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An explanation of why it's in the best interest of TPGs not to charge for an opinion when they decid
IGWT
Posts: 4,975 ✭
I'd imagine that it's pretty frustrating to pay a grading fee only to have a coin no-grade and returned in a bodybag. It's even more frustrating, I suppose, when the reason for the bodybag is unclear or just plain wrong based on the submitter's first-hand knowledge of the history of a coin. But the most aggravating experience must occur in the situation where the submitter sells the no-grade coin priced to reflect the TPG's opinion, only to later see the same coin holdered and selling for multiples more. The original owner has lost a significant amount of money in reliance on the TPGs opinion that the coin is environmentally damaged, artificially colored, or whatever the case might be.
It's no answer to say that "grading is subjective." People pay for and rely on the opinions of experts all the time. Let's say someone hires an expert in early American furniture to authenticate and to appraise an antique in preparation for sale. The expert opines that the piece is an early reproduction and has a current market value of $2,000. Based on that opinion, the owner sells the piece to a dealer for $1,500. The dealer then places the piece in auction, and it fetches $100,000, because it came from the shop of a famous Pennsylvania cabinetmaker circa 1800. The so-called expert, who accepted payment in exchange for his evaluation, is on the hook for being wrong.
The antiques appraiser could (and should) decline to offer an opinion on the piece if he doesn't have a reasonable degree of confidence in his evaluation. But, of course, declining to give an opinion means that he can't charge for what he doesn't provide. The TPGs justify charging for a no-grade by saying that the submitter is paying for an opinion, even if that opinion results in a bodybag. Fair enough; but the TPG should have to live with that opinion no less than it has to live with an opinion that results in a grade. If it doesn't want to live with the opinion, it should decline to offer one, which requires refunding the submitter's money.
There's no doubt that an expert can be wrong in his opinion and still avoid liability so long as he acts reasonably. Different experts frequently reach different conclusions, and both can be reasonable. BUT, while different experts might reasonably disagree, it's not reasonable for the same expert to be reaching different conclusions based on the same set of facts. What if you had been the owner of the antique who had sold in reliance on the opinion that it was a reproduction, only to find out that the same expert declared the piece authentic for the next owner a couple of days later? Would you shrug it off as "part of the game"? Of course not; but, you'd have no gripe if the expert had neither taken your money nor provided an opinion.
It's no answer to say that "grading is subjective." People pay for and rely on the opinions of experts all the time. Let's say someone hires an expert in early American furniture to authenticate and to appraise an antique in preparation for sale. The expert opines that the piece is an early reproduction and has a current market value of $2,000. Based on that opinion, the owner sells the piece to a dealer for $1,500. The dealer then places the piece in auction, and it fetches $100,000, because it came from the shop of a famous Pennsylvania cabinetmaker circa 1800. The so-called expert, who accepted payment in exchange for his evaluation, is on the hook for being wrong.
The antiques appraiser could (and should) decline to offer an opinion on the piece if he doesn't have a reasonable degree of confidence in his evaluation. But, of course, declining to give an opinion means that he can't charge for what he doesn't provide. The TPGs justify charging for a no-grade by saying that the submitter is paying for an opinion, even if that opinion results in a bodybag. Fair enough; but the TPG should have to live with that opinion no less than it has to live with an opinion that results in a grade. If it doesn't want to live with the opinion, it should decline to offer one, which requires refunding the submitter's money.
There's no doubt that an expert can be wrong in his opinion and still avoid liability so long as he acts reasonably. Different experts frequently reach different conclusions, and both can be reasonable. BUT, while different experts might reasonably disagree, it's not reasonable for the same expert to be reaching different conclusions based on the same set of facts. What if you had been the owner of the antique who had sold in reliance on the opinion that it was a reproduction, only to find out that the same expert declared the piece authentic for the next owner a couple of days later? Would you shrug it off as "part of the game"? Of course not; but, you'd have no gripe if the expert had neither taken your money nor provided an opinion.
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That is an excellent point made with a very a relevant analogy.
<< <i>It's no answer to say that "grading is subjective." >>
well, to expand on that answer, not only is grading subjective, but the OPINION as to whether a particular coin is a commodity or not is a opinion.
the purpose of slabing is to turn coins in to commodities, & plastic co's (at least allegedly) have standards that a coin must meet before it's a commodity. those standards are subjective.
ie, you paid for a opinion, & you got what you paid for. if the coin's in a body bag, then the opinion is: the coin is not worthy of becoming a commodity.
