there is no spoon
PCGS to no longer guarantee RD/RB for copper
From an e-mail I received seconds ago:
There are 7,320,437 reasons that show,
When it comes to Your Coins...
PCGS puts its money where its mouth is!
Here's what the PCGS Grading Guarantee does (and doesn't) do for you and your coins...and here's also a few changes in the way the PCGS Grading Guarantee works.
For the past 24 years, the Professional Coin Grading Service (PCGS) has offered collectors and dealers the strongest assurance of grading accuracy and independence in the rare coin market. A strong guarantee was one of the tenants upon which PCGS was founded. We were the first third party grading company to actually guarantee the grade and authenticity of the coins we graded.
For 24 years we've stood behind the service we provide to you not with a money back/fee returned policy if we make a mistake...not with a "we're sorry, we'll return your grading fee or give you free grading" policy if we make a mistake...but with an actual cash guarantee for the market value of the coins we grade and authenticate.
They say that talk is cheap and money talks. So when it comes to the validity of the PCGS Grading Guarantee we'll let the money do the talking. Here are the cold facts about what we've done in the past 24 years.
In the past 24 years, PCGS has (as of Dec 1, 2009) graded 18,784,536 coins with a declared value of $19,138,747,536. That's 18 million coins worth over 19 billion dollars!
In the past 24 years, PCGS has paid out $7,320,437 under the terms of the PCGS Grading Guarantee. When we make a mistake that involves your coins, we pay for our mistake. It's that simple.
Here are some detailed figures of the money we've paid out under the terms of our grading guarantee. The following is the total amount paid in each of the last six calendar years;
2009 (thru Dec 1)...$498,798
You'll note that the cash figures are increasing, but this may be explained by the fact that coins are worth more today than they were in 2003. The huge amount bought back in 2008 was probably a "perfect storm" aberration (January, 2008 was not a good month for PCGS...see below).
The 12 most expensive mistakes we've paid for are as follows, and we're not doing this to show off (in fact, it's actually admitting our biggest mistakes very publically). We're doing this to let everyone know that we stand behind the work we do for you with cold hard cash. We take our job seriously. We want to do the best job we can for you. And if we make a mistake, we'll pay for it.
Here are the twelve most expensive PCGS Guarantee "buy-backs";
1794 Silver dollar AU55 $575,000, January, 2008. This was a beautiful looking coin, but on close examination, the hair had been reworked and the toning was actually not original. It was obviously a very skillful doctoring job and it fooled a lot of people.
1849 Mass & Cal $5 AU55 $150,000, June, 2006. This is a very rare territorial gold coin that turned out to be counterfeit.
1792 Half Disme XF45 $150,000, January, 2008. This coin had actual been flattened, probably around 1800, and did not look right at all. We shouldn't have missed this one.
1969-S double die Lincoln cent MS65RD $80,000, November, 2003. This coin had been doctored. We missed the doctoring and the coin "turned" in the holder.
1861/57-S Clark Gruber $20 MS63 $75,000, November, 2007. This coin had been known to the coin community for decades. In fact David Hall had it at coin shows for sale in the mid-1970s. But research eventually showed that this coin, and several other Clark Gruber rarities, were actually counterfeits that were probably made in the 1950s or 1960s.
1861 Clark Gruber $20 (three) MS62s $55,000 each, January, 2008. Same type of circa 1950s counterfeits as coin above.
1899 Indian cent PR69 $50,000, February, 1988. This gorgeous proof Indian cent later developed a huge copper spot covering the face of the Indian. We bought the coin back and hung it on the grading room wall with a sign that said "The $50,000 Spot" and we told the graders to be really careful when handling copper coins.
1908 $20 St. Gaudens PR63 $45,000, July, 2008. This matte proof Saint had been improperly cleaned or conserved or doctored or whatever you want to call it. We missed the subtle surfaces problems which later became not so subtle as the chemicals used by the "doctor" reacted on the coin.
1963 Lincoln cent PR70DCAM $40,768, April, 2004. This perfect Lincoln proof later developed a few minor spots. Not really our fault, but it was covered by our grading guarantee.
1849-D gold dollar MS64 $40,000, July, 2008. This was a beautiful, very high grade Dahlonega Mint that unfortunately had a planchet lamination on the rim the broke loose and negatively effected the coin. This was not really a grading mistake, but an unforeseen problem covered by our grading guarantee nonetheless.
Bottom line...we're the experts, but even experts make mistakes. That's why we have the PCGS Grading Guarantee, so you don't have to pay for our mistakes.
Here's is a link to PCGS Grading Guarantee...
which gives the details of the guarantee and how it works, plus some very specific details and examples of what the guarantee does and doesn't do.
For example, if we overgrade a coin, it's covered by the PCGS Grading Guarantee. If we miss some doctoring on a coin, it's covered by the PCGS Grading Guarantee. But if there's a mechanical (clerical) error on the holder of the coin...let's say the coin is dated 1936, but the holder says 1937...the PCGS Grading Guarantee doesn't cover an obvious clerical error that shouldn't fool anyone.
If you own PCGS graded coins or are considering purchasing PCGS graded coins, you should go to the link above and review the terms of the PCGS Grading Guarantee.
We are also making two important changes to the PCGS Grading Guarantee effective for PCGS graded world coins and copper coins graded or sold after January 1, 2010. For world coins (i.e. non-U.S. coins), we will have a limit on our guarantee of $10,000 per coin. And for Chinese coins, we will have a limit on our guarantee of $1,000 per coin.
