A lot of PCGS customers mention online how they have no worries b/c of the PCGS guarantee.
So let's delve in and see what that guarantee says. All info below is a summary of the PCGS guarantee located at:
https://www.pcgs.com/guaranteeLast accessed on November 11, 2024
1. The very first line of wording is crafted to imply that PCGS grades are guaranteed.but the following wording that explains the first statement only says PCGS guarantees to use the methods they say they will to grade a coin
(no kidding! Read it!).
2. The guarantee then says If someone thinks their coin is over graded, the customer can send it back in and the following options will apply:
But hold it...how many people desire a lower grade on their coin's slab to lessen its market value? a. Option 1: PCGS will offer to buy the coin from the owner at the "current market value." This sounds great.
But wait, there's more! PCGS, later in the guarantee, when people get bored with reading all of the market-ease being used, defines their idea of market value as:
"dealer replacement cost" and to be
determined by PCGS.
- to this I say it seems a bit of a gray area to use the term "current market value" throughout the text before saying there is a difference in what normal people think of when they hear the term "market value," and PCGS' own re-defining of the term.
- in Option 1 PCGS pays the owner a lesser value than what the customer would normally think of as current market value. PCGS could them profit by selling the slab as is at the higher market value (disclaimer: I do not know what they do with these coins...
if anyone ever really sends in coins to be devalued anyway!).
b. Option 2: PCGS will pay the owner the difference between the initial higher grade and the new lower grade to be assigned while the owner keeps the coin. But remember the money PCGS would pay is what PCGS gets to say is the dealer replacement value, and PCGS does not mention they use any references to come up with this number.
In other words, they can pay anything they want to, but b/c they go to all the trouble to make this distinction, the amount they pay sure won't be what people normally think of when they hear the term "current market value." - In the case of option 2, the owner could have just put the coin on
ebay; gotten a higher price because of the grade; and saved money, time and hassle!
IF someone would actually send a coin in to have a lesser grade put on the slab:
1. PCGS can give them as little money as they want for it, end up with the coin, and be able to sell it themselves at the current higher grade on the slab (profiting from
actual market value).
or
2. PCGS can pay as little as they want to the owner, and the owner keeps the coin. But again, how many customers send in coins to be devalued with a lower grade?
Let's put in other reality check here. Most people use the grading companies b/c those people feel they cannot determine the grade of the coin themselves. So when the customer sees the grade on the label, why would that customer question if the grade should be lower? Relatively few people do!
Feel like paying for a trip to California?
Then there is the inclusion in the PCGS guarantee of the following:
Legal action can only be taken to make them honor (devaluing your coin/slab) in Orange County, CA. OK, so let's add plane fair and traveling expense to the issue if we get to the point of a real complaint against the company shall we?
Now to nullify the entire "guarantee" with one easy included statement:And as if all of the above is not enough to give a reality check on the "guarantee," One of the final statements of the guarantee says that this guarantee only applies if the coin is more than two grade points overgraded.
But hold it! Since there is absolutely no legitimate and measurable way used to grade coins, then how can anyone prove the grade is two points off?
In other words, the entire "guarantee" is technically nullified by this statement! Since no one can prove any coin's exact grade, and the guarantee can only be used if the grade is off by two points, then the entire page of clever wording dissolves into nothing but a good PR marketing gesture!
IMO, if I were to summarize the "guarantee" it would be something like the following:
1. We grade coins in the manner we say we do...guaranteed!
2. If you can show
* the grade on your slab is two points higher than it should be, and you desire the value of your slabbed coin to be less, we will either pay you anything we wish and you can keep the coin, or we will pay you anything we want and WE keep the coin (which we can sell at the higher grade value).
3. If you want to legally contest the issue you are having, you have to travel to our county in California to do so.
* We are not worried about anyone trying to cash in on the guarantee though since there is no verifiable way to tell a coin's real grade. So trying to prove it is two points off is never going to happen.
End note:
It seems maybe PCGS might have seen this information posted in other threads on this forum and the other forum I am on. Reviewing the link included above, I see they now have bold print as to how they redefine the terms "market value" and "dealer replacement value" to suit their own needs. These definitions are no longer hidden down further on the age. A step in the right direction IMO, but still falling short of just saying PCGS gets to say what they will pay, and that value has nothing to do with what people generally think of when they hear the term "market value."
One final point so as not to end on a negative. In PCGS' favor, the one good point of the guarantee is that if they grade a fake coin as being real, then PCGS will be fair in compensation.
Note if someone enjoys collecting slabbed coins, then I say good for them! They are enjoying their hobby the way they like to. Hobbies are about FUN.
I post things like this b/c there are way too many people out there who just go with the flow and unaware they are not getting what they think they are paying for. After all, who wants to put research (work) into a hobby since hobbies are a way to escape daily pressures?
But way too many people lose money to this (and other) grading companies b/c of marketing practices such as this alleged guarantee. The statement I see all the time from collectors is that PCGS guarantees their grades. Those people need to read the above!
Also see the thread on the "PCGS Grading Challenge" video that fools a lot of people as well:
http://goccf.com/t/471786
Posted 01/08/2025 10:20 pm
