Gradeflation gets a lot of verbiage on the forum. For newbies, gradeflation refers to a loosening of grading standards by grading companies over a period of years. For example, a coin that graded MS63 25 years ago might grade MS63+ or even MS64 today. The purpose of this post is not to argue whether gradeflation is real. I suspect it is to a limited extent over decades. I’ve had better results with coins graded long ago (compared to recently graded coins) when submitting for a regrade. However, I think gradeflation is less a problem for more expensive coins than cheaper coins. And I don’t mean expensive coins are less susceptible to it than cheaper coins. It has to do with relative costs of regrading for expensive versus cheaper coins. Ultimately, grading is ranking a coin among its peers of the same nationality, denomination, mint, design and variety. This doesn’t change with gradeflation. But with gradeflation and over time, for a coin’s assigned grade to reflect its rank, it’s gotta be submitted for regrading. This is irritating and keeps money flowing from collectors and dealers to TPGs. And this process is relatively more costly for less valuable coins than expensive coins. A look at the pricing of TPGs tells that tale. I’ll use PCGS as an example and compare a pre-1965 US coin worth $500 based on current grade with a pre-1965 US coin worth $10,000 based on current grade. I’ll assume the coins will be shipped from the middle of the 48 states … Manhattan, KS, and shipping will be via the cheapest, insured way. For the $500 coin, that’s parcel post with USPS insurance which amounts to $16.40. For the $10,000 coin, that’s registered mail with private insurance which amounts to $34.75. Now for PCGS charges. For both coins, there will a $10 handling fee. The $500 coin will require Regular service level, which is $38. The $10,000 coin will require Express service level, which is $65. Both these levels include Gold Shield, which provides pics among other things. Finally, return shipping will be $22 for the $500 coin and $36 for the $10,000 coin. PCGS totals: $70 for the $500 coin and $111 for the $10,000 coin. Grand totals (shipping to PCGS plus PCGS charges): $86.40 (17.3% of value) for the $500 coin; $145.75 (1.5% of value) for the $10,000 coin. In terms of percent of value, regrading the $10,000 coin is a much better deal than for the $500 coin. So, to correct for any gradeflation after holding a coin for a couple of decades, the owners of more expensive coins will pay a lot less (relatively) to have their coins’ labels brought to the current standard. Cal
Your math and assumptions and the cost basis vs. return, appear to be predicated on the TPG grading the piece at a higher grade. That is a hidden loss, these days. Better to send the existing piece in for a CAC evaluation....$16?-$35? Zero if no green or gold? Of course, I am also making an assumption...that the original graded piece is PCGS or NGC. Using your example, if a resubmitted 63 comes back a 63, it is a loss, regardless of a value of $500 or $10,000. A loss is a loss, and using your numbers, it is an $86-$146 loss. If it comes back a 64, the next trip will be to CAC.... DEFINITELY in the case of a $10,000 piece....and, the added cost is either $16, or $35, or 0 (if no bean), because it is doubtful it would bring 64 money without a CAC bean. The point: the piece does not have to be resubmitted, with all the costs that are required to do so, when a CAC trip is cheapo cheapo cheapo. The other point: what if the original piece is returned at the same (or horrors) a lower grade? Sometimes, leaving something alone is better. Gradeflation works both ways, up or down. Thus the value of CAC.
I made no assumption about how the regrade would turnout. It's simply something someone might do after a couple of decades or more if they think there has been gradeflation. Regardless of how it turns out, it will have been a relatively more expensive trip for the cheaper coin. Other than the cost of the service and shipping, regrading at PCGS is a no loss situation. If the coin grades lower, they pay you the difference in value. Sure CAC is cheaper. But if you look at the value of almost any coin that is MS63 with a green bean, a coin of same type graded MS64 will be more valuable. Going up a grade pays better than getting a green bean at the same grade. Cal
