What’s the problem? Grading coins with defects should be easy. When we developed technical grading to further identify coins, in addition to their weight and photograph, our main concern was to describe their condition of preservation. In order to be precise, we needed to be strict so that the same coin could be described the same as long as it remained unchanged over time. It became obvious that the fewer the number of variables used to arrive at our grade, the more simple and consistent our system would be. Precision and simplicity was the basis for technical grading.
We separated wear, marks, color and problems. Why did it take so long for the major grading services to grade problem coins?
Perhaps they considered their slabs sacrosanct – only nice, problem-free coins should be encapsulated. Perhaps it was about product “image.” Thankfully, the “new” grading services of the 1980s had return policies and grade guarantees because there were so many tooled, damaged and altered coins in their holders that professional numismatists at long established grading services like me were flabbergasted. In the one case when I tried to be helpful to the owner of a large grading service by explaining how his graders could identify the altered frost on the cheeks of many Morgan dollars in his company’s slabs, I was rebuffed with the comment that the coin was only an 1881-S and not worth much. Later, at a Long Beach show I saw a trunk of coins that I learned had been bought back to honor their guarantee. That was then. Today, the major services are doing a great job protecting the public from altered and problem coins.
Grading problem coins using technical grading is easy. You just grade the coin for the amount of wear and state the problem. To illustrate this, how should you describe an MS-67 Morgan dollar that was removed from a slab and then cut in half? “Who cares” is not an appropriate answer here. The coin is still uncirculated. Its surfaces are still virtually mark-free. Additionally, the luster and eye-appeal of both halves of the coin are outstanding. The technical grade for this coin would be gem uncirculated, cut in half. If I told you the cut was from 12 o’clock to 6 through the obverse, every reader could picture that coin exactly as described. Would a grading service today holder such a coin as Uncirculated Details, cut in half? I hope so. I like to think that long ago, the holdouts were dragged, kicking and screaming, into the real world because unslabbed coins returned in body bags were unacceptable to the public. I’ve illustrated an uncirculated 1859 copper-nickel with a rim file. This coin is going into an ICG slab graded Uncirculated Details Rim File.
Although grading problem coins such as AU Details, bent; VF Details, holed; and XF Details, rim file is easy, I learned recently at a show that these coins can present other problems for both dealers and collectors. What are they worth? Commercial grading as used in the marketplace today is supposed to put a value on a coin. Although I’ve had some experience as a coin dealer long ago, I got some fresh insight into placing a value on coins with problems recently at the Ft. Myers coin show. A collector brought a large group of coins to the ICG table for evaluation. He wanted us to encapsulate his best specimens. After I picked the coins out and started to write up his order, I noticed that one of his Seated Liberty dollars had a crudely repaired chop in the field. He decided to sell that coin and one of his Carson City dollars at the show to get a better idea of the actual value of the remaining coins in his collection. His Carson City dollar was totally original and graded MS-62. We had no problem arriving at a fair value that he could expect from a dealer on this example. The Seated Liberty dollar was a different story. This coin was a decent looking lustrous, off-white, about uncirculated example with some attractive golden toning. There were no major marks except for the damage in the obverse field where a 4 cm by 5 cm patch of chased metal partially obliterated a shallow chopmark. The collector asked me to help him arrive at a fair market value to ask for the coin. Using his Coin Market guide in Numismatic News, the retail value of his coin in AU-50 was $970. His coin was better than an AU-55 but with a major problem. The coin jumped in value to $2,300 in MS-60 and was listed as $595 in XF-40 and $430 in VF-20. Without the repair, the coin could easily be offered at over the MS-60 price by explaining to a potential buyer that it only had some “cabinet friction” on the high points of its design. But dealers must ignore the “what-if” part of the equation and deal with reality. I know the actual value of that coin when it is sold will be whatever two parties agree on each time it changes hands. So what’s it actually worth? What is its commercial “grade” – $250, $400, $600, more? How would you price it?
I feel it is always a good idea to attempt to sell a few of your coins every so often when you don’t need the money so you can both test the market and see how desirable the coins you collect are to others. I also recommend that collectors trade out of any of the problem coins they show me at our table as an original coin will always appreciate faster than one that has been improperly cleaned or damaged.