Unhappy with Downgrade Review buyout offer...

bushmaster8 · September 20, 2005 2:23AM

Here's the coin: 1950-D Franklin PCGS MS66 FBL

The Heritage image looks nearly flawless, but the coin had a major hit right on the cheek and lots of

luster breaks/scrapes in the field. I pd. $2875 with the juice in the FUN auction last January.

Sent it for downgrade review, and it went down to MS65 FBL.

I was just told I have two options:

1) PCGS keeps the coin and gives me $2500

2) I get the coin back in a MS65FBL holder and a check for $2000

I was under the impression that PCGS would offer to reimburse me the entire $2875 that I paid.

I have seen other posts here on the forum that support the purchase price/buyback scenario. Is it fair for PCGS to handle these Downgrade Resubmissions on a case by case basis? Shouldn't everyone be given the same options??

DrWho · September 20, 2005 2:27AM

looks like the 'juice' is yours(?)

Ronyahski · September 20, 2005 2:29AM

I believe the policy is they pay fair market value. I would argue that $2500 is not FMV for a 50-D in 66FBL.

DennisH · September 20, 2005 2:29AM

My reaction is that PCGS' offer is an offer. In other words, counter back with a copy of the invoice showing your actual cost. I would expect them to fully reimburse you.

291fifth · September 20, 2005 2:29AM

The important issue here is to cut your loss as much as possible. Don't lose sight of that.

Longacre · September 20, 2005 2:34AM

I think both sides would have to justify what FMV is. If you got wild and paid $5000 for the coin, I don't think that would be the FMV. What is PCGS's support for the price? When in doubt, just point them to their own pricing guide, which I think is over inflated by about 20%.

RYK · September 20, 2005 2:35AM

Not knowing the specifics of pricing for the coin, their offer is in the ballpark of what you paid and seems reasonable to me based on the information provided. Consider yourself lucky for getting out of a Heritage trap coin with minimal damage.

Russ · September 20, 2005 2:38AM

<< I believe the policy is they pay fair market value. >>

That's correct. The actual purchase price may be considered, but only as part of the equation to determine FMV. In other words, they take a look at multiple sales both at auction and retail to arrive at a buyout number, and that number can be higher or lower than the actual purchase price. They have to do it that way since coins are sometimes hammered down at far more than they are realistically worth.

Russ, NCNE

foodude · September 20, 2005 2:41AM

What value did you list on the form you sent to PCGS for the review?

VamGuy · September 20, 2005 2:59AM

<< I was under the impression that PCGS would offer to reimburse me the entire $2875 that I paid. >>

Whether you paid $10,000 for the coin or received it free as a gift should have no relevance. PCGS shows the value of this coin at $3,750 on their own website. In reference to their own price guides, PCGS states "The PCGS Price Guide is a guide to assist the coin buying public in determining values for all significant United States rare coins."

They further state "The prices listed in the PCGS Price Guide are the average dealer asking prices for properly graded United States coins. The prices are compiled from various sources including dealer ads in trade papers, dealer fixed price lists, significant auctions, and activity at major coin shows. Prices for the most actively traded coins are updated daily. Other issues are updated as needed. All prices are reviewed at least once a month."

IMO, Any offer less than $3,750 is an admission that their price guides are a scam which are intended to defraud collectors.

3Legs · September 20, 2005 3:01AM

Maybe you shouldn't have sent it in for downgrade review. On another day it might wind up back in a 66FBL holder again.

Russ · September 20, 2005 3:24AM

<< PCGS shows the value of this coin at $3,750 on their own website. In reference to their own price guides >>

There are also many coins in the price guide valued at substantially less than actual fair market value. Should they also use the guide to arrive at the buyout number in those cases?

Russ, NCNE

jcping · September 20, 2005 3:47AM

At least, PCGS uses the number from their current price guide.

