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GRADED COINS

Coins that have undergone a thorough inspection process by a major grading service are referred to as certified or graded coins. While coin grading may seem unnecessary to some, this process can allow one to buy with confidence in a coin’s authenticity, condition and market value. Graded coins carry higher premiums than non-graded coins, but for many this additional premium is worth the peace of mind that comes with a certified coin.

WHY HAVE A COIN GRADED?

There are several reasons to have a coin graded. The primary reasons include certifying the coin’s:

• Authenticity
• Bullion content
• Condition
• Market value

Counterfeit coins do exist and unfortunately may be sold to unknowing investors. Having a coin graded and certified by a recognized grading service virtually eliminates this risk allowing one to know exactly what they are getting. There are several established and respected grading services in business today, with NGC (Numismatic Guarantee Corporation) and PCGS (Professional Coin Grading Service) being two of the most well-known and used.

WHAT IS INVOLVED IN THE GRADING PROCESS?

Although different grading services may vary in their grading methods, the same basic principles always apply. These methods are quite stringent, and the process is thorough and extremely detailed. The basic process goes like this:

• Coin or coins are received by grading company
• Coin or coins undergo thorough, multi-stage inspection process
• Coin or coins are encapsulated
• Coin or coins are then returned to the customer

The first stage of the grading process is the receipt of coins by the grading company. Once the coins are received, the grading service will verify they have received the correct coins to be graded by checking the coin against the order. Once they have confirmed they have the correct coin or coins, they will barcode the coins and store them in a secure vault. If the coins include variety designations, they will also be examined by a numismatist specializing in variety attribution.

Every coin is examined by multiple numismatists. Professional coin graders may be prohibited from involvement in the purchase or sale of coins in order to maintain the highest level of objectivity and impartiality. As the coin is examined, each inspector will enter a grade for the coin into the company’s system. Additional information may have to be included on the coin’s report. These supplemental pieces of information may include such issues as whether or not a Franklin Half Dollar displays full lines on its Liberty Bell, or whether a coin contains specific types of alloys that may affect its color or appearance over time.

Surface conditions as well as any imperfections are closely examined and detailed in the coin report. Coins that have altered mint marks, dates or are not genuine are not eligible for encapsulation.

Once the grading and certification process is complete, the coins are ready to be encapsulated. The encapsulation process is designed to ensure that all pertinent information such as type, date, mint mark, metal and condition is accurately displayed.  Any special designations as well as the coin’s grade are also included. All information on the coin is transcribed onto a barcode that is inserted into coin’s label. Third party grading services such as NGC and PCGS utilize transparent plastic cores to keep the coin securely in the holder. After the labeling process has been completed, the coin and sleeve are cleaned one final time with compressed air to remove any dust or residue.

Following the grading and encapsulation processes, the coins will go back to the grading room for a final inspection. These grading services will do a final check to ensure complete accuracy and proper labeling. If the coins and sleeves look perfect, they are ready to be shipped out back to their owner.  A grading service will typically ship coins out in heavy duty cardboard boxes that contain dividers. The dividers prevent any coin from coming into contact with another coin while in transit. In addition, these parcels often contain tamper evident packaging and will be shipped using unmarked, discrete methods.

WHY BUY GRADED COINS?

While graded and certified coins carry higher premiums than non-graded coins, they can offer buyers some distinct benefits. Some of these potential benefits may include:

• Confidence in what you are buying.
• An accurate idea of the coin’s market value
• Knowledge of any marks or imperfections on the coin
• The encapsulation process will keep your coin in excellent condition for many years to come
• The potential for an increase in premiums

Graded coins are certified for authenticity, condition and purity. By purchasing graded coins, one can nearly eliminate counterfeit risk and buy coins with peace of mind.