The ABCs of Coin Grading
I have learned that many dealers like to sell uncirculated coins by the roll. What would be the point of buying a whole roll if you just want one coin for your collection? It would be less expensive to keep looking for the single object of your search: the one uncirculated coin, right?
Here’s what some treasure hunting collectors do: buy uncirculated rolls, and “cherrypick” the rolls in search of extra-nice coins to send to a third-party company (PCGS, NGC, CAC) for grading. It takes a lot of practice, often with a good magnifying glass or microscope to assess the finer points of a coin.
Because it takes the uncertainty out of the value equation, a graded coin is usually worth more than an ungraded one. It has been put into a protective case, assigned a serial number, and given a grade. A verifier checks the grade. If there is disagreement, it is tagged and rechecked by other graders. Although the grades can be subjective in some cases, the grade adds credibility to the condition of the coin, and therefore to the value.
So cough it up. What is the grading scale? I made liberal use of an excellent PCGS book, The Official Guide to Coin Grading and Counterfeit Detection, text written by John Dannreuther.
Coins are graded on a 1-70 scale (worst to best), with 1-58 referring to circulated coins, and 60-70 to uncirculated coins. According to PCGS’s Guide, graders first examine a coin for wear on the raised part of a coin, which determines if it will be graded Uncirculated or Circulated. From there, examination is made for :
Marks, or defects, such as gouges, hairlines, or scratches
Strike, the strength of the die stamp made by the Mint
Luster, reflectivity (how mirror-like the coin is)
Added designations, color and toning
Eye Appeal, from spectacular to none (or ugly).
The grading companies have also instituted a + designation for uncirculated coins, indicating that the coin almost makes, but not quite, a higher grade. One number or + can make a difference of thousands of dollars! NGC, another grading company will add a * star if the coin is a very nice coin for its assigned grade. And finally, collectors might send their very special coin to the Certified Acceptance Corporation (CAC) after it’s been graded by PCGS or NGC for examination. CAC will only put its green sticker on a coin if it’s an absolutely premium coin for its grade. CAC stickers are becoming increasingly desirable for the higher grade coins.
To practice grading, I lined up a bunch of Indian pennies, and examined them one by one. What the heck! They looked almost the same. Not so, according to Pat and PCGS’s Guide. I looked with a 5x magnifier, and discovered it’s easier to begin at the TOP of the grading criteria—what detailing can I actually see vs. where are the flaws? If the only visible thing is the date and shape of the face, it’s Poor.
Then I looked for detailing in the headdress feathers. The level of detail is a big divider in grading. And on and on.
With Uncirculated coins, the search reverses. There should be no wear, otherwise your coin is Circulated, not Uncirculated. It’s easier to look for reasons to downgrade the coin—how many flaws, how reflective (the luster). The upshot is that this whole business of coin grading takes a lot of practice, with a lot of coins!