Third Party Grading
From Wikipedia, the free encyclopedia
Third Party Grading is a term used to refer to coin grading, authentication, and encsapsulation companies. Often abbreviated TPG, these companies will, for a fee, "slab" a coin. Some companies offer a guarantee covering the grade or authenticity of the coin.
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[edit] History
Third Party Grading was pioneered by ANACS, which was founded by the American Numismatic Association in 1972. The board of governers realized the need to have a guarantee of authenticity, and so offered the first authentication service. At that time, the coins were not graded, only confirmed as genuine. Encapsulation had not yet come about, either, and so the coins were returned with a photo certificate.
In 1986 Professional Coin Grading Service (PCGS) opened, pioneering encapsulation with a plastic slab now known as the Old Green Holder, or rattler, because of its color and the way coins would sometimes rattle inside. PCGS was followed by Numismatic Guaranty Corporation (NGC) in 1987, and today these three companies form the Big Three, or Top Three of TPGs. A couple of other companies, such as SEGS and ICG, are regarded as second tier companies. There are dozens of other companies known as Third World Graders, which often do not offer a guarantee and are often regarded as being substandard in either grading practices or authentication.
[edit] Process
At each of the Top Three companies, a similar process is used. When coins are received, they are reviewed independently by several (usually about 3) graders. The coin is then assigned a final grade by a finalizer, based upon the recommendation of the graders. It is then slabbed. Depending on the company, various descriptors may be added, such as Full Bell Lines (FBL) or Proof-like (PL). Also depending on the company or the service requested, an attribution by die variety may be performed.
[edit] Impact
The TPG system has revolutionized the coin collecting hobby. Collectors can now have confidence that a coin is genuine, attributed correctly, and graded correctly. This is especially important when a vertain variety or the next higher grade is worth considerably more money. Critics (and proponents, sometimes) caution that the TPGs are fallible and make mistakes. While this is true, and not to be ignored, TPGs have introduced stability into the market and given confidence to less educated buyers and sellers. This added confidence has been a boon to the market, and over 13 million coins have been graded by PCGS alone.
Today, there are coin grading services in Canada and Great Britain, also. TPGs have also spread to other hobbies, such as stamps, sports cards, and comics.
