which might cause the coins' owners to try to take them up on their grade guarantees.

 

Classic coins graded less than MS/PR70 have also been known to develop problems in the holder after having been graded, though less frequently than modern coins. That doesn't make the buyers of those coins "ignorant" or mean that they got "ripped", made a "bad investment decision", etc.

 

This isn't just about MS/PR70 coins or just about modern coins - it's about (any) coins changing/deteriorating in the holders and whether/how the grade guarantee applies. I seriously doubt that your attitude would be the same if you were the owner of an expensive non-modern coin that went bad in the holder.

 

 

[Fergie]

Hi Mark Feld, (new member " Fergie" here), and I gotta say hey !

Hats off to you for being a fine Numismatist !

Cheers for standing up to the GOD Family !

 

Look, the issue is too simple, so no further sqwuaking on this is needed.

Did I misspell Squaking ? SSKKWWAAUUKKINNGG !

 

What is needed is a plan. A plan to find a way to give US collectors more real power. Genuine leverage to use to get things done when we feel we need to play hardball too. I dunno what that would be. Maybe our version of the ANA, with National press coverage. By the Collective for the Collective.

 

OK, I'm stupid so I will shut up now.

See Ya' all

[Houston Investor]

Why should the TPG's be responsible for a coin going bad in a holder? They have no control over the environment the coins are stored in. If a collector stores his coins in a hot / humid environment like a garage, the coins will have a big chance of going bad as they react with this atmosphere. In addition, coins submitted in PVC flips have a good chance of developing that ugly green film later on. This could appear months after certification.

 

It is the responsibility of the user of TPG;s to be familiar with the risks involved in long term storage and potential reaction to the atmosphere or other chemicals. I would suggest reading the Coin Preservation Handbook.

 

From a buyer's perpescitve I have probably cracked out, dipped, and resubmitted dozens of coins which needed a dip because they went bad in the holder either from oxidation or PVC. For the most part these were coins I had purchased in a lump sum deal, factoring in my offer the fact that a portion of the material would need to be conserved therefore having an addtional expense. This is simply a cost of doing business I take responsibility for. Teletrade raw coin service is the way to go with your dipped final product - there are no grading fees up front. I remember buyin a collection of about a dozen commems from a walkup seller at a show which were in plastic flips but had ugly PVC haze. I purchased them for MS 60 Bluebook. I dipped all of them and sent them to Teletrade raw coin service and many of them went MS 63 to MS 65 realizing about triple what I paid for them. Probably about a 60 day turnaround on the flip, and a super investment return on the $1.95 bottle of jewel luster !

 

From a sales point view and as a dealer I consider TPG coin deteriation a moot issue - show sales are final, mail order sales carry a 7 day return priviledge. After this period, no returns are accepted.

 

Yet indeed, many individuals very foolishly believe that the grading service or a dealer should reimburse them for coins that go bad in the TPG holder due to oxidation, exposure to salt air, humidity, and PVC. Unbelievable!

[Fergie]

Hi to Parker

I dunno if your post speaks to mine or not, I have too little experience in forum posting.

 

But after re-reading our posts I can say I do agree with you on one point.

TPG's should not have to, or be forced to, accept responsiblity for turned coins.

After all, they graded the current condition coin, not the crystal ball version.

But thats not our point here.

 

It is that the buyer bought with expectation of the Guarantee.

He may not have bought without it.

And that Guarantee is made by TPG, and even has track record of being used.

So the TPG is the one that put themselves "on the spot", not the buyer in this instance.

Do you agree ?

 

Fergie

[Houston Investor]

Accountants put themselves on the spot when they give an audit opinion. But this audit opinion is a point in time and the auditors comments reflect this. It is the responsibility of the investor or lender to judge for themselves the potential profitability or liquidity of the company over time. One tool for this is financial statement ratios.

