By Bill Waring [a hobbyist from Milwaukee]

For those who thought they had seen everything with coin grading, we now have fourth-party graders! Before we had grading companies it was pretty simple. It took two parties for coins to change hands – the buyer and seller plus a price list based on the state of preservation of the coin. Human nature typically had the seller lean on the better state of preservation of the coin (higher value) while the buyer often would estimate a lower grade (less cost).

The coin industry promoted the idea of an independent appraisal of coin (third-party grading) because it would simplify coin transactions and even promote sight-unseen trading of coins. It’s been over 20 years since companies started for a fee to evaluate a coin and assign a grade. The earliest was a non-profit service by the American Numismatic Association that would return the coin in a simple flip with a card with photograph of the two sides of the coin and a grade assigned to each side of the coin. The back of the card had a long disclaimer stating coin grading is subjective and there is no guarantee that the grade assigns a value. The reality was that a coin grade become a starting point to determine the value of the coin when a price listing was used.

In the 1980s this first ANA grading service was quickly followed by for-profit companies that would seal the coin in a plastic holder, or slab, and give on overall grade to the coin. We now have numerous grading companies all using plastic sealed holders. Some of these companies are considered to be reliable while others border on fraudulent with over grading of coins and unwillingness to state what standards they use to grade their coins. In fact, anyone can purchase their own plastic holders and put a name and grade on them. Even among the companies that by consensus are considered reliable, there are coins that seem to be either a little over graded or under graded.

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