K S
No. And I have no problem with charging for a bodybag so long as the TPG stands behind that opinion. If they don't want to take on the liability for a no-grade opinion, I suppose they could charge a processing fee of some sort, but it certainly should be separate from and cost less than a professional opinion.
I think that the process of grading and certifying coins needs a refreshing new approach. I do not have the answer, but with all of the challenges and issues the incumbent TPGs face, I think that there must be a better way, one that is substantially different from how things have been done for the past 22 years.
The problem with that is that a more rational approach would probably put the innovator at a competitive disadvantage. The services would need to work in concert for this to work.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Most of the arguments I've seen for this are to provide customers with benefits, but not necessarily the TPG. For the TPG, it may be a negative to offer this service. The title of this thread is "An explanation of why it's in the best interest of TPGs not to charge for an opinion when they decide to bodybag a coin."; however, I have not read why it's in the TPG's best interest.
Now, if large numbers of customers started moving their submissions to TPGs that did refund money for BBs or slabbed them as problem coins, then things may change. But there are TPGs that offer this service, and most people still prefer TPGs that do not provide this service.
Of course I know enough to know that just 'cause it got bb'd the first time thru doesn't mean its fate is permanently sealed. Inconsistent? Absolutely.
Charging for an opinion of a SLABBED COIN that visited PCGS (and was bb'd or DNC'd under identical circumstances - i.e. same minimum) earlier? Disgraceful and wholly without justification. A mere check of a database would be all that would be needed but of course that'll never happen. They'd be ecstatic if the same coin got submitted 100 times!
What IS even more of a disgrace is NOT telling people the PCGS estimated grade of coins that don't cross!
<< <i>If you make an offer to buy a house and the appraisal comes back less than your offer the appraiser still gets paid. Should you get your application fee and or appraisal fee returned? >>
Close, but a more complete example would be if the appraiser also provided the title insurance -- and they still received the fee for the title insurance even if the deal fell through because of the low appraisal (or if the inspection revealed show-stopping problems). That "title insurance" would be analogous to the grade and authenticity guarantee the TPGs provide with the fee they charge.
<< <i>The Appraiser furnishes Title Insurance?
No, they don't, but to make the appraiser analogy more accurate with respect to what a TPG does, you'd have to make that assumption. Because the TPG not only "appraises" the coin (by valuing the coin with a grade) and provides the "inspection" (to see if the coin has problems that prevent slabbing), but also a form of "insurance" on the property being evaluated (in terms of guarantees on grade and authenticity).
If you don't include the insurance aspect of the TPG's services, the appraiser analogy is incomplete.
I agree with what Dork Karl said, but IGWT makes a very interesting observation/question on the process. One that I think should be discussed more.
Lope
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Of course, not. The application process has associated costs, and these are partly offset by the fees. Besides, the university is (arguably) in the business of educating students, not processing applications, and I doubt that this application process is a profit center for them. The grading co is in the business of gradying, slabbing, and guaranteeing coins. When you get a BB, you pay for all three and get only one.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
<< <i>If I apply to a certain college and my application doesn't meet the minimum requirements for acceptance, do I get my application fee back? >>
First an appraisal, now this. We have a lot incomplete and partial analogies here.
The fact is that many costs are built into the cost of submission. Here are a few, and not a complete list:
1. Cost of pushing a coin through the pipeline (logging receipt, sending from one department to another, shipping back to sender) -- general "overhead"
2. Cost of insuring coins while in the TPG's possession
3. Cost of "inspection" (determining whether or not the coin is authentic and/or "market acceptable" for slabbing)
4. Cost of "appraisal" (assigning a value for the property through an assigned grade)
5. Cost of encapsulation
6. Cost of providing "insurance policy" on encapsulated coin (through guarantee on grade and authenticity).
I believe ALL coins submitted incur costs 1, 2 and 3...and all should pay those costs, BB or not.
However, only slabbed and acceptable coins incur costs 4, 5 and 6 yet all submissions pay those costs. You could argue that items 3 and 4 could be collapsed into one, and even if so, items 5 and 6 are clearly not provided with a BB'd submission.
For those submitting BB'd coins this is adding insult to injury; you pay for slabbing and a guarantee that you never received. So what should the TPG's do in terms of the services paid for but not delivered? How about a $5 coupon to apply against the cost of future service on each coin that gets BB'd? That might approximate the value of the slabbing and the guarantee.