 

And I agree TPG's put themselves on the spot when they grade a coin - but anyone with half a grain of sense on the bourse knows this is a point in time. Perhaps a TPG may not be aware of what they are really agreeing to or even care as far as the long term and reality of coins "going bad" in holders. Certainly TPG's from a realistic point of view need to qualify their guarantee but probably they regard this like damage control similar to product warranty expense. If a TPG were to become bankrupt due to claims from "bad coins" just how would you collect from them? If a TPG starts qualifying their opinion then short term profits may go down. Long term? They may not be planning to be around!

 

If I were an owner of a large grading service like PCGS and that forum across the street was causing a lot of rukus, I would shut it down. As far as the ASE collector vs PCGS it will be interesting to see what the courts rule. I doubt the guy has the money to pursue this in court for any long extended period of time compared to the financial resources the TPG probably has set aside for this type of contingency.

[Fergie]

I better see your take now.

Correct me if I state it wrong.

Yours;

TPG's did the guarantee much as any business does warranties.

Warranty is not intended to last forever and ever.

It's just a happy camper guarantee, we promise it wont suck anytime soon.

Collector should suck up the problem because we as consumers are getting what we paid for. The item was delivered as promised, you used it for awhile and what the hey, your shovel is gonna rust and birds will *spoon* on your cars shiny paint, right ! So a realistic expectation from the consumer is that our coins will change, we know this, and it is improper to make unrealistic demands on the TPG later down the road. We can't slam commerce. It needs to function in a setting which allows for these occurences. They are not GOD and can't fix everything, nor was it ever their intent to do so.

 

Any objections there Parker ?

 

OK, I'll guess not and go on.

 

 

I agree with you fully. But re-fresh my memory, how much time elapsed until the problem was first discovered ? Not much, like less than a year ?

 

What I think too is that it is very possible that the coins could have received contaminant moisture from too many ways. My hands become very warm and humid after handling too many coins. Rain,Perfume,Hand Lotions,AC systems with dirty ducts or filters, flips from boxes sprayed with bug killer, Salty sea breezes, oils from the minting process, ....I can go on all day !

 

I think your solution works for most. We do it every day right ?

 

But I think this case has two final solutions needed to be applied.

 

1- work out a payment for the guy. It's not been that long.

( I dont think if I was the guy that I would push for a big settlement, I believe for the hobby's sake that I would accept even half the value, as I may be at fault here and how would I even know for 100% sure that I was not, or my dealer was not)

 

2- The TPG will need to decide;

 

A- Keep the forever guarantee but do something to neutralize the spotting

problem.

 

B- Change the guarantee and do not be concerned if coins spot.

 

As a sad result, I see major change coming in the warranty side, but this is just

the way it is to me.

 

Later Tater

[MarkFeld]

PCGS and NGC also guarantee (red) copper coins, which collectors know, often turn/mellow to red/brown, or even brown, even with careful storage. Therefore, while one might question the wisdom of that guarantee, I believe it would be unfair to criticize a buyer (who had paid a large premium for the color) of a red copper coin that went bad and then attempted to take the grading company up on their guarantee.

 

I think that the original post to this thread raised a good point about whether certain guarantees by grading companies are wise or not. However, it also unfairly slammed a buyer for attempting to make use of a guarantee which he was aware of, and which others had availed themselves of previously.

 

Fergie, welcome to the discussion.

 

Edited to add:

 

Many buyers have greater confidence, knowing that a guarantee is in place. That often leads to higher prices for certain coins, which can in turn, lead to more submissions and profits for the grading companies. I have no doubt, that even though grading companies take losses when they honor such guarantees, the extra business that they have generated easily more than makes up for it. And remember, the grading companies, themselves, are the arbiters of whether a guarantee needs to be honored, so they have a huge advantage.

[DirtyGoldMan]

.....If this guy was stupid enough to loose big money on mods like that I do not believe the dealer or the TPG owe him a thing. I find it hilarious he thinks they do - what there is a numismatic Santa Claus? Wake up and smell the coffee guy - u got ripped ! Pay your tuition and move on.