Also, you bought the coin 9 months ago and the market for FBL coins changed (could go up and could go down). IMO, it is not fair for PCGS to use 9 month old price guide to pay you.

If you return the coin to Heritage after auction, don't you have to pay re-stocking fee?

scher · September 20, 2005 3:55AM

I think the offer is fair..its cool that pcgs has this program in place..
Bruce Scher

VamGuy · September 20, 2005 4:00AM

Russ, you make a very valid point.

I guess that the most fair solution would be to pay the current fair market value based on the standards used to determine fair market value. Which were stated as "the average dealer asking prices for properly graded United States coins. The prices are compiled from various sources including dealer ads in trade papers, dealer fixed price lists, significant auctions, and activity at major coin shows."

greghansen · September 20, 2005 4:22AM

The important issue here is to cut your loss as much as possible. Don't lose sight of that.

EJB · September 20, 2005 4:34AM

I agree with VAMGUY, pcgs should go with there own price list, I would be courious how this works out..

Russ · September 20, 2005 4:37AM

<< I agree with VAMGUY, pcgs should go with there own price list, I would be courious how this works out. >>

If you want them to adhere to their price guide in this case, does the same thing apply when the price in the guide is below market value? You can't have it both ways.

Russ, NCNE

EJB · September 20, 2005 4:44AM

Russ, than what your saying is that the pcgs price guide has no value ...

foodude · September 20, 2005 5:08AM

Russ, than what your saying is that the pcgs price guide has no value ...

Like the GS, BS, Trends, etc., it is a "guide", but not a precise, end all be all list of value.

zkcoins · September 20, 2005 5:11AM

<< Russ, than what your saying is that the pcgs price guide has no value ...

Like the GS, BS, Trends, etc., it is a "guide", but not a precise, end all be all list of value. >>

bushmaster8 · September 20, 2005 5:17AM

It's not like I am a big-time dealer (or even a weenie dealer) that can just write off the $375 difference or make it up in some other way.

I am just a collector. This is the most expensive coin I ever bought. I was quite surprised when I won the coin at my bid of $2500.

I had to put it on the six- months to pay lay away plan, thereby losing my return privledge.

I suspected that perhaps there was a problem with the coin at the time because it did not sell for more.

But, I put my faith in PCGS, and felt that if the coin wasn't all there when I got it, then the Downgrade Resubmission would bail me out.

When I got the coin after the six months, I knew immediately that it was overgraded.

Thanks for all of your input thus far, everyone!

Russ · September 20, 2005 5:20AM

<< Russ, than what your saying is that the pcgs price guide has no value ... >>

That's pretty much been the consensus for a while now. Recently they've been working to improve it, but they still have a long way to go. It's tough to have accuracy with any static price guide in a very dynamic market.

Russ, NCNE

AndyNC2005 · September 20, 2005 5:31AM

Yes it stinks to be out $375, but how much would you be out if there were no grading guarantee?
I would learn from this and apply this lesson to future bid. I would take the $2000 and the coin. Andy

zkcoins · September 20, 2005 5:31AM

<< 

<< Russ, than what your saying is that the pcgs price guide has no value ... >>

That's pretty much been the consensus for a while now. Recently they've been working to improve it, but they still have a long way to go. It's tough to have accuracy with any static price guide in a very dynamic market.

Russ, NCNE >>

Think of all the hours needed to research the prices.

jamesfsm · September 20, 2005 5:40AM

"The Heritage image looks nearly flawless, but the coin had a major hit right on the cheek and lots of

luster breaks/scrapes in the field." Text

Actually, your coin was accurately imaged by Heritage. If you blow up the in slab scans on the Heritage auction, you can see the myriad hits and ticks on the coin. It looks like a mistake that it got in a 66 holder.

Cnitas · September 20, 2005 5:43AM

<<

Think of all the hours needed to research the prices. >>

Perhaps PCGS should not publish a price guide if they do not have the resources and/or time to accurately reflect the prices.

