Dealers/collectors that "crack-out" PCGS/NGC coins......
puff
Posts: 1,475
This post is not meant to offend anyone inparticular. But while reading some of the earlier post today one that caught my attention was about cracking a coin from a PCGS holder in ms65 grade, and resubmitting it to another coin service of lesser standards, (that I will not mention), and getting it in a ms66 grade, just so they could sell it to make a profit!
I find it disturbing that there are so many coin dealers, and collectors that will "crack-out" a coin graded by PCGS/NGC holders and submit it to one of the grading services that don't adhere to the higher standards of the above mentioned services just to see if they can get a coin graded higher just to make a profit. I find nothing wrong at all in resubmitting, or trying to crossover a coin to another service just because you would wrather have it in that particular services holder. I also understand that "dealers" are in the "coingame" to make a profit..... But it just seems to me that it is just a little unscrupulous for them to try to make more money on the coin by taking advantage of the un-educated neophyte collectors that are just looking at the "plastic" with the grade on it, instead of looking at the coin itself.
IMHO
Again let me stress that I am not trying to offend, are imbarrass anyone by posting this message. I would just like to know the opinion of other dealer/collectors on this matter?
I find it disturbing that there are so many coin dealers, and collectors that will "crack-out" a coin graded by PCGS/NGC holders and submit it to one of the grading services that don't adhere to the higher standards of the above mentioned services just to see if they can get a coin graded higher just to make a profit. I find nothing wrong at all in resubmitting, or trying to crossover a coin to another service just because you would wrather have it in that particular services holder. I also understand that "dealers" are in the "coingame" to make a profit..... But it just seems to me that it is just a little unscrupulous for them to try to make more money on the coin by taking advantage of the un-educated neophyte collectors that are just looking at the "plastic" with the grade on it, instead of looking at the coin itself.
IMHOAgain let me stress that I am not trying to offend, are imbarrass anyone by posting this message. I would just like to know the opinion of other dealer/collectors on this matter?
0
Comments
David
I once bought a $150 coin in a PCI holder that I thought would grade $1500 at any of the major services. I liked the coin, but my intention was to flip it for a profit. I submitted it to PCGS, and it graded $200. I cracked it and sent it to NGC, where it graded $200 (it did get a star, I was looking for cam). About six months later, I listed it on Ebay as I was cleaning out my safe. It sold for $90 in the NGC holder. The buyer was the same person I had purchased it from originally. He was candid enough to tell me he intended to cross it back to PCI where it would get the designation. I'm sure he figured it would be picked off by a crossover expert like myself. He was smarter than I thought I was.
and it sets us apart from practitioners and consultants. Gregor
IMO the grading services are PRICING SERVICES rather than GRADING SERVICES and all collectors should realize that.
New so-called grading services are popping up like weeds. None of them seem to be worth looking at.
At the last Long Beach show I was offered a 22-D toned Peace in a PCGS MS64 holder for $750. Beautiful coin, nice lime green colors ect. While I was thinking about it, another dealer bought the coin. It was then re-offered to me @ $1250.00. Hmmmm....needless to say I passed.
At this Long Beach show I walked by the same dealer's table and there sat the same coin in an ICG slab, but now it was an MS65.
I asked about the price, the dealer didn't remember me and I was told the coin was $2000.00
I find it interesting that this dealer thought that the grade mattered. Now he will have a hard time moving that coin, because of his crackout game. In a PCGS holder and a MS64 grade, someone would have probably paid him $1000 for it. A nice quick $250 profit. Now he wants to be greedy and more then double his money and the coin probably won't move unless he gets it back into a PCGS holder. And I'm sure he would have to do it raw.
So sometimes this comes back to bite them on the A**!
Michael
<< <i>Interesting topic....
At the last Long Beach show I was offered a 22-D toned Peace in a PCGS MS64 holder for $750. Beautiful coin, nice lime green colors ect. While I was thinking about it, another dealer bought the coin. It was then re-offered to me @ $1250.00. Hmmmm....needless to say I passed.
At this Long Beach show I walked by the same dealer's table and there sat the same coin in an ICG slab, but now it was an MS65.
