TPG Companies Grading GUARANTIES

I have been researching the TPG companies from a standpoint of who has the BEST grading guarantee NOT the best at actual grading. Here's what I have found...

The best guaranty that I've read so far is from...

NGC

The grading of coins is subjective and solely reflects the opinions of the NGC graders. All coins submitted to NGC shall be examined in accordance with NGC grading procedures. In the event that any owner or subsequent purchaser of an NGC coin believes that a coin has been over-graded by NGC with respect to such procedures, such person may submit the coin to NGC through its "Appearance Review" service for a review of the assigned grade. If the grade determined under such review in NGC's sole opinion is ultimately lower than that originally assigned to the coin, NGC shall, at NGC's option, either exchange the coin in question with an equivalent coin at the earlier higher grade or pay the difference between the current fair market value of the coin at the newly established grade and the current fair market value of the grade originally assigned to such coin. Due to the volatile nature of the coin market and Internet auctions/sales, the selling prices in these auctions/sales do not necessarily represent the current fair market value of any particular coin. NGC will determine the current fair market value of a coin based upon what NGC believes, in its sole opinion, to be reliable current market information. NGC's subjective determination of fair market value shall be binding on all prties. Removal of a coin from its NGC holder, or tampering with the holder, nullifies this Guarantee. If requested, NGC will remedy any clerical error with respect to the description or grade of a coin on its label, free of charge.

ANACS states...

ANACS guarantees the grade and authenticity of the coins it certifies and encapsulates in an ANACS holder. Furthermore, ANACS guarantees that every coin submitted to it shall be certified by ANACS’ grading experts in accordance with the ANACS grading standards, policies and procedures.

In the event the owner of an ANACS-graded coin believes that it has been overgraded under the ANACS standards, policies and procedures, the owner may submit the coin to ANACS for re-examination under a procedure which precludes the graders from being aware of the grade originally assigned.

If the re-examination grade is lower than the grade originally assigned by ANACS, ANACS agrees to either replace the coin at the new and correct grade or to pay to the owner of the coin the difference between the coin’s fair market value at the re-examination grade and the fair market value at the grade originally assigned by ANACS. For example, if the current fair market value of the coin at the original grade is $1,000 and the current fair market value of the coin at the new grade is $900, ANACS will return the newly graded coin, along with a check for $100, to the coin’s owner. For purposes of this Guarantee, the fair market value of a coin will be established by using the most current pricing guide(s) as determined solely by ANACS for the specific issue. ANACS will also refund to the coin’s owner the entire re-examination fee.

This Guarantee applies only to ANACS-graded platinum, gold and silver coins. It does not apply to the following: any coin in a damaged, unsealed or altered ANACS holder; any clerical error as to the description or grade of the coin; and, any “problem coins” that carry a “detail” and/or a “net” grade, as these are guaranteed by ANACS for authenticity only.

ICG states...

8. The grading of coins is an exercise of professional judgment and opinion, which can be subjective and may change from time to time. As a result, ICG shall assume no liability of any kind whatsoever and makes no warranties or representations to Customer for any grade assigned by ICG to any coins.

PCGS states...

The Guarantee of Grade & Authenticity is fundamental to PCGS's conceptof third-party grading. The cash-back policy ensures the accuracy of the grade assigned to any PCGS coin as long as it remains in its tamper-evident holder. If a coin is believed to be improperly graded, and a discrepancy is found when resubmitted through PCGS's Downgrade Resubmission service, the guarantee entitles the coin's owner to options designed for his protection.

SEGS states...

If within six (6) months after SEGS has graded a coin, the owner of such coin believes that the coin has been over graded with respect to such standards and procedures, the owner may submit such coin to SEGS in its original SEGS coin capsule for re-grading (see S-4 Service).

The fee for such re-grading shall be $20, and may be refundable.

Provided that the SEGS coin capsule has not been damaged or tampered with, and provided that there are no typographical errors in the grade and/or other identifying information for the coin on the SEGS label, the original grade shall be masked and a re-grade shall be determined.