Jcarney · September 20, 2005 6:15AM

<< Consider yourself lucky for getting out of a Heritage trap coin with minimal damage. >>

Respectfully, PCGS IS the company that overgraded it. Are you saying that auction companies have an obligation to second guess the TPGs?

greghansen · September 20, 2005 8:29AM

It's not like I am a big-time dealer (or even a weenie dealer) that can just write off the $375 difference or make it up in some other way.

I'm sympathetic to this...and then again I'm not. If you can't afford to take a 15-20% loss on a coin when you make a mistake in judgment; then you shouldn't be buying that level of coins. Same goes double for spending that amount of money in reliance on an auction photo. Many board members are happy to look at an auction lot for you and pass along their impressions of the coin. Most fellow collectors do it free of charge. Many professionals will review the coin and only charge a very reasonable fee if you are successful in bidding on the coin. In this case, I'm sure the opinion of a professional would have kept you out of the coin in the first place. $375 for an education of this type. Seems more than reasonable to me. Again, not intended to be harsh, although I'm sure it sounds that way. Just my opinion as a multi-time graduate of the School of Hard Knocks!

wondercoin · September 20, 2005 8:35AM

LESS THAN 3 YEARS AGO - MAN HAS THE FRANKLIN MARKET CHANGED (Over $7,100 in 11/02!)

Bushmaster8 - I noticed that the Price Guide lists the 50(d) for exactly $2,500 in MS66 (no FBL). Perhaps there is a misunderstanding with PCGS thinking you paid over guide for the coin? Just a thought.

Wondercoin

braddick · September 20, 2005 8:36AM

Unless the coin is really bad I'd take the $2,000. and keep the coin. It sounds like an awful MS66 but would be nice for a 65?

RBinTex · September 20, 2005 8:44AM

What A Shock

Amazing that no one knows EXACTLY what the policy is. I guess it's whatever they can get away with on a case by case basis.

You most CERTAINLY are not ASSURED of getting market value for a similarly (correctly) graded unimparied peice.

tlhoy · September 20, 2005 8:46AM

You bought it for $2500 and PCGS is offering you $2500 for it.
Sounds fair to me.

PCGS does not owe you the $375 juice that you voluntarily paid.

dlimb2 · September 20, 2005 8:48AM

Choice # 2 puts you ahead of what you paid...take it and sell the coin and find another.

PerryHall · September 20, 2005 8:53AM

<< 
PCGS does not owe you the $375 juice that you voluntarily paid. >>

I never knew the juice was voluntary. You learn something new every day.

STEWARTBLAYNUMIS · September 20, 2005 9:11AM

Bushmaster8 - Try buying an NGC coin in a Heritage Auction and telling NGC that the coin is overgraded.

You bid on "modern crap" sight unseen.You were hoping that you didn't win the coin.Perhaps you thought you got away cheap and were going to make a profit ? How much did you spend on grading fees with PCGS this year ?Anyway you cut it PCGS is losing money on you.Take the $2,000 and be grateful.

Stewart

tlhoy · September 20, 2005 9:14AM

<< 

<< 
PCGS does not owe you the $375 juice that you voluntarily paid. >>

I never knew the juice was voluntary. You learn something new every day. >>

Yes the "juice" is voluntary.
He could have bought it on eBay or from a coin dealer and avoided the "juice".

Instead he CHOSE to pay the "juice" by bidding on an Heritage auction.

TomB · September 20, 2005 9:22AM

Actually, Stewart, NGC has a similar guarantee to PCGS, though I have never taken either service up on it.