I asked about the price, the dealer didn't remember me and I was told the coin was $2000.00
I find it interesting that this dealer thought that the grade mattered. Now he will have a hard time moving that coin, because of his crackout game. In a PCGS holder and a MS64 grade, someone would have probably paid him $1000 for it. A nice quick $250 profit. Now he wants to be greedy and more then double his money and the coin probably won't move unless he gets it back into a PCGS holder. And I'm sure he would have to do it raw.
So sometimes this comes back to bite them on the A**!
Michael >>
My point exactly! I hope it comes back to bite him!
roadrunner
I am most disturbed by the dealer participation. A dealer can have twenty, thirty or more years selling coins, but when they lay out an overgraded coin for sale and price it exactly at the rate that the slabbed grade states then that shows me they are exploiting others. It is like the slabbed grade exempts them from revealing or disclosing what the grade really is. If a collector of a few years can quickly spot the overgrades in slabs then you know the dealer surely could.
Now my experience comes from circulated grades for which variances of "opinions" should be very narrow. I could see how Unc. grades could be more open to many opinions.
For me it boils down to collecting circulated coins. I am not reliant on a third party opinion, and the prices are more reasonable if I do err.
Tyler
<< <i>The crackout and resubmit game can easily be defined in one word "GREED". >>
/Really?
I guess it is as much GREED as the plumber who charges $75.00 an hour is GREED or the Chiropractor who charges $150.00 for a thirty minute session.
See- what we sometimes forget is as much as we love this "hobby" for others it is a business. It is their livelihood.
In my opinion it is not GREED. Call it the cost of doing business. Who can blame a Dealer/businessman for attempting to maximize his profits? I no longer do.
It is up to each of us to get as educated as possible and purchase wisely knowing the above written events take place and knowing behind the dressing room curtain titled "HOBBY" an Industry is in full swing.
peacockcoins
If I were to crack it out and send it to PCGS or NGC and it came back FOUR GRADES lower, it would be worth more than in it's current coffin. Has the coin changed? No. Is it graded higher? No. Are newbies overpaying for the bogus presige of some slabbing company? Yes!
Auction Link
For the record, I bought if for my slab collection, never seen one of those before... let alone a MS69 steel cent. LOL.
Now, as far as dealers being able to find undergraded coins, send them in and get better grades. It is simply called business. For some reason people do not understand that businesses must make a profit or they will simply go out of business. Although, there are some huge numismatic houses, I think most dealers are small businesses. The small business people have taken the risk to be in business, and simply have earned the right to make a profit. If all the coin businesses went out of business, it would be much harder to sell coins, there would be no coin shops, there would be no grading services, there would be a bunch of collectors fighting among themselves.
Maybe the government should make it illegal to collect coins, than no one could get ripped off.
Coins are bought and sold on a supply/demand system, and if there is a higher demand for higher grade coins, the dealers are only supplying the needs of the collectors.
FYI--I am not a dealer, nor a business owner. My degree is in business, and I see and work with managers and people everyday that don't understand a business is in business to make a profit. If they don't make a profit they go out of business.
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
<< <i>The crackout and resubmit game can easily be defined in one word "GREED". >>
it wasn't in my case...i cracked some coins out of anacs,segs, pci, icg .......only to submit them to pcgs to have them graded and holdered
so i could fill some holes in my proof lincoln collection.
while it would have been nice to have the grades higher...none were, and only one out of 8 crack-outs came back a lesser grade.
it was an NGC 1995 doubled die obv. in 68...at PCGS it came back a 67 ...no greed ...just bought what was at the time available to me ...
(and could afford)
<< <i>You got it backwards. If you want to sell it for more money than it's really worth, you crack it out of the lesser MS66 holder and have PCGS/NGC slab it as a 65.
I tend to agree with this and with Dog97. I am sure there are a few people that have gotten burned, but for the most part, in my daily dealings I come across "liner" coins like this all the time. PCGS coins are basically treated as accurate, NGC coins are sometimes accurate but you have to look at the coin, then ANACS are usually treated as one point off, the you have ICG, PCI, SEGS etc. where I see most people taking two and three points off, so you usually are better to leave it in the NGC, PCGS holder. Not only will it sell faster, you won't have to bs someone by saying..."oh, it looks like they (ICG, PCI, SEGS, etc.) got one right this time." I think for the most part, most people even on ebay have caught on to this game. For sure poeple at shows have and they discount accordingly. I used to see people getting duped, especially on semi modern coins all the time on ebay, but like Dog said, the smart people get educated and move on. It seems most people have educated themselves.
morris <><
** I would take a shack on the Rock over a castle in the sand !! **
Don't take life so seriously...nobody gets out alive.
