PCGS Copper Coin Grade Guarantee

I am spinning off Charmy's Santa Clara thread because of something she mentioned that I am really confused on.

Does anyone have first hand experience with PCGS grade guarantee and how it pertains to copper coins that have turned from RD to RB in the holder at the MS67/66 level?

Here is the background info

the only reference I could QUICKLY http://www.pcgs.com/guarantee.html find related to copper color is:

So if they will no longer guarantee the color, then how can they say that the coin is therefore a lower grade and not honor their grade guarantee? I smell a rat.

Furthermore, how are they supposed to know when a coin was sold? what does the sell date of a coin have to do with anything anyhow. Shouldn't it be the encapsulation date which only they have access to?


Oh I noticed a little part of

Is that the lowest published price? Dealers wholesale? or even a lower number than that?

 

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Try this thread - http://www.cointalk.com/t81760/

 

To answer your questions, and from what I understand...

I suspect PCGS would downgrade the coin and pay the owner the difference (provided he were entitled to it).

The date of sale is necessary to protect the rights of owners of older PCGS coins, for which the guarantee is still in effect. Said a bit differently, it limits PCGS liability without pulling the rug out for collectors of PCGS coins in older holders.

Compensation/valuation is done on a case by case basis by Mr. Hall. They generally use wholesale pricing (think greysheet ask) in calculating compensation. From what I hear, they are generally very fair. [I will be finding out first hand in the near future, stay tuned. ]

 

My impression has always been that it doesn't apply to copper coins. I'm pretty sure I read it expressly stated that way. I'll go find a link.

http://www.pcgs.com/guarantee.html

As to the question of date of sale/grading, the date of sale would matter since most guarantee wasn't offered to the new owner, only the original owner. As such, any sale after that date would be considered as a contract being established between the company and the new owner of the coin.

If the new owner doesn't have a receipt indicating a specific date PRIOR to the stated date, the legal pretense would be that the most current contract would apply.

 

Thanks for the link rlm. I think I have read that before. Although, it didn't really answer my questions.

NorthKorea, It is a written exclusion that they won't guarantee colors which are designated by lettering. The letter designation has nothing to do with the numerical grade. If it does, then it is not published and that frankly is dirty pool.


Okay. Here is my read. (BTW an attorney would have a field day with the way that guarantee is written)

I submit a PCGS 67RD under the guarantee premise of:

because I believe:

because there too many hits for it to be a 67RD. So,

...my regrade guarantee submission ends up being a 66 - Then they will have to pay the difference between 67RD and 66RD because:

In other words, The new color designation the coin received has been excluded from the guarantee, therefore, there is only the numerical grade difference left.

As long as it is not written that RB copper coinage will no longer will receive a 67RB. They chose to grade at 66.... in lieu of 67RB (because of some unwritten policy) They have to honor the lower grade difference of 67 less 66RD because color is no longer guaranteed, but the grade (numeric) is.

I don't see how they have a leg to stand on.

Tell me where I am wrong. Because it sure seems like they have all the impetus in the world to grade the coin 67RB and pay no compensation.

 

I think in most scenarios they have the legs and the submitter does not. Just the way it is.

In your scenario, you are submitting it as overgraded, so they would make you an offer for the coin outright or the downgrade and offer the difference.

I think the scenario you wrote isn't what has been baffling you but I may not have read it right. Isnt your concern more over a coin sent in not because of overgrading, but color that is not warranted. I.E. you have a 67RD you think is really a 67RB and whether there is a way they would change it to 67RB?

 

No, you read it right. although a clarification (default value) should have been established. I joined PCGS just one year ago. Established a registry set ~ 6 months ago. I have been in constant almost regular contact with PCGS for a variety of reasons....

My purchases are all after January 2010.

I understood the color guarantee early on, thanks again to illini420 who explained it last fall. I asked him what would likely happen if I cracked a 67RD and allowed it to tone slightly and resubmit to get a 67RB


I guess this is a hypothetical question more or less, of what would happen if a copper coin was submitted under the grade guarantee and PCGS THEN (by their own choice) determined that the 67RD copper submitted no longer met the RED designation..... and since apparently they don't grade RB at 67..... what will actually happen as a result of the grade guarantee?

I just don't see how they can arbitrarily say that no RB coin will be graded 67.

Todd, what you said makes sense.

