Net Grading (Love It or Hate It)

I would like to find out what everyone thinks about the practice of NET grading by TPG's. With PCGS venturing into the practice of slabbing problem coins, I think this is a good time to discuss this topic.

PCGS has stated that they will only attribute the coin as Genuine and will place a disclaimer on the label stating that the coin is not gradable. Other TPG's use a system whereby the indicate the level of detail on the coin and then provide a net grade that reduces the grade due to it being a problem coin. The auction listing below from Heritage shows a harshly cleaned bust quarter that was graded a while ago by ANACS. The coin is AU in detail but has been net graded to XF40 due to the cleaning.

http://coins.ha.com/common/view_item.php?Sale_No=1118&Lot_No=7647

My problem with this is two fold. First, the coin is not an XF coin. It is an AU coin with a problem. Secondly, why does the TPG get to make an arbitrary assignment for the penalty. By assigning a net grade, they are telling the collector that this coin should trade at XF40 money. I don't think that it is right for the TPG to decide the market price of a coin. They should just call it AU Details--Cleaned and call it a day. Let the potential buyers decide the value of the coin. Furthermore, does a coin with light but noticeable cleaning get the same deduction grade wise as a coin that has been very harshly cleaned.

What do you guys think. I have attached a poll to this thread. Is NET GRADING good for Coin Collecting?

 

Log in or Sign up to hide this ad.

I don't like it. The reason is that I feel that damage to a coin is somewhat undefinable in the impact it actually has on the coin. We can all look at a coin and say it grades "X"...but how many points are deducted for a harsh cleaning, 10, 15? Grading is subjective to begin with...now were adding a subjective deduction to an already subjective grading standard. So, I think it's hard to really put a grade value on the damage.

What I prefer is to give the coin a details grade and state it is damaged in some way. That way all coins are graded the same and problem coins are noted for that. Then, the extent the damage hurts the grade is solely up to the owner/purchaser.

edit: I must admit that I made my post before I read Lehigh's...so I'm sorry for basically repeating what he said. lol

 

I say no. Unless it helps me sell for more. Then I pick No. Collecting is about money, but it's not.

 

I don't have a problem with Net Grading when a net grade is given for a coin with an obverse and reverse that grade differently.

 

Do you have a visual example of that? I have never seen that on a slab before. I know that the old ANACS system was to provide a 64/65 type grade, but have never seen it on a slab.

 

No. And I doubt you wil find one. The TPGs net grade coins every day and the grade they put on the slab is the net grade. They don't show how they arrived at the net grade (unlike the example I noted where a math teacher took off points if you did not show your work).

 

I agree with Lehigh's statement. The TPG version of net grading is essentially market grading. They're trying to quantify how bad the defect is. Taking it to the extreme, if an MS-65 coin was net graded down to G-4, you wouldn't get much money for it.

If you have two coins that garner the exact same technical grade, say, AU-50, but one is lightly cleaned and gets net-graded EF and one is harshly cleaned and gets net-graded VF, the seller will get less money for the more harshly-cleaned coin.

The issue at hand, though, is whether the TPG ought to be making the decision of how much to downgrade a coin.

I say AU-50, cleaned, is the proper description. Let the buyer and seller of the coin decide with their own dollars how bad the cleaning is.

 

The original grade assigned by TPG's (NGC & PCGS) is not arbitrary. They assign the grade based upon their evaluation of the coin that is consistent with their grading standards and past practices. The assigned grade is an opinion that allows the coin to be traded freely in the market place without bias because the TPG is not profiting from the grade.

By net grading coins, the TPG is telling the collector that the problem is worth this many $'s simply so people will send them all of their problem coins for encapsulation. I personally have no interest in buying a cleaned coin, and don't think one drop in grade is a sufficient adjustment to the price. My guess is that each informed collector has their own opinion about what a problem coin is worth. However, new collectors will see the net grade and accept that as the market grade for the coin, because that it what is supposed to happen with the original market grade. My point is that they are crossing a line that hurts numismatics by simply deducting a grade from the coin and slapping the number on the slab.

 

Everyone here is using "cleaned" as an example.
What about a corroded cent? Does that deserve a net grade?

 

I don't like net grading. It double-counts the problem. I would rather have the coin slabbed with a statement of the problem and what it would have graded for without the problem. I would rather see "AU-cleaned" than "net grade XF" because a buyer will start with the XF and work down from there because it is cleaned. A simple statement of fact is superior to a value judgement. I want the TPG to tell me "this is a cleaned coin that would be AU by our standards" and not "this coin is worth XF money because it is cleaned."

 

Well said.

 

FWIW, in the sports card field, there are "qualifiers" just like cleaned, etc. However, the grade is what it would be without the "problem". The unwritten rule is that you knock it down two grades if doing a quick "what's it worth" check.

I agree that the grade should be what it would be without the problem. Let me decide how bad the damage is....

 

That's right.

They shouldn't.

Agreed... but here, we're close to getting back into the "technical vs. market grading" discussion.

Along those lines... should the TPG decide how many levels a coin should drop with a given amount of problems ? I say no. That is in the eyes of the buyer. Of course, everything is in the eyes of the buyer - TPG or no.

The impact of problems is difficult to standardize - much more difficult than wear. "Good honest wear" is predictable, and tends to have a consistent pattern - problems do not.

That's exactly right. That's what NCS does. They evaluate "details", list the problem(s), and stress (on the slab) "details grade does not determine value".

 

Agreed.

One of the reasons is this... for any given problem, some people react more negatively than others. When it comes to problems, everyone has personal pet peeves.

For instance, let's look at early date Large Cents. The vast majority have one problem or another.

It's easy enough to agree on details / sharpness. But how much impact should a rim bump have ?

For some people, a rim bump just drives 'em crazy. It destroys the symmetry of the coin. But personally, rim bumps don't bother me as much as some folks.

I can't stand any sort of scratch that's in the focal area, particularly the face or throat. It just looks violent. Other folks don't care as much.

For that reason, it will never be possible for any third party to tell you what the impact of a given problem is. The impact is unique to you.

 

So many people allow TPGs to set the value of a coin anyway...why not allow them to set the value of cleaned and problem coins. The whole hysteria these days about cleaning is, in and of itself, an arbitrary standard. Unless its been scrubbed with a brillo pad or is ugly, I dont care if a coin from the 1600's or wheneever, is cleaned...thus I already disagree with the arbitrary standards set...thus what they do further is just them setting new arbitrary standards and practices.

 

I agree that the grade should be what it would be without the problem. Let me decide how bad the damage is....[/quote]

I want the TPG to confirm the coin is genuine & then inform what the grade would be per their grading standards. I prefer that they clearly state the problem but not net grade the coin (i.e. GENUINE AU DETAILS BENT).

Very best regards,
collect89

 

yes, it establishes a fair market value for the piece.

 

Regardless of if we collectors realize it, the TPGs net grade coins today -- PCGS and NGC (and others) do it silently, others are more up-front (ANACS).

Personally, I have no problem whatsoever with net grading. It works very well with the EAC community.

 

Tpgs should just grade the coin and note the problem . Let us decide the cost .
rzage