That would be a complete cop-out. We misuse the word "subjective" when we use it to explain away different grades assigned to the same coin by different people or even to excuse our own inconsistency. Those variations are attributable to many factors, e.g., imprecise standards, changing standards, an imperfect understanding of standards, or even different standards altogether. But none of those reasons are truly "subjective" in nature.
Here's an example of a subjective assessment: "I feel cold in this room." Please explain to me how my judgment can possibly be wrong. I can't be wrong (even if you feel hot in the same room). No one is in a position to contradict me, because the assessment is about me as the subject. The statement is unique to me and peculiar to my mind; it's subjective. Let's say we agree that "hot" means 80 to 90 degrees, and the temperature of the room is 85 degrees. I can still say that "I feel cold" and be correct. But I can't correctly say that the room is cold just because I feel that way. Similarly, I can't say that a coin is a certain grade just because I feel that way. The grade of a coin is always an objective statement of its condition.
A grade is nothing more than a way to describe the objective reality of a coin's condition (whether in absolute or relative terms). But I wish that grading were subjective. If it were so, all the threads complaining about eBay sellers overgrading raw coins and TPGs making a mistake would disappear from the boards.
For those submitting BB'd coins this is adding insult to injury; you pay for slabbing and a guarantee that you never received. So what should the TPG's do in terms of the services paid for but not delivered? How about a $5 coupon to apply against the cost of future service on each coin that gets BB'd? That might approximate the value of the slabbing and the guarantee.
I think you're looking at the problem backwards, Ziggy. I'm paying principally for an opinion, not a piece of plastic, even though the plastic represents an opinion. And, according to the TPGs, the lack of plastic also represents an opinion for which the submitter has paid. I'm saying only that the TPGs ought to take financial responsibility for their opinions all the way around.
<< <i>
<< <i>It's no answer to say that "grading is subjective." >>
well, to expand on that answer, not only is grading subjective, but the OPINION as to whether a particular coin is a commodity or not is a opinion.
the purpose of slabing is to turn coins in to commodities, & plastic co's (at least allegedly) have standards that a coin must meet before it's a commodity. those standards are subjective.
ie, you paid for a opinion, & you got what you paid for. if the coin's in a body bag, then the opinion is: the coin is not worthy of becoming a commodity.
K S >>
I guess it is if someone else submits it and it gets holdered on a second or 3rd try. Then again medical opinions can vary among experts as well. So who is one to believe?
<< <i>Here's my response to another thread, which probably bears repeating here:
I think that the process of grading and certifying coins needs a refreshing new approach. I do not have the answer, but with all of the challenges and issues the incumbent TPGs face, I think that there must be a better way, one that is substantially different from how things have been done for the past 22 years. >>
Yer two choices would be a man or a machine and a machine is only as good as what a man tells it is good. Personally I'd trust a man's opinion of what is ugly and what is purty before I'd trust the machine's.
<< <i>Here's an example of a subjective assessment: "I feel cold in this room." Please explain to me how my judgment can possibly be wrong. I can't be wrong (even if you feel hot in the same room). No one is in a position to contradict me, because the assessment is about me as the subject. The statement is unique to me and peculiar to my mind; it's subjective. Let's say we agree that "hot" means 80 to 90 degrees, and the temperature of the room is 85 degrees. I can still say that "I feel cold" and be correct. But I can't correctly say that the room is cold just because I feel that way. Similarly, I can't say that a coin is a certain grade just because I feel that way. The grade of a coin is always an objective statement of its condition. >>
totally disagree.
the difference is, if you feel cold, it's personal assessment of a condition that applies to you & you only, & ONLY at that point in time! but if you say "this coin grades ms-63", that is a true statement ONLY as long as that statement applies to you & you only. the instant you involve another person, ie a buyer or a seller, then the statement becomes strictly subjective. w/ the introduction of a additional party, there are multiple opportunites for a opinion to be rendered.
furthermore, from a practical standpoint, to say "i feel cold in this room" is in fact ALSO subjective, because it is true only for an instant in time. five minutes from now, you may not feel cold at all, having adjusted to the room conditions. thus, again, there are multliple opportunites for the opinion to be rendered. this is also why it is perfectly natural, to be expected, & really should be DESIRED that grading changes over time, because it is a truly subjective issue. a coin that grades ms-63 at 1 instant in time could very well grade only ms-62 at another instant in time, & that is perfectly acceptable.
there is simply no rational way an observer should ever believe a grade, as defined as a assessment of a coin's value, could ever be objective.
to summarize, a opinion that involves a single person at a single point in time can be a objective statement of fact. but the moment that multiple opinions come into play, either w/ the introduction of someone else's opinion, or due to the course time progression, the statement becomes SUBJECTIVE.
read up on the heisenberg uncertainty principle. it is actual proof that there is no such thing as a truly "objective" statement of fact.