I think it's rude and unfair to characterize the collector that way, when he apparently merely wanted to have his coins (which had developed spotting) replaced or restored to the condition they were in at the time he acquired them.

 

Well I am glad we got that out of the way Mark, some poor little collector got ripped and we are such jerks if we expect him to take responsibility for making a bad investment decision - maybe you should send him a 10% off coupon.

 

The fact that coins develop spotting is a numismatic fact of life. What this particular collector is now expecting from the TPG is senseless. Many times spotting / toning happens after coins have been freshly dipped or removed from their mint holders, languishing in a flip (worse if it is PVC) and exopsed to the atmosphere - the spotting may show up months later. Ever read the coin preservation handbook? Unless coins are kept in a vacuum they will develop toning, spots, biological attack, etc.

 

Rude and unfair? I hardly think so - reality is more like it. Maybe you should take some spotted coins around the bourse at a show Mark and see how sympathetic the dealers are. If your lucky, someone might sell you some jewel luster. People who pay $1000 for a Proof ASE (TPG 70) which is merely a $50 coin are not worthy of sympathy. Knowledge is king in numismatics and the ignorant end up being the end user in the food chain (paying the most). My advice to a collector - leave your modern coins raw - then if the coins develop unattractive toning you can dip them, no problem. If you are a collector, you need to take responsibility for your decisions - no dealer or TPG is going to bail you out if you make a bad investment decision.

 

Derek, is that you?

[Fergie]

 

Derek, is that you?

 

Hi there SageRad,

I dunno if that referred to me, Fergie, or not but just to clarify, no I am not whomever that would be. I am new to NGC forums, and any forum on the planet for that matter. Long time hobbyist though.

 

Hello Mark, and thank you for the welcome !

 

Fergie

[Fergie]

Hi again SageRad,

I just have to add this....

 

Lets skip the argument of paying your dues. I agree and have paid mine. It's a good thing, like reading a book, you learn from your "tuition"

 

Lets focus on the timeline for one, and the what Mark said, "the collector is merely taking the TPG up on their offer."

 

Why is it not fair for him to want a settlement after just a short time period ?

For these coins I would honestly expect them to last a very, very, long time in the holders. TPGs even promotes this very aspect of having the protection of a slab, right?

 

As to Marks point, the buyer did not make the contract to purchase with said warranty, he is merely taking them up on their offer. And in a timely manner to boot.

 

I just can not agree with bashing him for THIS POINT.

 

How much, or in what way, I dunno.

I also do not know how much he would be asking, nor if anything was offered.

 

 

See ya, Fergie.

[bochiman]

I actually felt sick to my stomach clicking on the link and being back to the land of leprosy and repression. I'll have to be more careful next time.

 

 

Hold it....is that hyperbole or did you ACTUALLY feel sick to your stomach? If you did, just from reading a link from PCGS, you really should get medical help.

 

Understandable you are still upset about being kicked off but if it is causing you to be sick, get help.

 

That said, interesting thread to see resurrected....

[DirtyGoldMan]

Hey, Fergie,

 

I was directing the question to Parker. His remarks are uncannily similar to those of a dealer who dropped in on the forum ATS last fall.

 

As for this "tuition", that's a euphemism used to justify a collector being taken advantage of by a more knowledgeable seller. I agree that the owner of the coin that has been guaranteed by a TPG has the right to take up the TPG on the guarantee if the coin does not live up to the standard for the coin as indicated on the insert.

[Houston Investor]

Fergie - you have some good concerns and points.

 

But how much should the TPG pay when they go bad? What valuation basis would you have them use? And who is going to enforce this - the ANA? With what? I don't believe there is a court in the country that will hold the TPG's liable for something they can't control and even then their potential liability from a guarantee they can't really meet is in the same class as unsecured debt if push really came to shove. Think about it. Be ready to dip those coins guy!

 

Tell you what - send your coins gone bad back to the TPG and see how much they write you a check for. Thats the bottom line anyhow regardless of any of the pages of rhetoric those people ATS may post.

 

[Fergie]

Me, or him ?

