New changes are coming to PCGS grading
PCGS, the major US company that indepently grades coins and other collectibles to their own published standard for a fee, announced in the past few days several changes to their service range that potentially offer their customers (and the numismatic industry) a much clearer idea of just how good their coin is relative to others.
- The new PCGS Secure Plus service "digitally captures the unique "fingerprint" of each coin [they grade], and enters it into a permanent data base."
- Futher, PCGS have announced that they have introduced a new designation under the PCGS SecurePlus system for certain coins within each grade between XF45 and MS68 that are "more desirable high-end coins". Simply put, such coins are given a "+" designation, which according to PCGS means they "could command a significant premium" over other coins within the same PCGS grade that do not have that "+" designation.
- The final change that PCGS has recently announced is that they have updated their holders by adding new anti-counterfeiting features to the label.
For those of you that have little interest in having your much-loved coins encased in a plastic slab (rather uncharitably called "coffins" by some), these new service additions won't really float your boat. For those of you that insist that your coins only come in PCGS holders, these new services should give you greater confidence in the designations they provide. For those of you that use other third party grading companies, this really should have you asking what their next move will be!
Here's a bit more detail on these changes:
Coins graded through Secure Plus will be scanned by an optical device that maps the surface of the coin, thus creating a "digital signature" (ie a photo alongside a chart of its characteristics) that can be used by PCGS for later reference.
The digital signature is a unique identification of the coin that is intended to withstand "coin doctoring", and to deter collectors from removing the coin from the slab and resubmitting it to PCGS in an attempt to have it graded higher. It can also be used to determine if a coin has been "doctored" (such as by being artificially toned for example) since a previous submission.
For many Australian collectors unfamiliar with the independent grading system in the USA, these past few paragraphs may sound like complete gibberish, however the secure plus service, if it is implemented and doesn't encounter any serious hurdles along the way, could ensure that there is little incentive for collectors to play "The Crack Out Game" in future. What in blazes is the crack out game you might ask? Let's just say that it involves a collector measuring the potential upside in playing the odds, then gambling accordingly. If you're not familiar with it, you should certainly follow that link earlier in this paragraph, especially if you are a keen user of third party grading services.
Just How Successful WIll This New Photo Identification Service Be?
To be honest, I think the chances that this new service is successful without any hitches over the long term is slim. I say that because this digital imaging is a brand new technology, and according to their own records, PCGS have graded no less than 19 million coins since they were established! This incredible number of coins says to me that there has a possibility that something may not go according to plan at some stage in the coming years. I have no idea how this technology works, but given the creative minds that are at work in dipping, retoning and generally screwing around with coins all around the world, they must surely come up with some way of beating the system. The guys at PCGS certainly mean business, and they've spent two years developing this system, so fingers crossed for them and their customers (me included!) it goes according to plan.
In my own experience, population records (such as those generated by PCGS submissions) are a far better guide to rarity than mintage figures. The figures in the PCGS population guides have been distorted in many areas by this concept of "The Crack Out Game" (go back and click the suggested link earlier to understand why.
Due to the relatively low number of Australian coins that have been submitted to PCGS to date, I don't believe that this new service is going to fix a particularly mecaning problem - simply because I don't think there was much of a problem with population distortion with Australian coins graded by PCGS.
What of the new "+" System?
Again, I don't see this impacting us in Australia too much, specifically because I don't think our collectors are so refined they will distinguish a significant difference between one MS 64 coin and another. Perhaps when the slabbed population grows here in Australia it may be required, but I think the appeal of this new "+" designation is mainly for US collectors, where populations in certain grades must surely number in the thousands of coins.
What of the new tamper evident slabs?
There have been a number of stories in the past year of a few counterfeit slabs coming out of China, which if these new tamper-evident holders are able to prevent from surfacing again, is again a productive development.
I am curious how Australian collectors perceive these developments - what do you think of this new technology? Does it have legs or is it Popular Mechanics stuff? Do you see it as being an impermeable barrier to counterfeit and doctored coins? How do you think these changes will affect us here in Australia?
One develpment that comes to mind as I think these changes through is that a two-tiered pricing system may develop - some collectors will place more confidence in the new holders, and will thus pay a premium for them. This will give owners of coins already in PCGS slabs an incentive to have their collection re-graded under the new system. Surely not!