ALL VALLEY COIN AND JEWELRY
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"If it were any good it would be in a PCGS slab", "all PCI gold label coins are cr@p", "anyone that doesn't sell PCGS/NGC exclusively is trying to rip you off"... all of that is complete boolshiat. I just had a MS60 1927-S PCI GOLD LABEL Peace $ upgrade to MS62 at NGC. The poor dealer I bought if from couldn't even get MS60 money for it because of this cr@p. Heck, he couldn't even get PCGS AU55 money for it in that holder The coin is EXACTLY the same now as before. Buy the coin not the holder, doesn't matter WHAT holder that is, they all suck IMHO. BTW, I DID pay him full MS60 money for it. He made money, I made money, nobody got ripped off. That's the way it should be.
I am not suggesting that dealers rip people off. Most are straighforward and upstanding business people.
People need to get educated to grading, and buy the coin not the holder, as you did. You paid a fair price for a coin and had it re-graded--GREAT UPGRADE! That is the way it should be.
I remember the days when everytime you tried to sell something to the local dealer (in my area) they undergraded it, and every time you wanted to purchase they overgraded. The slabbing companies actually have made the hobby better. It is much harder to over grade or under grade when the slabs out there make it tougher and tougher to incorrectly grade (on purpose).
I once sold an absolutely beautiful 1914-D $20 Saint for unc money. The dealer insisted the coin was AU at best. After much haggling, we agreed for him to take it on commision. I would get $700 when the coin sold. He laughed in my face when the took the $2000 he got for the coin and handed me the $700. If the coin was in a PCGS holder graded MS65 like it should have been, I would not have been taken. Needless to say, I don't think too much of that dealer, but hey, I didn't have to sell!
(That was about 20 years or so ago.)
Now, I would not trade the way things are today, to go back to the raw game!
Tony
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
Some were very enlightening.
To expand on something DHeath wrote,
"Almost all coins eventually migrate to the holder that'll fetch the most money."
This has been a pet theory of mine for a while now,
in analyzing "liner" coins (high grade, otherwise common coins that take a big jump in price for one whole point) and difficult to grade coins problem coins (A coin that is rare in all grades, and the present example has some issues, like cleaning, heavier scratches, rim damage, etc.) you find some interesting trends.
For example, in the first case, "liner" and "PQ" coins indeed "migrate" to their most productive holder. In the example of a really nice MS65+ Liberty $20 gold, the coin might "work" best in either a PCGS 65 holder or an NGC 65* holder, or an ANACS or ICG 66, or an SEGS or PCI 66 with some additional "praising" verbage such as PL or PQ, or an NTC or ACG 67 (although, admitedly, these last 4 are far less likely to be the "best" holder for the coin)
Notice that one can eliminate the "MS" from the grade, and just refer to the company's "level" within the hierarchy, and in the case of an expensive coin like a 65-66 $20 Lib, it's going to end up (be "maxed out" in a top tier holder, if it is indeed a problem free, high grade coin that is truly a nice 65 but not quite 66.
In the other example, imagine an 1801 half dollar with VF details and appearance, but with moderate scratching on both sides. The coin has good eye appeal from arm's length but under a glass has a dozen or so 5-10 mm field scratches as if with a pin or small nail. The coin will not be holdered by PCGS or NGC, so they are out. ICG might also decline to slab it, but ANACS will detail grade, note the damage, and net grade the coin. SEGS will provide a higher (than anacs) overall grade and note the damage, and PCI will provide an even higher grade than SEGS but will put it into a red border holder with damage noted. NTC will also slab the coin with scratches noted. The bottom tier companies like ACG and the "private coin world slabbers" might not even note the scratches and just grade the coin, assuming that the scratches looked like "test marks" where a merchant verified that it was a silver coin, maybe because he had never seen one before, to which I can somewhat agree to, remember this is 1801, a coin scarce in all grades and worth getting into some kind of holder, to guarantee genuineness, even if the eventual purchaser of the coin is likely to break it out to examine it and it's edges closely. My point is that if you're selling or "working" a coin, it pays to get it into a holder that will make the coin more liquid, valuable, or both, and people will tend to do this.