If the re-grade is lower than that originally assigned by SEGS,

SEGS shall pay the owner the difference between the fair market value of the coin at the newly established grade and the fair market value of the coin at the original grade. Fair market value shall be determined by SEGS based on recent actual transactions in the market place for coins of that type, variety, error, and/or grade.

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All of the companies except ICG have a grading guaranty . To only those coins that you believe are overgraded by that company and do re-grade as overgraded.

SEGS allows only a six month window and I would be lead to believe that it is only for the original owner that had the item graded.

ANACS guaranty only covers ANACS-graded platinum, gold and silver coins as stated in the fourth paragraph of their guaranty. I am not sure if this even covers coins but rather only bullion? I DON'T KNOW?

PCGS needs to change one word in their in their language... FIND IT? Othewise it seems fine but not as explicit as NTC's guaranty.

Not being a coin collector but still investigating the possibility of doing proofs, I list them here according to my preference of guaranty (regardless of grading abilities) in this order...

1. NGC
2. PCGS
3. SEGS
4. ANACS
5. ICG

As I am looking at doing proof silver and gold bullion, I just might reverse my preference of #3 and #4.

I am still trying to learn of each companies grading ability but that's even tougher. Still got loads of homework to do on grading abilities.

 

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A dealer recommended to me is to send in coins to anacs (cheapest and also will give details) then if coin comes back good with a higher grade consider sending it to pcgs or ngc to have them do a crossover grade. Seems that graded coins from these two companies bring the highest prices to make it worth the extra expense. This practice has worked for me on some CC morgans.

These two companies won't grade coins with details and it is a waste of money just to have them returned without a grade. Even though I think one of them is changing their policies regarding coins with details.

 

There is absolutely no point in sending it to ANACS, ever. They are rapidly moving towards being a Third World holder.

NGC no longer issues bodybags - damaged, cleaned, or otherwise coins are now slabbed in a Details grade holder, with a purple label. Its given a grade, and a description of the problem. The NCS holder is now defunct, and has been replaced by NGCs new slab.

 

The biggest problem, by far, with a grading guarantee, is that no matter how good it might sound, the grading company itself, gets to be the arbiter of whether they over-graded the coin. And how objective can they be, knowing that a down-grade results in money out of their pocket, sometimes a considerable amount?

 

You're missing one key thing about the NGC grade guarantee vs. the PCGS guarantee though. Unless they've changed their policy in the last year or so, NGC only guarantees the color of copper for 10 years, PCGS guarantees it for life.

So, if you paid a huge premium for that RD coin vs. that RB coin and 11 years later your coin turns a little dark in the holder, you better hope that it's in a PCGS slab. While I really don't know how often copper colors change like that, having my high dollar RD copper coins in a PCGS slab gives me some comfort given their guarantee, regardless of whether my fear of them changing to RB or BN coins someday is real or imagined.

That said I give the PCGS guarantee the edge when it comes to copper coins at least.

Of course, the guarantee by any company is really in their own hands as Mark suggests. If the company is cash tight and admitting to a downgrade would cost them big bucks, would they really do so??? Especially a company like PCGS who has to answer to their shareholders?? And even if they acknowledge a coin needs to be downgraded, they will not reimburse you based on their own price guides!!! I would like to think all of the companies would grade the coins honestly, regardless of any financial consequences, but that is probably naive to think that.

 

Let's simplify.

Assuming your talking about modern silver and gold bullion (ASEs, gold $50 buffaloes, etc)...

Forget everybody except NGC and PCGS. Just forget the others even exist.

There is little reason to slab modern bullion. The only reason is the hope of scoring 70s and getting the premium thereof.

And it gets even simpler...

Forget the theories. Forget the guarantees.

It all comes down to one thing - which company is stricter ? And that comes down to one thing - which company hands out a smaller percentage of 70s ?

The answer is easy... just check the census and you'll find a dramatic difference : PCGS is much stricter. They hand out a much smaller proportion of 70s.

The market knows this. Check auction results on e-bay and teletrade. Whose 70s sell for more ? PCGS. By a wide margin.

 

I don't see how which company is stricter has much of anything to do with the quality of their grading guarantees.

