Hi everyone! I recently came across an online numismatic article where, in the comment section, an individual indicated he believed Dealers receive preferential treatment when submitting their possible higher grade (modern) coins to Third Party Grading Services. This commenter also stated there had been a long standing rumor that Dealers receive better grading deals as compared to individual collector submissions to TPGs, specifically with respect to MS70 Silver Eagles. Have any individuals in the blogosphere felt that there has been TPG preferential treatment given to Dealers, as compared to individual submissions, despite the claimed anonymity of those submitting their classic or modern coins to TPGs (especially with respect to possible perfect and ultra rare coins)? Thanks An exact quote, in part, from the commenter of that numismatic article is as follows: "Well it’s true and I can prove it. I have a dealers account but send in small amounts from myself or my customers, I have never EVER had an MS70 for a silver eagle. Yet one the largest dealers in Florida only sells MS70 Silver eagles, I dropped into there store and asked if I could buy some graded silver eagles, they showed them to me, I asked if they had any cheaper such a MS69, they told, me “All our coins are MS70, we have them graded straight out of the US mint tubes 100’s at a time. So I left, I sent a whole tube in and they all come back MS69, it was a sealed tube, I have sent others in as well, I have even gone through them trying to get the absolute best, yet none of mine have ever made MS70. How strange yet this BIG dealer only gets MS70’s back. I was still not convinced, so I purchased one on eBay from his dealer, an MS70. I very carefully cut it out, Nothing was touched, I was even using gloves, I sent it off, And yes you are right it came back MS69. This is without a doubt proof that BIG dealers get better grades, I console myself knowing this for a fact."
It's true that the graders have no knowledge of the identity of the submitters, but when they see all the teardrops on the submission form, it is easy enough to check the DNA to identify the submitter. Chris
The big dealers don't get better grades. The REALLY big dealers buy numerous monster boxes (500 coins each) of ASEs from the mint and have them shipped directly to the TPGs as bulk submissions. With bulk submissions those dealers can specify a minimum grade (say 69), meaning that only those coins meeting or exceeding that specification (69 or 70) will be slabbed and labeled. any coins grading at 68 or less will be returned to the submitter to be later sold as loose bullion coins. PS. Sure, the guy you quoted is a dealer, but is probably doing it out of a store front in a strip mall on the outskirts of town, and not doing it at the level of an APMEX or a Provident.
The large number of submissions, under the same anonymous identification number, might be the give away that grader dealing with Dealer? Hunter
The person doing the grading never sees the ID number. They get a coin in a tray with a label showing only a bar code. Coins are matched to an invoice later in the process. So, no, the grader has no clue as to the identity of the owner/submitter of the coin they are grading. The process for NGC is here: http://www.ngccoin.com/coin-grading/grading-process/
Have you ever given thought to the possibility that "one of the largest dealers in Florida" might specify MS70 as a minimum grade because they don't want to mess with the 69's? Chris
Thanks for the great info on bulk submissions and the ability of Dealers to request a minimum grade. I did not know about that option. By chance do you know what the general cut off is on bulk submissions to TPGs, assuming an individual submitter could even make the attempt. Hunter
At NGC, a bulk submission is considered to be 100 coins of the same type. You also must be an Elite Member of NGC at a cost of $299.00 per year. http://www.ngccoin.com/news/viewarticle.aspx?IDArticle=3196
I have heard occasionally from coin collectors that there is a distrust toward TPGs and their grading standards. They are not a government agency, but rather a private business. At the end of the day, without an independent body overseeing or evaluating their grading standards, they potentially could be a law unto themselves. Since I am not a big time dealer I do not do bulk submissions. Also, another commenter to that article, I had mentioned, felt the smaller private coin dealer raised a great question.
Thanks for the great info. Your response diminishes some of my concerns, picked up from other collectors, that TPGs give preferential treatment to Dealers.
This "theory" has been an ongoing question for as long as TPG's have been in business. Most of the time it is raised by people who don't know too much about the grading process. If you don't trust them, you do have the option to grade them for yourself, but when it comes time to sell, which coins do you think will garner the higher prices - your raw coins or the slabbed coins? Chris
A little research is worth much more than believing a story from some guy who heard it from a friend who heard it from his wife's fourth cousin, who heard it from his neighbor, who heard it from his brother in law, who heard it from Kevin Bacon.
Really like those big brother security cameras hanging from the ceiling! Do you know if graders, at times, could receive large lots of the same type coin for grading in a large bin or tray. It would seem if Dealers are submitting hundreds of these same type coins for grading, the TPGs would just assign the same anonymous barcode to the same lot, rather than break them up into individual coins with separate bar codes. The task at hand would, otherwise, seem very daunting.
I agree with you; however, by asking these types of questions, collectors who are not always experts in the many fields of numismatics (especially grading), can have their concerns addressed and feel better about their submissions being fairly graded by TPGs. Hunter
And that is why we are all on this coin blog -- to resolve or verify rumors and get as accurate answers as we can from specialists in their respective numismatic fields . . . and one of my subquestions, above, has still not been fully answered that would pretty much resolve all my doubts about this issue. Hunter
We don't play on a level playing field......neither here, nor in life. Best chance is getting lucky sometimes........
A true case of the misinformed informing the misinformed. And "For the Record", anybody that "blindly" submits a roll of Silver Eagles, deserves exactly what they get. Dealers do in fact "prescreen" their submissions and some dealers are pretty darned good at it. Personally, I have received MS/PR70 from some of my "collector" submissions.