Browsing through the December 24th issue of Coin Wold we came upon an interesting and unannounced auction notice. On January 16th the PCI Coin Grading Service is to be auctioned off.

The auction will be conducted by Gravitt Auctions and includes:”…all assets of PCI, Inc., tangible and intangible, are to be sold to the highest bidder at “Absolute Public Auction”, all for one bid!!! including: Name, Registered Service Mark, Web Site, Toll Free Number, Safes and Office Equipment,Customer List, Approximately 13,000 - 14,000 Names”

PCI, Inc, began in 1989 as a service primarily for collectors. In the beginning the company was called Photo Certification Institute, hence the acronym PCI. At the time the company would encapsulate coins in a holder along with a photo of that coin. As time went on, the photos were dropped.

PCI has gone through several transitions. From the original founder Louis Revels, to a change in ownership, the passing of Brian Beardsley, JT Stantons’ arrival to oversee all operations and then his departure on September 29th of this year.

Efforts were made to rejuvenate the companies reputation as a third tier grading service with attempts to move toward a more consistant and market acceptable grading standard however the market never truly accepted the PCI graded coins and almost all were heavily discounted in the marketplace.

One venue that saw a large number of PCI graded coins was on eBay. Unfortuantely many sellers would list a PCI graded MS-65 coin and then use the PCGS retail price guide as valuation in the listing. Of course the two had no relation to one another, but it provided a questionable selling approach to sell PCI graded coins to unsuspecting buyers who thought they were getting a great “bargain” when in fact many were getting buried in coins they would have a hard time reselling in the future.

As a result of this and other abuses taking place, eBay started a New policy whereby only PCGS, NGC, ANACS and IGC would be considered as “Certified Coins”, and all other coins, including PCI would now be considered to be uncertified.

It has been rumored that with this change in eBay’s listing policy, submissions to PCI plummeted and upwards to 90% of its revenue stream was lost. The change in policy by eBay may very well have been the “death nail” for PCI.

Whatever the true cause, PCI’s liquidation does not bode well for the other “Third Tier” grading services. At last count there were no less than 56 different grading services, 43 of whom maintain web sites.

Over this past year, there has been much discussion and at times arguments as to the current grading standards being employed by the major grading services PCGS and NGC, along with concern over “gradflation” and its effects on the marketplace. Companies such as CAC (Collectors Acceptance Corporation) have been born as a result, with supporters and detractors each staking positions on the future and effects of Third Party Grading in the current marketplace.

Clearly there have been some problems and missteps made, and unquestionably the grading standards have loosened over the past ten years.

However, the health of the hobby in general will depend in no short measure on the major grading services coming to terms with gradflation and setting standards and policies to protect both their integrity, and the confidence that has been placed with them by most collectors and investors.

Perhaps the demise of PCI will be a good thing, and in combination with ebay’s new listing policy and the emergence of CAC into the marketplace, we as a collecting community will reap the unexpected benefits of greater accountability and consumer protection as the coin collecting marketplace continues to expand. One can only hope.