K S
<< <i>I guess it is if someone else submits it and it gets holdered on a second or 3rd try. Then again medical opinions can vary among experts as well. So who is one to believe? >>
that's when you come around to the single most important rule to enjoying the hobby:
if you like the coin, if you really, really like it, then the price does not matter
(as we all know, a "grade" is really just a "price")
as much as folks would like to disprove this rule, i have yet to find a circumstance where it did'nt hold up.
K S
<< <i>Yer two choices would be a man or a machine and a machine is only as good as what a man tells it is good. Personally I'd trust a man's opinion of what is ugly and what is purty before I'd trust the machine's. >>
While I'd sooner trust the machine to provide a technical grade, it will always be up to a set of human eyes to determine the quality, eye appeal and value within the specified technical grade. At least in my lifetime, anyway.
<< <i>
<< <i>Yer two choices would be a man or a machine and a machine is only as good as what a man tells it is good. Personally I'd trust a man's opinion of what is ugly and what is purty before I'd trust the machine's. >>
While I'd sooner trust the machine to provide a technical grade, it will always be up to a set of human eyes to determine the quality, eye appeal and value within the specified technical grade. At least in my lifetime, anyway. >>
The technical grade too will only be as good as the data/decisions given to the machine to help it assess what the technical grade is. Your idea of what the machine calls a 63 may well be different from someone else's.
<< <i>The technical grade too will only be as good as the data/decisions given to the machine to help it assess what the technical grade is. Your idea of what the machine calls a 63 may well be different from someone else's. >>
Agreed. But if you know the machine that assigned the grade, at least you know it's likely to be consistent. And if it's consistent, one can easily apply their own value adjustment to the computer grade to determine what a coin is worth to them technically, and then apply subjective human factors such as color, eye appeal, et cetera.
(as we all know, a "grade" is really just a "price")
as much as folks would like to disprove this rule, i have yet to find a circumstance where it did'nt hold up.
I grade the Smithsonian's 1849 $20 PR63.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>
<< <i>If you make an offer to buy a house and the appraisal comes back less than your offer the appraiser still gets paid. Should you get your application fee and or appraisal fee returned? >>
Close, but a more complete example would be if the appraiser also provided the title insurance -- and they still received the fee for the title insurance even if the deal fell through because of the low appraisal (or if the inspection revealed show-stopping problems). That "title insurance" would be analogous to the grade and authenticity guarantee the TPGs provide with the fee they charge. >>
Reread my post again not only did I say appraisal fee I said application fee. Some brokers own title companies and the fee is used pay costs like title insurance, but in this state the seller pays the bulk of title insurance fees anyway with the buyer paying a nominal amount. For example the sellers fee might be $680 and the lenders fee (usually paid by the buyer $100). In addition the application fee/earnest money deposit pays for any inspections, which are to insure that the mechanics, roof etc work.
Now any more quibbling with my post ziggy??
<< <i>I think this is where PCGS need to at least slab problem coins with the description of the problem. Even if it is a different label. This way there is a record of what PCGS originally thought of the coin. >>
Many of us have been saying this for years, they just don't want to do it for whatever reason. In fact its one of the reasons I quit submitting.
K
My 1866 Philly Mint Set
<< <i>
<< <i>The technical grade too will only be as good as the data/decisions given to the machine to help it assess what the technical grade is. Your idea of what the machine calls a 63 may well be different from someone else's. >>
Agreed. But if you know the machine that assigned the grade, at least you know it's likely to be consistent. And if it's consistent, one can easily apply their own value adjustment to the computer grade to determine what a coin is worth to them technically, and then apply subjective human factors such as color, eye appeal, et cetera. >>
What you say could just as easily apply to most third party graded coins. So where do you feel that the TPGs are coming up short? In assiging a technical grade or in the eye appeal, color or other factors?