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Article: "Self-Slabbing Sleaze" ........ yet another blow to our hobby?

GoldbullyGoldbully Posts: 16,823 ✭✭✭✭✭
From Coin Update News ...........................

Self-Slabbing Sleaze
By Michael Bugeja on January 31st, 2011

The Free Dictionary online defines “sleaze” as a condition of low quality or dirty appearance. Other meanings have to do with dishonesty and ethics.

Let’s focus on “low quality” as a condition of a coin. Let’s discuss ethics, too, and dispense with dishonesty as that is a state of mind, which cannot be easily proved in court.

In addition to being a numismatist, I’m an ethicist with a few published books, including Living Ethics Across Media Platforms (Oxford University Press, 2008). So I feel qualified to speak on the topic.

A practice may be legal and unethical or ethical but illegal. Texting while driving on the highway is legal in many states but unethical, as a person endangers his own and other lives because of driver inattentiveness. Civil disobedience, such as holding a religious ceremony on the steps of a government building, to protest an action, can be ethical but illegal.

If you’re interested in the topic, this post has succinct definitions.

Self-slabbing, as the term indicates, involves a person putting his or her own coins in holders and then labeling them with year, mint mark and condition. This happens every day when hobbyists put coins in flips and holders and sell them online, designating condition. But only a relative few people doing that also designate themselves as companies.

Doing so suggests expertise, allowing auctioneers to cite Red Book or PCGS prices for coins barely worth their melt value.

In my opinion, self-slabbing can be legal and ethical (accurately describing condition without designating yourself as a company), legal but unethical (accurately describing condition while designating yourself as a company), and illegal and unethical (holdering counterfeit U.S. coins while designating yourself as a company).

I can’t think of an everyday situation where the practice of self-slabbing would be illegal but ethical.

Let’s deal with legality. It’s perfectly legal for a person to holder a coin and print a label that accurately or inaccurately depicts the condition of a coin. If the person has incorporated under a numismatic name, but doesn’t accept submissions as a grading company and holders only his or her own coins, well, that’s legal, too.

Moreover, it’s the truth. Grading, one may argue, is entirely subjective. And no law states that a coin grading company has to accept submissions from other collectors and offer guarantees on authenticity and condition.

So when a hobbyist spots a self-slabber hyping coins far beyond their intrinsic worth, the hobbyist should know the difference between legal and ethical and all the shades of truth in between.

That said, the zealous hobbyist also has truth on his or her side. Grading may be subjective, but within a given range according to convention. Labeling a coin MS67 when it actually only is VF30 is off by 37 points. The act of designating a grade in itself at best implies a warranty and at worst, a modicum of expertise. Any numismatist can testify to that. More difficult to prove in court is the state of mind of the self-slabber, especially when a third-party is involved, in this case, an auctioneer.

image

In a recent estate auction, I was aghast at the prices people were paying for self-slabbed coins. One common Morgan dollar, labeled MS66, sold for more than $500 and appeared to be an AU53, cleaned coin, worth about $44. Other almost uncirculated and slider lots by the same company were depicted as super gems. One sold for about $400 and, in my view, was worth $65; one sold for $360, worth about $40; one sold for $160, worth about $35; and another sold for about $400, worth $35.

I approached the auctioneer afterward to see if he knew about self-slabbers. “I’m not a coin man,” he said.

image
image

There is no law holding auctioneers to be expert in what they sell, even if they sell coins regularly and should know better. Neither is there a law that holds online auction portals accountable for allowing such trade on their networks.

(I’d argue, however, that it is the portal’s interest to establish baseline rules, such as eBay has.)

You may have noticed that I am not naming the self-slabber in Coingrader Capsule. I am also asking my editor to monitor and not allow comments on Coin Update News and/or under this column that may or may not identify a self-slabbing company.

I know about law, too. As long as I don’t identify the person and this Web site takes reasonable precautions to do the same in the comments, then the burden of proving my own state of mind falls upon the self-slabbers. Worse, they will have to self-disclose who they are in order to threaten me, as is their wont, allowing me to file a counter suit against them in my capacity as a nationally known ethicist and numismatist, in as much as I have reasonable care not to identify a particular person or company.

Also, there is this: You as a Coin Update News viewer are free to research “self-slabber,” a specific numismatic term, via your favorite search engine. I recommend that all online auctioneers do the same and stop pleading ignorance that they know so little about coins, even though their auctions primarily sell coins. If you’re going to sell coins regularly on Internet portals, then you have an ethical obligation to know what you’re doing and whom you are hurting, usually onsite, as those attending an auction in person typically are not as schooled as those purchasing coins online.

In other words, you’re going to have to look the buyer in the eye one day when he or she learns about the actual value of self-slabbed coins.

Good luck with your reputation then.