As for this instance, if you took six months to pay then it works out to $62.50 per month over the course of the payment plan in order to be rid of the coin and perhaps have learned something. That doesn't seem too bad for a correspondance course. Alternatively, keep the coin and the $2,000 and hope that you can either recoup the investment in the coin or attempt to cross it to NGC where you may get an upgrade (or may not) and might keep the designation (or might not) and may then be able to market the NGC graded coin.

skerke · September 20, 2005 12:31PM

sell it on ebay market it as a 3,750 coin ..as per pcgs and list it for 3000.00

JustGotRipped · September 20, 2005 12:42PM

I doubt I'll ever be able to afford to spend $2800 on a coin, so it's tough for me to say. but their offer's seem fair to me. I would say they have stood behind the coin. I would take the $2500 and be glad I didnt lose my arse. It's kind of like gambling ina way. If you were stuck $2800 in vegas and won $2500 on your way out, you would be thrilled. Buying a coin that expensive based on an auction picture seems the same as gambling to me.

coinlieutenant · September 20, 2005 1:05PM

Bushmaster,

I am similar to GregHansen in that I feel for you, but I a surprised that you bid on such a coin sight unseen. If you are going to bid in such a way...place a bluesheet (or a little lower) bid. This is certainly going to be a lesson that you never forget and I hope that it doesnt turn you away from the hobby in general. As a dealer, dont buy anything sight unseen unless it is a no brainer flip coin that you can sell for the plastic. Putting on my collector hat, NEVER buy a coin sight unseen...and I mean absolutely NEVER for a coin going into your collection.

There is a tremendous amount of junk in every type of plastic out there...even if it is properly graded. Properly graded stuff 90% of the time is unacceptable IMO if you want to have a nice coin. Selectiveness is your friend in this hobby. Technical grade is not going to help you sell a coin that is common....and you will still most likely lose money on it when you go to sell.

Get someone to look at your coins that you are interested in...or develop a great relationship with a good dealer that will send you nice stuff when they get it in. That is the way to build a good collection. Most dealers will always sell a nice coin to a collector over someone else...even at a small discount if you have a good relationship. You know why? Wait til this market goes south, those same true collectors and numismatists will be the ones that are still actively buying from those same dealers when all the "investor/collectors" have gone the way of the dodo.

Do yourself a favor and keep the coin and take the 2000$...you have the same exact coin that you paid for and 2000$ in your pocket to buy someone else. AND, that coin will always be a reminder when the temptation to buy sight unseen arises again.

V.r,
John

tradedollarnut · September 20, 2005 1:06PM

good advice above.

wayneherndon · September 20, 2005 1:21PM

Take the $2000 and resubmit the coin for an upgrade.

morgannut2 · September 20, 2005 1:39PM

It must be an awfully nice MS-65, PQ and worth more than the regular 65. Take the $2000, crack it out of the PCGS holder, list the PCGS paper label in your Registry, submit it to NGC a few times, get a 66, sell on Ebay.

BASEagle · September 20, 2005 9:19PM

<< It's not like I am a big-time dealer (or even a weenie dealer) that can just write off the $375 difference or make it up in some other way. >>

It's obvious you were in over your head at that price level.

Look at it as tuition in the School of Numismatics.

Having said that: don't give up.

1. Show them your invoice.
2. Show them their very own price guide.
3. Go to the Heritage auction archives and pull some other sales for the same grade (if it supports your case).
4. Show them this thread and remind them that many collectors/PCGS customers are watching to see how you are treated.
5. Find some dealer ads for the same coin.
6. Collect coins you can afford from now on.

Mike

Coinhusker1 · September 20, 2005 10:26PM

<< 

<< I was under the impression that PCGS would offer to reimburse me the entire $2875 that I paid. >>

Whether you paid $10,000 for the coin or received it free as a gift should have no relevance. PCGS shows the value of this coin at $3,750 on their own website. In reference to their own price guides, PCGS states "The PCGS Price Guide is a guide to assist the coin buying public in determining values for all significant United States rare coins."

They further state "The prices listed in the PCGS Price Guide are the average dealer asking prices for properly graded United States coins. The prices are compiled from various sources including dealer ads in trade papers, dealer fixed price lists, significant auctions, and activity at major coin shows. Prices for the most actively traded coins are updated daily. Other issues are updated as needed. All prices are reviewed at least once a month."