So it seems each coin is a different circumstance and yes I definitely believe there is a "flow and flux" of coins into the "correct" holder, by which I mean most market efficient holder for the coin. There are some back and forth in this process, where a submitter "tries" to improve the slab that surrounds the coin, for whatever reason, and is either successful or not. I think it is a wonderful thing to witness!
Liberty: Parent of Science & Industry
I remember the days when everytime you tried to sell something to the local dealer (in my area) they undergraded it, and every time you wanted to purchase they overgraded. The slabbing companies actually have made the hobby better. It is much harder to over grade or under grade when the slabs out there make it tougher and tougher to incorrectly grade (on purpose).
I once sold an absolutely beautiful 1914-D $20 Saint for unc money. The dealer insisted the coin was AU at best. After much haggling, we agreed for him to take it on commision. I would get $700 when the coin sold. He laughed in my face when the took the $2000 he got for the coin and handed me the $700. If the coin was in a PCGS holder graded MS65 like it should have been, I would not have been taken. Needless to say, I don't think too much of that dealer, but hey, I didn't have to sell!
(That was about 20 years or so ago.)
Now, I would not trade the way things are today, to go back to the raw game!
Tony >>
Tony, It is for this very reason that David Hall started pcgs in the first place, and while I have my fair share of disagreements with pcgs, they have helped put a limit on experiences like the one you describe. There are still firms like coin vault and Littleton, but there are many upstanding firms that don't do that stuff and would have a more difficult time starting up today then it used to be.
I heard a piece of advice along time ago that we all know by hear; [buy the book before you buy the coin] but a recent piece of advice I heard on these boards I like even better is; study lots & lots of examples of pcgs or ngc coins before you buy to learn what the big time graders are looking for, both of those thoughts sound like good ideas to me.
It would be interesting to see how those who bagg on pcgs would have reacted to the "good old days" 20 years ago. If you wern't old enough to collect then, alot of us have stories just like Tony.
Les [p.s., it is better now then it was then]
Like any bubble it too will burst one day. The damage will be tremendous, how many thousands of collectors will abandon coins and will they ever return? Dealers will go out of business as there will be fewer suckers, I mean buyers. Grading services will suffer with less submissions. This is so obvious to me as dabbler/collector that for a full time dealer to continue perpetrating the practice is fraud at its worse or morally corrupt at its best.
But how can the game be stopped when so many depend on it to make a living and so many seeking "acceptance" via registry sets continue to play?
I can honestly say in the past year I don't think a week goes buy where I don't think about selling it all and just buy coin books. In LB this weekend I saw a New Orleans Barber Half which was in a MS64 about 2 years ago with some rather unique toning, today, same coin, resides in a NGC MS65 holder with a $8k price tag, in 64 it was only a $4k coin. It is not a 65 but it snuck in and will earn the dealer a tidy profit if he can move it anywhere north of $6k. How ethical is this?
In another thread I asked how many would conserve their coins to 2-3x their money, an overwhelming response was yes they would do it. At a certain level it's all about money and people will do bad things, sometimes justified because others are doing it. It's at this juncture where I begin to question if I am not in a rigged game with all my chips out on the table.
I think it will always trend up in value over the long run, even if prices gyrate over shorter terms.
The coins and collectors I worry about are the new ones that are currently among the few finest known, but will someday be tied with hundreds or thousands of equally perfect coins out of millions of coins minted, which were treated with care and plastic since day one and virtually all minted still exist in high grade.
Liberty: Parent of Science & Industry
Progress is a wonderful thing! Some people are against progress in all walks of life. I'll bet people thought the automoble was just a fad.
Tony
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
No one can get it right every time.
Example: I have a coin that I've owned for 12 years. Bought in a PCGS Slab graded MS66. It was the first one ever graded that high. I thought the coin was a 67. Kept the coin in the original slab for 4-5 years, then started with the crack out game. The coin has graded as follows: Body bag (I'll never know why), MS63, MS64, MS65 and MS66. Cost variance goes from $10 to $500.
