PCGS Grading Tiers & Inflation
ProofCollection
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Over the years inflation has impacted everything including grading fees, but the grading tiers (as I can recall) have remained the same. Is it time for PCGS to increase the Modern and Modern Value tier from under $300 to something higher? And the Regular and Modern tiers from $2500 to something higher? We are at the point where a proof gold buffalo is too valuable for this tier. Even the Express tier limit at $10k is kind of low nowadays.
Thoughts?
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Comments
Don't hold your breath waiting for something like this to happen.
If I recall correctly the tier levels did change but they went down. I believe it was 3000 and 20,000 (now 2500 and 10,000) but would need to check that. Not sure if others changed.
https://youtube.com/watch?v=_KWVk0XeB9o - Ruby Starr (from 'Go Jim Dandy') Piece Of My Heart
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https://youtube.com/watch?v=D0FPxuQv2ns - Ruby Starr (from 'Go Jim Dandy') Maybe I'm Amazed
RLJ 1958 - 2023
Sometimes companies listen if the customers clamor for something. Sometimes. It doesn't hurt to raise the issue.
Understand and maybe if they did go down (as I recall) then that might strengthen the request.
https://youtube.com/watch?v=_KWVk0XeB9o - Ruby Starr (from 'Go Jim Dandy') Piece Of My Heart
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https://youtube.com/watch?v=D0FPxuQv2ns - Ruby Starr (from 'Go Jim Dandy') Maybe I'm Amazed
RLJ 1958 - 2023
I agree, the tiers should increase when the grading fees increase. I was not happy when they decreased the regular limit to $2,500.
I agree.
I submit primarily Modern and Modern Value. I wish the tiers were closer to $5000 and $500 respectively.
I used to be able to grade the 1 oz AGE (on occasion) and Buffalo at the Modern level. Sometimes gotta spring all the way to Express - when I dont really need the faster level, and spring for the $65. Too much dollah!!
Case in point, the Buffalo is gonna run ~$2750+ this year (on Thur 5/12) ... so, Express??? BLAH.
It would be a bad decision from PCGS's point of view, just think about how much more revenue they pull in by having the coins go up in grading tier and therefore grading fees.
Coin Photographer.
So you want to pay more to submit your coins??? Please don't get the corporate wheels a turning!
But how much do they miss out on because people don't want to pay the higher fees and go to a cheaper TPG or just keep raw?
Based on their decision to not change it, I would guess less than they are making with the tiers the way they are.
Coin Photographer.
Good point. How does the price fee schedule of NGC grading compare to that of PCGS?
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
I think it might happen along with big fee increase.
What’s the incentive for them to do this?
They could potentially get more submissions. When the price escalates, the calculation of what is worth sending changes.
Perhaps to stay competitive with NGC. It's not like they have a monopoly.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Possibly true. I'm pretty sure they have a good feel for their pricing, submission volumes, and profit margins. It's unclear to me that inflation alone would push them out of their sweet spot.
I suppose, but the effect of competition on pricing goes well beyond the influence of inflation. Mostly inflation is an independent factor theoretically affecting all TPGs equally.
People keep posting threads about how long it's taking to get coins graded. With that in mind, why would PCGS think it was necessary to do anything to increase submissions?
They may want to expand to make more money. They certainly weren't bought because the investors want to make less money.
It may be cost prohibitive to expand. I don't know. But it is worth considering the possibility.
That's a different topic altogether. PCGS should staff at appropriate levels to handle demand.
If grading 500k coins/year is profitable then grading 600k coins a year will be more profitable. (No clue if those numbers are realistic).
a) It's the fair/right thing to do. If $300 coins from 2010 are on average worth $500 now, then it stands to reason that the tier should still be valid with a $500 limit.
b) To stay competitive and not drive customers to the competition
c) To maintain/increase market share which IMO leads to increased demand
Well, sure. But if your customers are already complaining about wait times, does it make sense to do something that would likely increase them? Adding to a backlog doesn't generate income.
Why does PCGS staffing and capacity have to remain the same?
Exactly this. You may not want to expand for what you view as a temporary spike, but you would for a permanent shift.
It doesn't. I was responding to the suggestion that the tier valuations be revised. Nothing was said about hiring more people.
Then why did you ask about increased wait times? The unstated assumption is the PCGS management is competent and will staff appropriately to maintain acceptable wait times. You'd only be concerned about increased wait times if you felt PCGS would not respond to changes in demand levels appropriately.
I think it would have to be part of a strategy change. There is no driving force to ONLY change the tiers, as you suggest.
Oddly, the original suggestion did seem to be to simply increase the tier limits due to inflation. At the very least, that would logically come with an increase in cost, due to the same inflation.
Because I was addressing the suggestion that tier valuations be revised. Nothing was said about hiring more people.
Reading the threads here, the natives are already getting restless due to extended wait times.
See above.