IMO, Any offer less than $3,750 is an admission that their price guides are a scam which are intended to defraud collectors. >>

Based on this description, it appears the PCGS price guide is intended to be a RETAIL guide. Retail value is typically in excess of fair market value.

As another poster suggested, look up recent auction closing prices (i.e. Teletrade, Heritage), and if those prices support your case, use them, otherwise you are stuck with the offer from PCGS.

bushmaster8 · September 21, 2005 1:32AM

<< Consider yourself lucky for getting out of a Heritage trap coin with minimal damage. >>

Good point RYK!

<< ...FMV... They have to do it that way since coins are sometimes hammered down at far more than they are realistically worth.

Russ, NCNE >>

Another good point! If they used the hammer price, it would lead to a lot of fraud.

ie.- Two crooked bidders spot an obviously overgraded coin in an auction, they agree to run up the bids to an unrealistic level, then get it downgraded and split the profit.

<< .. If you can't afford to take a 15-20% loss on a coin when you make a mistake in judgment; then you shouldn't be buying that level of coins. >>

It's not that I can't afford it, it's just that I have seen numerous examples, including many posted on these forums, where the submitter was refunded the full cost of the coin. How about the 1963 1c PR70 debacle?

<< Unless the coin is really bad I'd take the $2,000. and keep the coin. It sounds like an awful MS66 but would be nice for a 65? >>

Yes, it will be a very nice 65! I believe that the reason the coin received a 66 grade originally is becuase of luster. It has hands down the best luster I have ever seen on any Denver minted Franklin!

<< ... You bid on "modern crap" sight unseen.You were hoping that you didn't win the coin...Stewart >>

That's simply not true. My Franklin Set is number 5 ranked in the All Time Best for non-FBL Franklins. But I

have carefully selected each coin over the years so that my set is not just high in numerical grade but

has high end coins for the most part. I welcomed the opportunity to add a heavily weighted white MS66

to my set, provided it was properly graded. This one was, obviously not! And though you might view

Franklins as "Modern Crap", I do not. I can assure you that I love my Frankies just as much as you love

your Beardies Stewart!

foodude · September 21, 2005 2:20AM

That's simply not true. My Franklin Set is number 5 ranked in the All Time Best for non-FBL Franklins. But I

have carefully selected each coin over the years so that my set is not just high in numerical grade but

has high end coins for the most part. I welcomed the opportunity to add a heavily weighted white MS66

to my set, provided it was properly graded. This one was, obviously not! And though you might view

Franklins as "Modern Crap", I do not. I can assure you that I love my Frankies just as much as you love

your Beardies Stewart!

I've met Bushmaster8 several times. He does have a passion and eye for nice Franklins (i.e., in person he can grade the coins

).

Russ · September 21, 2005 10:11AM

<< How about the 1963 1c PR70 debacle? >>

Bad example. That was hush money.

Russ, NCNE

SUPERCARCOINS · September 24, 2005 3:48AM

.what a crock of sheet-

PCGS pays for their mistakes @ full purchase price (excluding juice) or they loose face /buisness.

Their price guide is a joke , made up by dealers that sell the coins their pricing.

For every 1 coin that is undervalued , their are 5 that are grossly overvalued .

All price guides ; greysheet,blue sheet, Coin Prices, Trends, etc are all diffrent.......

PCGS
MUST reimberse the full price paid on a downgraded coin ; there is no room for disagreement-the issue is moot

bushmaster8 · September 24, 2005 5:09AM

Update

There has been an interesting development!

Right in the middle of negotiation (no settlement has been reached yet), the PCGS Price Guide for MS66 FBL 1950-D Franklin has been dropped from $3750 (when this thread began 9/20/05) to $3000.

Quite a coincidence for sure!!

Unhappy with Downgrade Review buyout offer...

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