I have another that was bought in a MS65 holder. I bought the same date MS66 slab coin that was submitted with my MS65 and sold it. I thought the MS65 was actually nicer than the MS66. My profit from the MS66 paid for the MS65. I submitted the MS65 it came back MS63. Then MS65, Then MS64, Then finally MS66. Price difference goes from $4 to $6,000.
Who is fooling who???
Bottom line, trust your grading instincts.
Aren't all better off than pre slab factories, when an old time dealer said it was BU, then it must be BU, even though it had wear? With the price variances, I'm glad the services exist, even though we don;t alwasy agree with the grade.
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
<< <i>Learn to grade for yourself. >>
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
<< <i>The crack out game is a fraud. But it's a fraud which allows the people in the business of coins to continue to remain in business.
<snip>
I can honestly say in the past year I don't think a week goes buy where I don't think about selling it all and just buy coin books. In LB this weekend I saw a New Orleans Barber Half which was in a MS64 about 2 years ago with some rather unique toning, today, same coin, resides in a NGC MS65 holder with a $8k price tag, in 64 it was only a $4k coin. It is not a 65 but it snuck in and will earn the dealer a tidy profit if he can move it anywhere north of $6k. How ethical is this? >>
I agree. That's one of the reasons why I collect primarily circulated coins. For the vast majority of coins, there are no price price breaks from EF40 to EF45, etc.
I couldnt disagree with you more. Greed is overgradeing raw coins, or cracking out and personally grading them higher as raw coins. Playing the "crack out game" is keeping yourself honest.
David
<< <i>...while reading some of the earlier post today one that caught my attention was about cracking a coin from a PCGS holder in ms65 grade, and resubmitting it to another coin service of lesser standards ... and getting it in a ms66 grade, just so they could sell it to make a profit! I find it disturbing that there are so many coin dealers, and collectors that will "crack-out" a coin graded by PCGS/NGC holders and submit it to one of the grading services that don't adhere to the higher standard >>
is 1's standard really higher? or just different?
what about YOUR standards? why do you have to rely on plastic to set a standard at all?
K S
<< <i>When a man with experience meets a man with money, the man with money often gains experience.
I once bought a $150 coin in a PCI holder that I thought would grade $1500 at any of the major services. I liked the coin, but my intention was to flip it for a profit. I submitted it to PCGS, and it graded $200. I cracked it and sent it to NGC, where it graded $200 (it did get a star, I was looking for cam). About six months later, I listed it on Ebay as I was cleaning out my safe. It sold for $90 in the NGC holder. The buyer was the same person I had purchased it from originally. He was candid enough to tell me he intended to cross it back to PCI where it would get the designation. I'm sure he figured it would be picked off by a crossover expert like myself. He was smarter than I thought I was.
Great post!
Eventually if all these trends continue, every coin will end up in the holder in
which it is worth the most money. In a sense every coin will be overgraded
because crackouts (barring grading error) will always result in a lower price
coin.
The crackout artists have their work cut out for them.
<< <i>There will always be a market for "finest knowns" and if it's a truly scarce or rare coin in any condition,
I think it will always trend up in value over the long run, even if prices gyrate over shorter terms.
The coins and collectors I worry about are the new ones that are currently among the few finest known, but will someday be tied with hundreds or thousands of equally perfect coins out of millions of coins minted, which were treated with care and plastic since day one and virtually all minted still exist in high grade. >>
Baley: There are some moderns which are grossly underrepresented in the pops compared
to the number of survivors. Obviously this is true for the lower grades but there are some of
these coins in higher grade which aren't fully counted yet. It is highly improbable that ANY pops
will increase the amount you suggest except in the grades which are currently too low to warrant
the cost of grading.
Some moderns have probably been mostly checked for gems, like the Ikes, but some others
this may not apply to.
This is no more a reason to avoid them than the low PCGS pops for Morgans was a reason to
avoid those coins in 1986.
With any coins being bought at prices in excess of face value/ melt value people should exercise
care or might not get their money back when they sell.
I'm not sure how relevant this is since there are relatively few moderns being cracked out for
higher grades. There are several reasons for this but the largest is that with these coins "what
you see is what you get". There are very few with hidden surface problems or a little rub. Gen-
erally these will be pristine with strike imperfections and hits inflicted at the mint.