It's not my suggestion, it's a suggestion from the first post. I just responded to it.
The counter to that is that they have increased the fee several times without increasing the tier (and even reducing the tier) so there is no direct correlation. If they can grade a $300 coin for X, they should also be able to grade a $500 coin for the same fee. Really the only thing that changes is perhaps a little bit more liability/insurance for PCGS Guarantee coverage (which incidentally covers that $300 coin even if it eventually doubles or triples or more in value.).
If they're competent, they've probably already thought out the pricing of their product and considered the implications of making changes, don't you think?
I do.
I don't. I think they are operationally competent (eg, wait times, capacity), but sometimes business strategy tweaks (eg, adjusting tiers) need to be inspired by customers.
The posters here who have complained about wait times might disagree...
I guess a prime example is a 2022 Proof Gold Buffalo.
US Mint price $2790.
If I had my way it would be eligible for "Modern" tier and cost $53 to grade with first strike.
But now, the only choice is Express which not only requires more urgency from PCGS, boosts grading price to $83 with first strike.
Charging $83 to grade a common modern issue is excessive, especially when you consider the high likelihood of getting a 69 (or lower) in which case the submitter is likely to lose money.
It's unclear why it's necessary to charge an extra $30 for this coin.
It's one troy ounce of gold, so the submitter surely can afford the extra bucks to get a certified graded coin.
It's that simple.
So prices should be set based on how much we can afford to pay? I'm sure there are members here who can easily afford to pay thousands to grade a coin.
In this example, for $83 all we're getting is a grading opinion (requiring no special or advanced grading knowledge/skill), a label, a piece of plastic, and a guarantee which realistically will never be claimed.
What you're getting is the faster turnaround for the $30 difference... whether you want it or not, of course.
I would point out that PSA grading is $100 minimum cost, making your $83 a bargain.
Do you think fees should be based, in part, upon whether the submitter will lose (or make) money?
It’s not “necessary” to charge an extra $30 for this coin. But you could say the same about various fees charged for many or most other coins, as well. Even though submitters don’t like the results, grading companies are in business to make money and increase profits.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
If you value the coin at the minimum wholesale value if you were unlucky in grading, and at a lower tier are they going to care if the coin ends up grading at a higher level?
I would prefer to not have that choice made for me. Especially with current turnaround times, I'd rather pocket the $30 and wait. Plus ... I'm a cheep bastyd!
I've also had recent orders that in past years coulda been combined in 1 submission that I had to break up. The gold / silver eagles have had limited mintage due to covid or whatever circumstances, or just set low by the mint.
If you were really cheap, you could pocket a lot more than $30 by enjoying your coins raw, you know.
No, but it's something the TPGs need to understand that every submitter is considering on modern widgets.
NGC will grade the same Buffalo for $19 + $12 Early/First Release with a turnaround of 28 days if I read their site correctly. How can NGC do it so much cheaper? FWIW, ANACS is $29 and I don't think they do First Strike equivalent.
Exactly. I understand that for premium tier coins they automatically get and deserve the express service levels, but the 2022 Gold Buffalo is a widget, and those who don't mind waiting shouldn't be forced into paying more.
I would argue PSA grading requires special skills, knowledge, and talent. Grading a widget such as the 2022 Gold Buffalo is entry-level grader material, and the fee should reflect this.
Now you're just being silly. Gold Buffalos don't have their own tier much less their own dedicated graders
That's not at all what I said.
Theres a fine line between cheap and chintzy.
And on a serious note, I realize there is NO incentive for PCGS to change their pricing. Just some wishful thinking on my part.
Also (not directed at this quote), I've found the Proof Buffalos to straddle the tier line in recent years. In the past I could include them with my other annual gold proofs (when I typically buy the fractionals, like 1/4 oz).
It's kind of what you implied when you contrasted PSA fees (which could be for a brand new card, no special knowledge required) with gold Buffalo fees.
Ultimately, it's supply and demand with cost as the floor at such the service ceases to exist.
OK, I'm not that familiar with PSA, I didn't know that fee applied to brand new trading cards, I don't know that market at all. However, I do recognize that it's vastly different in that while it is practical to collect and certify one of every mint issued product for a given year, doing the same for a card for every baseball and football player would be arduous and cost prohibitive even at much lower fees.
Yeah, the cards are crazy. There's a 9 month backlog even at $100 each
It doesn't matter where you draw the tier line, there will be coins that straddle it. Is there anything special about proof buffalos that makes it important that they not be affected by this?
True, but competitors have higher limits and PCGS should, IMO, as a goal, try to include or accommodate all US Mint issues with a non-express, non-premium tier. Nothing special about the buffaloes, the same issue applies to the 1oz Palladium eagles and 1oz Gold Eagles.
If they're doing something differently than you would like, you might consider that they are acting on information unavailable to you. It's also possible that their goals do not match yours.
Just a thought...