The world of collecting is wide and multifaceted: the price of two similar items made at the same time can vary hundreds, even thousands of times. So how are collectibles actually graded, how do you find a potentially profitable auction lot, and how can you increase the value of your collectible?
We sat down to find this out from an acclaimed expert, Stanislav Katz. He is a co-founder of the international auction house KATZ Auction, who has been the official dealer of the grading companies PCGS and NGC for nearly 10 years.
Collectors don’t just seek to add items to their collections. They want their collectibles to be of the top-notch quality.
Grading is the process of determining the condition of coins and their certification by independent expert companies operating the modern numismatic market. Appraisal companies do not sell, buy, or price coins: they only grade their condition. You can find out how much a coin of a certain grade costs on average on the grading company’s website or find out on your own from information services tracking coins across auctions (for example, acsearch.info or coinarchives.com).
History of grading
Valuations of coin condition date back to the middle of the 19th century when the first numismatic catalogs emerged and such a concept as “grading” started circulating in collectors’ circles. In the 1860s and 1870s, there were no more than two or three coin grades. In the first half of the 20th century, thanks to the American Numismatic Association (ANA), the number of grades increased to six (Good, Very Good, Fine, Very Fine, Extremely Fine, Uncirculated).
Today, grading is done by independent expert companies – PCGS and NGC. Both use the Sheldon Scale: 7 main grades of coin condition and several auxiliary ones.
It goes like this:
- Uncirculated (Excellent condition). Designations MS 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70
- About Uncirculated (Almost excellent condition). Designations AU 50, 53, 55, 58
The valuation process
At least three, and sometimes more, experts, work with each coin submitted for valuation. Each appraiser operates independently and is not aware of the opinions of their colleagues. They put the results into a computer system that employs time-tested and rule-based logic to determine and track each coin’s valuation.
Slabbing coins aims to ensure their safety from external influences and protection against counterfeiting. The coin is placed in a transparent capsule, or “slab”. When a coin is slabbed, a special label is also placed in a plastic package, which contains the coin’s name, condition, certificate number, barcode, and a security hologram. For slabbing coins, ultrasonic welding technology is used.