I could be the guinea pig on this, however I see nothing good coming from the exercise, only more malcontent and disdain toward how business is conducted in this hobby. Too expensive to confirm what I think I already know. They will tell me the 67RD is worth 7 and the 66 is worth 5 and give a 66RB in return.

And just to be a smart donkey, this is why I giggle and roll my eyes when I see posts about ethics tossed around forums. That whole grade guarantee has so much wiggle room - so open for interpretation. Was it written that way on purpose? I guess par for the course, ....again.

Question? do they wear masks in the grading room? We know they don't use gloves. I can picture a chatty bunch talking over the coins and flipping them to see who is buying lunch. Maybe they caused the spots, cause someone has allergies and while they didn't sneeze on the coin, they sneezed in the same room!

 

As a caveat: This thread is taking me the same direction with head shaking disbelief over the categories of lack of laser identification/grading - gas chromatography - everyday hi res imaging standards (no offense Todd) and now.... this


You can get two panes of glass sealed with inert argon gas for $25. why they don't at least offer sealed oxygenless cases as a service is baffling. Sure there might not be enough demand. Still.. Wouldn't that add alot more value to a copper coin when selling it? No demand I guess.

 

I have some comments for your first post but will respond to this one first as it is easier.

No offense to you on this one.....you are not the average person in your demands. To clarify, do most collectors care about an inert sealed slab? No. Take it a step further, if it costs more to have done will dealers pay for it? Only if the market paid for it in the end which is unlikely because demand would be low. Would a dealer want to wait longer on submissions for this? Once again likely not. You answered your own questions, very little demand. I wont say no demand, just not nearly enough.

One other thought, when there is mention of inert gases needed to house a coin it should make it apparent why the color guarantee went away. Just not stable enough for Joe average collector. I have seen several full red IHC and Lincoln sets in OGH, all still RD, but these were stored and cared for. My guess is not all copper is treated as nicely and some coins lose the color not on purpose but through bad storage.

 

I have one personal experience that may shed some insight to the "guarantee" Last summer I took some copper and silver coins in PCGS slabs to the ANA Summer Session when enrolled in one of the grading classes. They were all coins with questionable grades or descriptions. One was a medium priced '19-S Lincoln graded 64R. In short it was UGLY and no way RED. I had owned it for several years and it had turned color. At the ANA I showed it to a long standing PCGS grader. He told me to send it in for a regrade which I did. I was called several weeks later and told that it was now 63RB. They quoted me a settlement price and I took the cash. That settlement happened to be $6 more than I paid so no harm no foul.

 

I posted my response to your question in Charmy's show report thread, because I didn't realize you started a whole new thread about it....

PCGS MS67RB Lincoln Wheat Cents are almost always stunning! To date, PCGS has certified only 62 wheat cents at the MS67RB grade!!! That is only 62 coins out of nearly 200,000 wheat cents certified by PCGS to date! The rarity of an MS67RB wheat cent is further highlighted in that more than half of them are from two dates; the 1939-S (pop 11 in MS67RB) and the 1941-D (pop 24 in MS67RB).​

While they are very hesitant to issue the MS67RB grade, it is still used by PCGS. Just in the past few years, the total pop of MS67RB wheat cents at PCGS has more than doubled (pop 29 as of 3/2007; up to 61 as of 10/2010; and now up to pop 62 today). All three 1909 VDB cents in PCGS MS67RB have been certified within the past two years. There's a good thread over on the CU forum which discusses the MS67RB grade in connection with wheat cents and has lots of pics too:​

http://forums.collectors.com/message...hreadid=572404​

I would bet almost anything that a 67RD or 67RB would never downgrade to an MS67BN if it turned in the PCGS holder... to date PCGS has NEVER graded a Lincoln wheat cent with a grade of MS67BN. After 25+ years in business, it is unlikely that will change.​

I believe what Lance says is correct. Most likely a 67RD which turns in the holder will not only lose the color designation, but would also be downgraded to a 66 or even 65. When looking at lots of Lincoln Cents, the surface quality of many MS65RB coins equals that of MS66RD examples. Similarly, MS66RB coins have the surfaces and luster of MS67RD examples. It is clear that original red color does bump up the grade of Lincoln wheat cents at PCGS... surely it should bump down the numerical grades if that color turns over time.​