Finally, grading may be subjective. But in the pix illustrating this column — again note my precautions in not identifying the self-slabber or even the year of the coins — I maintain that any average hobbyist (let alone expert numismatist) would agree that my grades are closer to the truth, which is the best defense, of course, in all matters legal and ethical.

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Comments

  • RussRuss Posts: 48,515 ✭✭✭
    Excellent piece. Fortunately, the self-slabbers aren't as prevalent as they once were as the market has become much more educated on the issue.

    Russ, NCNE
  • Very interesting and informative post.

    I used to post actively on the eBay discussion boards, and there were frequent opinions there expressed about so-called self-slabbers and what could probably be described as third-tier companies. In every area of human activity there is a creative tension between freedom and regulation, and this is no different. How far can 'we' go to protect the uninformed or the greedy from the consequences of their own actions? Good question, and our society is tending toward more regulation and to the reduction of freedoms.

    Including the freedom to buy an overgraded coin, no mattter what the holder. To me, this is no different than the bad old days when unethical dealers wrote bogus grades on 2x2s.
  • Great thread. Very informative.

    We have, in my area, a 13 y/o who started his own grading business. His experience in grading coins is only 4 years. Everything comes in 70, whether proof or unc. He charges more to slab coins than PCGS or NGC.
  • drwstr123drwstr123 Posts: 7,026 ✭✭✭✭✭
    image
  • rld14rld14 Posts: 2,390 ✭✭✭


    << <i>Great thread. Very informative.

    We have, in my area, a 13 y/o who started his own grading business. His experience in grading coins is only 4 years. Everything comes in 70, whether proof or unc. He charges more to slab coins than PCGS or NGC. >>



    Whaaaat??
    Bear's "Growl of Approval" award 10/09 & 3/10 | "YOU SUCK" - PonyExpress8|"F the doctors!" - homerunhall | I hate my car
  • yes,informative thread-thank you!
  • BBNBBN Posts: 3,761 ✭✭✭
    Great article. I believe ebay narrowing the selection of what slabs were allowed really helped put many of the third tiers out of business. I think PCI or NTC shut down because ebay banning of their slabs led to people stopping sending coins to them. I used to think getting coins in an ACG was a bargan. 8-9 years later and a more educated buyer, I found they weren't a bargain. They were overgraded coins that would have been better off raw.

    Positive BST Transactions (buyers and sellers): wondercoin, blu62vette, BAJJERFAN, privatecoin, blu62vette, AlanLastufka, privatecoin

    #1 1951 Bowman Los Angeles Rams Team Set
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  • << <i>

    << <i>Great thread. Very informative.

    We have, in my area, a 13 y/o who started his own grading business. His experience in grading coins is only 4 years. Everything comes in 70, whether proof or unc. He charges more to slab coins than PCGS or NGC. >>



    Whaaaat?? >>



    Exactly what I said when I heard of it.
  • rickoricko Posts: 98,724 ✭✭✭✭✭
    Excellent thread. Real good point about ethics...too many do not understand ethics or consider them 'civil fluff'. Cheers, RickO
  • FrankcoinsFrankcoins Posts: 4,569 ✭✭✭


    << <i>too many do not understand ethics or consider them 'civil fluff'. >>



    David Hall, Heritage, Q David Bowers all started "self slabber" operations. Those services became PCGS, NCI, and Hallmark/PCI respectively. PCGS ended up changing the industry.

    Those services, or better ones, could not develop today with the attitude that they are BY DEFINITION unethical, and should be banned from the market, ebay, boycott dealers who trade in them, etc.

    Don't claim you support "the free market" if you think corporate or government banning of new products and services is preferable to letting the quality of the offering and the acceptance of the marketplace determine success.
    Frank Provasek - PCGS Authorized Dealer, Life Member ANA, Member TNA. www.frankcoins.com
  • garrynotgarrynot Posts: 1,874 ✭✭✭


    << <i>

    << <i>too many do not understand ethics or consider them 'civil fluff'. >>



    David Hall, Heritage, Q David Bowers all started "self slabber" operations. Those services became PCGS, NCI, and Hallmark/PCI respectively. PCGS ended up changing the industry.

    Those services, or better ones, could not develop today with the attitude that they are BY DEFINITION unethical, and should be banned from the market, ebay, boycott dealers who trade in them, etc.

    Don't claim you support "the free market" if you think corporate or government banning of new products and services is preferable to letting the quality of the offering and the acceptance of the marketplace determine success. >>




    I could not agree more. Thank you for saying that. I believe a coin dealer or two slabbed coins a long time ago. I cannot think of their names, unfortunately.

    If I may follow up on Frank's point, if an individual or company is slabbing coins and doing something illegal or unethical, then the product becomes evidence of the transgression and we have to be patient and let the market and civil/ criminal enforcement authorities consider that evidence and act accordingly. God help us if the government steps in and tries to regulate coin collecting.

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