And the fact that PCGS examples of a certain type and grade of coin might sell for more, doesn't necessarily mean that they are a better buy. Yes, you might get more for them when you sell them, but just as likely, you have to pay more for them when you buy them. In terms of performance, the cost is just as important as the eventual selling price.

Lastly, if you're talking about which company to submit uncertified coins to, if they are going to grade the same at either NGC or PCGS, it would be better to submit to the latter. But if you believe that PCGS is stricter and will award a lower grade, it might be better to submit to NGC instead.

 

Agreed. There is no correlation.

My understanding of the OP is he is approaching this from a Modern Bullion perspective. Within that narrow context, my choice would have little to do with grading guarantees.

Rather, I would base my choice on factors such as

• % chance of getting a 70 for each TPG
• price of 69s vs 70s for each TPG
• my personal skill in sorting through mountains of bullion and submitting only those I thought would score 70

 

Thanks for the clarification.

 

Agreed.

In the context of modern bullion, perhaps the best strategy is

• sort through a mountain of bullion
• submit only the very best to PCGS (ones you believe will score 70 at PCGS)
• submit the 2nd best to NGC (ones you believe will score 70 at NGC)
• sell the others uncertified since they will likely come back 69 and command no premium - don't waste grading fees

 

I've seen around 60%-70% of the Ultra High Relief $20 coins get a grade of MS70 from PCGS, with nearly every other getting MS69. I don't have access to the NGC population reports, but I would guess that NGC has given at least the same percentage of MS70 grades.

However, your comment appears go beyond just noting that PCGS gives out a high percentage of 70 grades in some series and appears to suggest there are some series that NGC is stricter than PCGS in using the 70 grade. Which series might you be referring to??

 

Fair enough, I just thought you were implying that when you bolded "PCGS is much stricter" when you quoted in your previous post.

While it is true that the high percentages of 70 grades could be interpreted as a relaxing of strictness in the TPG grading standards for that grade, it could also be the case that the U.S. Mint production techniques and quality control has improved with respect to those series with the high percentage of 70 grades.

 

A couple things to notice in those guarantees. NGC and PCGS both talk about fair market value with them being the sole determiners of just what the FMV is. (Which is interesting considering they both publish price guides claiming to tell you what the value of your coins are, but if you take them up on a grading guarantee all of a sudden their own price guide is no where close to FMV and you will be offered significantly less.) ANACS claims its offer is based on an unnamed price guide and it won't cover copper coins. At least SEGS claims it's reimbursement will be based on actual recent transactions.

And if you think the grading guarantees are shaky you should have seen the authenticity guarantees Until a couple years ago there weren't any written guarantees of authenticity. Thanks to the efforts of Majorbigtime and myself PCGS now has a fairly decent one. I haven't looked at NGC's lately to see if they have followed suit.

 

I seem to sense much animosity towards ANACS. I have used them and have looked at their coins in the newer holders and I just don't see why they should be scorned. In fact, if ANACS coins sell for less in the marketplace for a certain grade, then you should be able to make money on arbitrage..... buy ANACS cheaper and cross it to PCGS for more money at the same grade.

 

Certainly a good theory, along with many others. Sometimes, some folks can pull it off. Give it a try.

I will say this... for any scheme like this, you aren't the first to think of it. Many others are trying the same thing.

So it will come down to a game of skill, not chance. The key is to use numismatic skill to evaluate individual ANACS coins and submit those. I betcha the successful candidates are few and far between.

 

I don't detect any animosity at all. If you can take advantage of such arbitrage, great. But it is far easier said than done, as many of the coins wont grade the same at PCGS.

 

I can't vouch for anyone elses gaurantee but I have taken PCGS up on thier gaurantee several times and each time resulted in the coin being removed from the holder and returned to me raw with a check. The amount of the check was usually about what I paid or slightly more but always as Conder mentioned considerably less than the PCGS price guide which is more of a trend than a guide.

I would say that each time the outcome was fair for both sides.

My largest check was for around $1K on a coin that now sits in my Dansco album.

 

Maybe animosity is too strong a word, but ANACS is definitely treated with less respect than PCGS or NGC. I just don't think it's warranted, that's all.

And yes, the arbitrage idea would be difficult to pull off and you'd have to have good grading skills to do it. But that's good to have grading skills.