Does CAC actually guarantee anything?
MKUltra24
Posts: 655 ✭✭✭✭
in Q & A Forum
I’ve never really thought of CAC coins before because I never had one but recently I received an 1889 Morgan Dollar graded PCGS MS64+ CAC green bean and I’m wondering does CAC actually guarantee anything?
Like PCGS & NGC guarantee authenticity and grade which is one of the big things that gives them credibility but does CAC actually guarantee anything with their green & gold beans?
If a PCGS coin is graded and slabbed and later turned out to be counterfeit the owner could receive fair compensation through the PCGS guarantee of authenticity.
But does CAC stand behind anything with their own money like that?
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They guarantee that the opinion they give is theirs. Yes, it doesn’t sound like much, but “The Market” has determined over the years that their opinion has value!
By the way, I hope you’re not disappointed, but that coin you own graded 64+, their sticker means they think it’s solid as a 64, NOT necessarily solid as a 64+! That’s because they ignore any “+” as part of a grade!
Steve
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
Thanks for explaining Steve!
No worries I learned about the CAC not factoring the + when I first shared the coin lol.
But that means unlike PCGS & NGC if CAC makes mistakes they have nothing to lose financially. That just sounds kind of sketchy because they could give the sticker to coins of acquaintances even if the coin isn’t worth the grade and even if someone buys the coin and discovers it’s improperly graded they have no recourse.
At least TPGs have some skin in the game ya know?
Thanks again!
While factually you’re correct, I disagree with your point. They DO have skin in the game - their reputation is on the line, and it’s their reputation that provides the value of their stickers. As such, I’d be shocked if they’d risk their reputation by fooling around. While they make mistakes too (after all, they’re human), their reputation has the value that is has because over time “The Market” has determined that their mistakes are not many.
When PCGS or NGC undergrades a coin, it does NOT cost them financially. Either the owner just sucks it up and keeps the coin, or the current or a future owner can submit it for Reconsideration, Regrade, or crack it out to resubmit. In each of those latter three cases, not only did the TPG not suffer financially for their error as you imply they did suffer for having made that grading error, but they were actually rewarded financially for their error by collecting another grading fee!
In cases where the TPG overgrades a coin, in my opinion the vast majority of the time the TPG’s still don’t suffer financially, as the person who had that raw coin graded is thrilled with that grade, whether they keep it or choose to sell it.
In my opinion, the main way the TPG’s suffer financially when they make an error is if the rare time happens that they certify a counterfeit coin as a real coin, or err in certifying a coin as a rare variety when it is not that variety. But the quality of their expertise makes those errors few and far between.
Steve
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
No that’s not true about PCGS & NGC not having money in the game.
If they overgrade a coin and it doesn’t meet the grade they are responsible for either paying the owner the fair market value of the difference between the original grade given and the actual grade or to replace the coin with a legit coin equal to the original grade given.
So if PCGS grades a coin MS65 and it turns out to be 64 at best then the PCGS guarantee would kick in and PCGS would have to either pay the difference between the value of 65 and 64 while letting the owner keep the coin OR taking the formerly 65 but actually 64 coin from the owner and replacing it with a legit 65 example of the same coin and type.
PCGS & NGC both have disclaimers that they may choose which option is taken.
But they do have skin in the game financially. If they start over grading coins eventually expert dealers & collectors will see these overgraded coins and send them in for resubmission knowing they don’t deserve the grade and PCGS won’t be able to even pretend they deserve it and would have to fulfill their guarantee.
Everything I said is stuff I read in the PCGS guarantee to the best of my understanding. I might have missed something but the guarantee of grade & authenticity is one of the reasons people slab their coins in the first place right?
What you say is true in theory, but what I said is mostly true in the real world. As a collector, I use PCGS, and you’ll read on their website that when you send coins in for Reconsideration or Regrade, they guarantee they will not give those coins a lower grade. That contradicts your point. Additionally, we often read on this forum about people playing the “crackout” game, where occasionally the coin WILL come back graded lower. My understanding in those circumstances is PCGS will NOT pay a claim for the resulting loss in value!
Steve
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
But with CAC there are no "mistakes" - they are just giving their opinion. It is subjective, not objective.
I can't believe I am commenting on one of those CAC threads.
But it will probably get shut down soon.
I’m just going off what I read. For example if you send them a coin they graded 70 with a scratch across it they can’t even pretend it’s correctly graded.
in my humble opinion:
in this guarantee the following needs to be clearly defined in a very unbiased way or procedure:
owner or submitor **who is not a dealer
**dealer or private buying price. is there a standard??? some dealers buy high, some low.
purchaser, at any time and irrelevant, were bought. the graded coin and only that is the issue.
and, I believe undergraded coins also.
IMO, our host's guarantee is only a Nobel goodwill gesture. with many underlying conditions for a maybe.
Remember, having a coin graded is only buying someone else's opinion.
just searching for your opinions and thoughts.
for sure not wanting to step on our host's toes in any way.
One needs to be able to grade and look at coins if active in RCI investment. Your opinion of a coin should be your own. Yes the TPG slab and putting a pool in (sticker) helps marketing.
However it takes a buyer who wants the item and will pay the money. Furthermore the CAC coin you paid the high premium for will some future buyer do that too or just ignore, back off on that? Many players in their offers on the bourse do or discount.
Getting selling experience is a must so you can gauge the real demand and risk with a particular type of material. Rule 1 don’t overpay. Rule2 don’t get snookered into a bid war. Rule3 know your market - demand, pricing, etc.