Passing Grades

Passing Grades

If William Shakespeare was alive today, his most famous prose might read, “To grade or not to grade.  That is the question.”

It’s a question you’ve likely already asked yourself or will soon.  That is, should I submit some of my collectibles to be graded?  Further, does grading make sense economically?  Which items in my collection should be graded?  Finally, how do I get started?

Alan Hager of Accugrade launched the world of modern grading back in 1984, featuring a ten-point grading system that evaluated the authenticity and quality of trading cards and countered the subjectivity of assessing an item’s quality or grade.  Padding quality claims (puffery) or underestimating quality (called “poor mouthing”) often resulted in dealers taking advantage of collectors.  Hager’s venture set out to provide buyers and collectors with a standardized assessment expressed by the grade on Hager’s scale, which could be shared between buyer and seller.

PCGS joined in the fray by launching the grading of numismatic coins in 1986.  In the years that followed, hundreds of grading companies entered the collecting world, rating everything from comic books to ticket stubs, and even autographs.

I, myself, was a late adopter, hesitant for quite some time to have items in my collection graded.  Over time, I learned the “ins” and “outs” of grading and finally understood when it made sense to submit an item for grading, and when it didn’t.  Whether you’re a long-time devotee of grading or are considering whether to enter the graded collectibles world for the first time, here are some “must know” facts about grading that can help you maximize your investment in grading.

Not everything must be graded to be valued, sought-after and enjoyed.  Some categories of collectibles are not well suited for grading, as an agreed upon standard isn’t feasible.   For instance, how can works of art be graded – is Van Gogh or Monet a higher quality artist?  What constitutes a high-grade game used jersey?  How about a game used hockey puck, i.e., do lots of scuff marks and gouges define a high grade, or pristine condition that may signify little, if any game use?

At its core, grading is still somewhat subjective.  Collectible grades are assigned by human beings, albeit experienced evaluators in most cases.  Since human participation defines the practice of grading, it is not 100% accurate in every case.

Grading can be helpful when buying or selling.  For sellers, a graded item may improve your sales prospects by attracting more discerning collectors (though it also can limit the market to just those who believe in grading).  For buyers, purchasing a graded item can provide some assurance regarding the quality of what you are buying.  If you don’t know the seller very well, grading can be your security blanket.

When you submit an item for grading, don’t be shocked if the ultimate grading score assigned to your collectible is lower than expected.  You are emotionally and economically invested in your specific collectible, which will bias your assessment of the grade.  But the professional grader has no skin in the game – that is, they get paid regardless of the grade, and there is no discernible incentive to grade higher or lower.  So, they will tend to have a more discerning, objective eye.

Grading is not always a sound investment leading to a superior economic outcome.  As a collector or seller, grading an item may not lead to higher marketplace value.  Always check to see whether your item will be more valuable even with a grade on the lower end of the scale.  If so, then grading is a sound investment.  If grading only makes sense with a high grade, don’t take the plunge, as you are likely to get burned…if the item earns a low grade.  For buyers, you will often pay a premium for a graded collectible, moving some items out of your price range.  When finding an ungraded collectible that you assess as high quality, it could be less expensive and may appreciate more over time than a graded version.

Because there are hundreds of grading companies, don’t be fooled into believing that only one company can provide the quality, reliable grading brand mark you are seeking.  In most categories, there are usually at least two, and up to five or more companies that are prized by the collector marketplace.  Don’t get fooled by the marketing pitch into believing otherwise.

The bottom line?  Depending on the category, grading may well be worth considering.  But make sure to do your homework, have realistic expectations and make a sound, reasoned judgment.  Don’t act in haste, clouded by emotion.  Sometimes, grading is the right choice, and sometimes…it’s not.

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