In looking at lots and lots of wheat cents (though I wouldn't hold myself out to be an expert), it seems that when you put the color of the coin aside, an MS68RD coin is roughly equal to an MS67RB and roughly equal to an MS66BN. That is, when looking just at the strike and surface details/lack of hits an MS68RD coin is equal to an MS67RB and they're both equal to an MS66BN. Of course, the original RD color bumps the numerical grade. ​

This is demonstrated in the PCGS pop reports. Here's a breakdown of the total wheat cents graded in MS66, MS67 & MS68:​

Brown: 69; 0; 0
Red-Brown: 1094; 62; 0
Red: 101,633; 10,343; 66​

The popluations of MS68RD, MS67RB and MS66BN coins are almost equal to one another. Those coins are clearly the best of the best when it comes to strike and overall details of the coins and clearly represent coins of nearly perfect quality. The only difference between them is the original color which bumps up the numerical grade. ​

The question which hasn't been answered to my knowledge by PCGS is how much of the PCGS grading guarantee remains as it relates to copper coins since PCGS dropped the color guarantee on copper in 2010. Sure, if you bought your copper coins before 2010, the full guarantee still applies to you.​

But, when EyeEatWheaties buys his MS67RD in 2011 and that later turns RB or BN what is the result??? As discussed above, it is most likely that a 67RD wouldn't just get regraded as 67RB... and definitely wouldn't get a 67BN since that grade has never been used by PCGS for a wheat cent. ​

Instead, the coin should probably be regraded between 65BN-66RB. In this case, PCGS surely wouldn't cover the owner for the change of color, but would they still cover the drop in numerical grade under their grading guarantee??? Remember, PCGS just no longer covers the color designation, they still guarantee the grade of the coin. Or, would PCGS loosen their grading standards on high grade RB and BN coins and give the coin (although most likely undeserving) the 67RB or 67BN grade in order to avoid dropping the numerical grading and a payout under the grading guarantee??? ​

Like I said, I don't know of anyone buying RD copper after 2010 and submitting under the grade guarantee... ​

 

Thank you Mike! Well written and well thought out with supporting information/facts. The way posts should be written. To summarize off yours and others posts.

I see 5 scenarios on a copper coin submitted for a downgrade review, that ends up also having a color issue:

The way the grade guarantee is written,

1. if the submitted coin goes from 67 to 66 then they have to address the difference in the numerical grade value within the original color category - (the color suffixes were removed for clarity and because they are moot in that they are no longer warrantied)

2. It goes into a 67RB and no compensation is given since color is no longer warrantied/guaranteed

3. PCGS buys the coin to make it disappear.

4. Coin stays in the holder at customers request or coin still meets grade criteria for the label

5. They make up some new rule about how since copper color is no longer guaranteed, neither is the numerical grade.

Are there any other scenarios?

which is the most likely to happen?

And why, for heavens sake, why do they not honor the published values from their price guide? That in itself, makes we wonder how many know that they come up with arbitrary numbers. Numbers that the average collector can't touch.


Seems to me it would behoove them to give the customer the choice.

 

I have heard and understood that copper will turn in the slab. I know the slabs are not perfectly air-tite - however is there really any reason they aren't ? .. I also understand/believe that the cupric oxidation starts from the last day the planchet was polished and that it is a chain reaction I believe, coins that barely make the red designation, will most certainly be red brown quicker due to oxidized copper continuing to feed on itself. There is also the consideration of microscopic impurities in the copper, incomplete mixing of the alloy, residues from the striking and subsequent handling creating reactions as time goes on.

I wonder what the relative humidity is in the area where they encapsulate/grade?
Is it monitored? Doubt it.
Anywhere on the submission form to check off on Rainy day or sunny day encapsulation?

What is the volume of air with in the slab?
Does the difference of 70 and 90F speed up the reaction between CU and O2
Is outside air of the slab supposed to be a 0 atmospheres?
Does altitude play a factor in oxidation process?
What about sunlight, does that speed up the reaction?
What is the optimum RH for storage?
Why isn't a small amount of desiccant at minimum in the slab?
Why don't graders wear gloves?
Why don't they wear masks?
Why isn't there an acceptable treatment process of the coin prior to encapsulation?

Why don't I know the answers to any of these questions?

 

Did you get the coin back? Was there an option to receive the coin back plus a settlement? I think your situation is different since you owned it prior to 2010