Me, I already said, half price would be fine.

 

Him, I honstly don't wish to advise on without speaking directly with him on the matter, to get more info.

 

Value to go by, Auction archives and advertisements.

 

Thanks Parker,

Fergie.

[Fergie]

Enforce what, aren't we in the two party negotiation stage at this point ?

Fergie.

 

Edited to add;

I see, for future deals you mean ?

Well, I think TPGs will be looking into their way to deal with them.

Clean em first, just not grade em, change the guarantee, they will figure it out.

 

One thing too, is that this needs some time to pan out rightly, and myself, I would put the hobby as a whole above my personal financal concern. Lets not upset our own fellowship I would say.

 

Heck, if i was mad enough, I'd donate the bunch to Numismatic science projects at the ANA ,, for YN's no less

 

Thanks Parker, see ya

Fergie.

 

edited for spelling

[Houston Investor]

If we are you know more than me. I fold my hand.

 

Well I am gonna have a fine brew and look at my nice MS 65 Walkers and hope I do not see any spots.....

[Fergie]

Parker, I certainly do not take it that way, I so agreed with you on just about everything and I really enjoyed discussions with you. All good here.

 

 

65 walkers mm, I am not good at grading them, so I only have the one 46D MS65. Funny, to me it looks like a very nice, solid 66.

I bought it because I wanted some coins for a type set. It's pretty, full white.

Got a living color example for my set ?

 

 

Whats in the "brew" Parker ?

 

Hey, have a good evening sir, I sure look forward to meeting some of the guys i met from the forum, enjoy the brewskie,

Fergie.

[World Colonial]

I agree with you although I am not familiar with the guarantee. Unless it is the holder itself that caused the damage, I do not see the TPG at fault. They are not (or should not be) responsible for how collectors store their coins. Also, if a coin is not chemically stable and changes after it is graded, I do not see that as their fault either. (I store most of my coins in a safe deposit box. Most of my better coins are in TPG holders and also in Intercept Shield holders which hold the slab. If the coinS are chemically stable as I believe they are, what I have done is about all anyone can do in my opinion.)

 

To give you an example, I bought a silver coin from Superior Galleries raw, I submitted it to NGC at a coin show and the grader previewed it and told me it had PVC residue that needed removal. (I thought that a major auction firm should have listed this in the description, but that is a different issue.) So I had it conserved and then it came back AU-55. If I had just sent it in and they had graded it and then it changed later, how is that their fault? It was up to me (and any other collector) to be knowledgeable enough to identify this problem and get it corrected.

 

Would I try to collect on the guarantee if one of my coins deteriorated in the holder? Sure, I would at least look into it. Would I change the opinion I stated here if I could not collect and blame the TPG ? I do not think so. But if I did, that just means that I never believed what I wrote here in the first place.

[Houston Investor]

Fergie thanks for your input. This has been an interesting thread. I recently bought a 2006 $50 Gold Buffalo graded ANACS MS 70 (ebay) for essentially what I would have paid for a raw one. Consequently my exposure can't be that much. I bought primarily as a bullion investment. Hey I just might start a set.

[jesbroken]

 

After becoming educated by the many posts to this thread, I have developed a final outcome that relegates the TPG to these steps in order to offer closure:

 

PCGS should offer

 

1) Remove the coin from the holder and dip it.

2) Regrade it

3) Reslab it

 

All at no charge.

 

I did not agree at first but after thought instead of yelling I have come to reason that the milk spots appear to be a natural occurrence that everyone knows about and has known about previous to the buyers purchase of the coin. If something out of the ordinary happened to the coin while encapsulated by PCGS then maybe they owe value replacement,. not so in this case. I feel for the purchaser as we all do.If you have been in the coin market for very long you have made a great deal that wasn't so great later on and sometimes through no ones fault. You just suck it up and go on.

It is real easy to feel so hard for the buyer as the little guy and easy also to feel hard AT the TPG as the big guy. This should not be the case here.

Thanks for listening

Jim