We've also made a change in how we handle the guarantee of color for copper coins. The fact is that color for copper can change depending upon where a coin is stored. The villain is humidity, and if you have mint red copper coins stored in Hawaii or Florida, for example, there's a good chance that the environmental factors can alter the color of the coins. This is obviously beyond our control so consequently we will not be guaranteeing the color of cooper coins graded or sold after January 1, 2010.
For 24 years we've been standing behind the service we provide you with a cash grading guarantee. We intend to keep providing you with the best possible grading and authentication service and the PCGS Grading Guarantee to stand behind that service for the next 24 years and many years after that!
When it comes to your coins...
PCGS puts its money where its mouth is!
So if I'm reading this right, PCGS has gone the way of NGC and has stopped guaranteeing RD and RB for copper coins.
Senior Errer Collecktor
I hope they mean that copper coins received before January 1, 2010 would be guaranteed. Otherwise, we might as well say that door is already closed due to processing time at PCGS. I guess express service might do it.
Yeah I just read this too. The 'twelve most expensive buy-backs' part really is a drag.
Heh, watch the market for 'blast red' older coins tank a bit, since there's no real guarantee any more.
The guarantee is still there as long as you don't sell. Maybe the next "owner" of my RD and RB copper coins will take a 99-year lease instead to preserve the guarantee.
It's not clear whether transfers also destroy the guarantee or if it's just sales. Might transfer ownership of my coins to a trust before the end of the year so that my heirs will also be able to use the guarantee if necessary
In any event, it's disappointing that they are not at least matching NGCs 10 year guarantee. I will now have NO confidence in the color grade designated on PCGS holders if I can't even have the coin covered if the thing turns in the holder and grows spots in at least the first year or two or ten after it was graded.
PCGS to no longer guarantee RD/RB for copper
Don't have any problem of their guarantee for slab certification. No worry at All. Y? you guess it!
I got this e-mail too. In the light of what they did to my coins (repeated ultrasonic cleaning) in the past I had to laugh at this so called "guarantee." This is one establishment which is self-hyped. I have absolutely no use for their hubris. They are guaranteed not to get any of my business!
Last edited by kidkayt; 12-05-2009 at 09:26 AM.
Rare coin dealer
Curiously, how would/could you know if they had done what you accused them of?
Originally Posted by kidkayt
May I ask who you would use?
Originally Posted by kidkayt
I can understand why PCGS needed to make the change on copper.
Look at all the slabs out there from different services that no longer reflect the correct color. PCGS had to change the policy at some point.
The "or sold" part is going to be really tricky for them to deal with.
I wonder how expected/unexpected this was for the big-time players in copper. I don't collect copper and have generally found it all a bit of a mystery. I will also say I suspect PCGS felt they had to make this change and probably considered numerous alternatives, like the NGC 10-year guarantee.
I have always generally liked PCGS and don't assume the sinister motives that some do. I am sure they carefully considered this (despite the rushed nature of the spelling in the e-mail, but that almost seems market-acceptable -- see Laura Legend's reports) and made a decision they thought necessary.
I would like to hear what Mark, Charmy, Leadfoot Mike, Illini, Doug and others knowledgeable about copper think about possible consequences.
1. I am not sure of the effect on CAC and the red copper it stickers. I am sure they have been careful about what red coins they sticker but their guarantee may now be the most important one on PCGS red coins they have stickered (I may have this wrong).
2. I would think this would help NGC as long as they don't follow suit.
3. I would think a lot of people will be interested in the price PCGS red copper coins bring at FUN 2010.
"Take back Pasadena, take back El Salvador
Take back that country club they're trying to build outside my door!"
--Tom Petty and Bob Dylan
I don't like red copper anyway. I have some wheaties that way. I actually like the the fiery rb that comes with more of the coin brown. So to me this does not bother me and I doubt I will ever own any large cents that are other than brown. So the change really does not bother me.
I think one of the first things you are going to see is a huge influx of review submittals for copper coins. There are countless examples out there slabbed as Red that are no longer Red, same for RB. PCGS is going to take a hit and it'll be a big one.
What really amazes me is that they took this long to do this. It has always been known that copper will tone in the holder. The only thing that has kept it going this long has been all the plastic buyers.
It wasn't so long ago that NGC changed their policy of never guaranteeing copper color precisely because they were losing a lot of copper business to PCGS. Care to bet how long it takes them to change back now that PCGS no longer offers a guarantee ?
As for CAC - I have no idea what they will do. Can't even begin to imagine.
Its interesting to note that 3 of their 12 biggest mistakes involved copper turning in the holder. That's 25%. That's a lot. If they can eliminate 25% of their guarantee cost in a single swoop, that seems like a big deal.
Of course, its also pretty stupid on their part, but hey, NGC is better anyways, right?
I think PCGS make the right move. Of course, the copper I collect doesn't come in red unless you have half a million or so to purchase the few left that do, so no worries here.
there is no spoon
Last quarter PCGS revenues were $9.3M. Assuming 2009 payouts against the guarantee were evenly spread, this means approximately $125k was paid out in that quarter. That's a bit more than 1% of revenues. Given CLCT gross margins for that quarter were 60%, that means around 2% of gross profits go toward the payout last year for all coins. Presumably copper coins was some fraction of this, so the real impact of this decision is something less.
Originally Posted by physics-fan3.14
Less than 1% of revenues, and less than 2% of profits is not a big deal, IMO, but clearly PCGS disagrees -- and its collectors of RD and RB copper who are paying the price....Mike
p.s. Source: http://www.coinlink.com/News/press-r...umes-dividend/
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