As coin collecting gained momentum during the early 1900s, the condition of a coin, along with its rarity, essentially determined its value as is the case today. And over the years, coin grading evolved to a system of finer and finer grade distinctions. The problem was the often subjective assignment of "grades" by different coin dealers.
When the rare coin market was limited to a small number of numismatists trading with each other, three broad definitions were enough to determine grade: "Good" – a coin with most of the detail intact; "Fine" – a coin with clear detail and some luster on its surfaces; and "Uncirculated" – a coin which had never been in general circulation and therefore retained its Mint State condition.
As the market grew, collectors realized that some "fine" coins were finer than others. Even some uncirculated coins rose above the rest in detail, luster, and general appearance. Soon terms such as "Very Fine" and "Extra Fine" began to emerge, as collectors sought to further define the condition of their coins and increase their value. In 1948, Dr. William Sheldon, a renowned numismatist, developed the Sheldon Scale, assigning grades from "1" through "70" to coins on the theory that a "70" would be worth 70 times as much as a "1."
Although coin collectors agreed on the scale, they could not agree on the standard, and assigning a Sheldon Scale grade to any given coin was still a matter of subjective opinion.
The Need for a Universal Standard
In 1985, a small group of the nation's leading rare coin experts recognized that for the rare coin industry to realize its potential, several serious problems needed to be addressed.
Market participants soon became aware that one of the fundamental factors in determining rare coin values is the physical condition, or grade, of the coin. They learned that a coin graded Mint State 65, for example, may have market value many times greater than the same coin graded Mint State 64, even though the difference in an MS65 coin and an MS64 coin may be virtually undetectable to the untrained eye. A coin sold by one dealer as an MS65 could be sold by another dealer as an MS64 (or less). In some cases a coin buyer could be victimized by product misrepresentation. In other cases, he was caught in the middle of a dilemma of wide-ranging definitions due to the absence of a true standard. In other words, they were simply caught in the middle of divergent definitions due to the absence of a universal standard.
The PCGS Solution
Over the course of many months of meetings, the blueprint for the Professional Coin Grading Service evolved.
The advent of the third-party appraisal of a coin's physical condition, backed by a guarantee, and a national network of reputable coin dealers could provide an extremely reliable form of protection for rare coin collectors. PCGS would create a climate in which consumers could participate in the coin market with greater confidence.
The PCGS grading concept would revolutionize the rare coin industry.
The Highest Standards for Your Coins
The Professional Coin Grading Service began serving the coin-buying public on February 3, 1986.
PCGS is responsible for dramatic improvements throughout the rare coin industry which have forever changed the way rare coins are bought and sold. In addition to standardized grading, PCGS offered a cash-back grading guarantee, problem-free coins, safe long-term storage, and sight-unseen trading. Together, these elements have created unprecedented public support for the rare coin industry.
Since 1986, PCGS has been accepted as the industry standard for the third-party certification of rare coins.
Encapsulation and Long-Term Storage
PCGS pioneered the tamper-evident, sonically-sealed, high-security capsule as a method of reinforcing its Guarantee of Grade & Authenticity. In addition, the unique certification number permanently sealed inside each coin capsule may be utilized by the coin's owner as a reliable means of identification after the PCGS coin re-enters the marketplace.
Equally important, PCGS's durable plastic holder provides optimum protection for safe, long-term storage of rare coins.
PCGS Guarantee of Grade & Authenticity
Customer Bill of Rights
The Guarantee of Grade & Authenticity is fundamental to PCGS's concept of third-party grading. The cash-back policy ensures the accuracy of the grade assigned to any PCGS coin as long as it remains in its tamper-evident holder. If a coin is believed to be improperly graded, and a discrepancy is found when resubmitted through PCGS's Downgrade Resubmission service, the guarantee entitles the coin's owner to options designed for his protection.
All coins encapsulated by PCGS are guaranteed to be Genuine. PCGS will now encapsulate some problem coins as “Genuine” without grading them. These coins are labeled Genuine not Gradable.” For a complete list of PCGS grades, see our Grading Standards page. Further information on PCGS Genuine services may be found in the Frequently Asked Questions (FAQs).
Behind the Scenes at PCGS
PCGS graders are selected from an elite group of world-class numismatic experts. Each grader is experienced not only in the PCGS grading standards, but also in the proper handling of all numismatic items.
During grading, each coin is carefully and independently examined. PCGS utilizes a grading scale based on published standards and an extensive grading set of coins.
Once the grading process is complete, the coin is sonically sealed inside a clear, tamper-evident coin capsule that protects the coin and allows optimal viewing of both the obverse and reverse.
Finally, it is returned to the grading room for verification by another expert. Only after this final verification is the coin returned to the marketplace with its guaranteed PCGS grade.
Each coin received by PCGS is carefully checked against its incoming submission invoice for accuracy. A unique certification number is then assigned from the PCGS computer inventory system. This important process enables PCGS to methodically track coins through every step of the grading process. Numerical labeling combined with generic packaging also assures anonymity as each coin enters the grading room.
The PCGS grading room is home to many of the world's most knowledgeable and experienced numismatists. Each expert works independently in a controlled environment which provides optimum conditions for studying the characteristics and physical condition of each coin. A series of graders enters independent determinations in a computer database until a consensus is reached and the final grade assigned. In addition to their high level of training, graders rely on our comprehensive grading sets of U.S. and international coins to supplement PCGS's grading standard.
Once graded, each coin is sonically sealed inside its protective, tamper-evident PCGS NumisCap holder. A special label within the holder indicates the coin's certification number, grade, date, denomination, unique bar code and pedigree if applicable.
As a final quality control check, all PCGS-graded coins go back to the grading room for review by a "verifying" grader. The verifier carefully examines each coin through its tamper-evident holder to ensure the integrity of the sealed capsule, and to check the accuracy of all certification information.
From the moment your coins arrive at our facilities until they are returned to you, PCGS takes great care to ensure the safety of your valuables. In addition to being covered by our liability insurance while on our premises, your coins are further protected by our highly- trained security personnel and state-of-the-art security systems. Each of these components reinforces our commitment to protecting your coins throughout the grading process.
Today, foreign coins offer a "world" of options for investors and collectors as the rare coin marketplace grows to global proportions.
PCGS certifies coins from over 100 countries including United States, Japan, Germany, New Zealand, Poland, Switzerland, Great Britain, France, Italy, China, Spain, Greece, Mexico, Russia, Canada, India, Hong Kong, Philippines, Australia, Singapore and African countries. PCGS standardized grading has forever changed the process of buying and selling coins, increasing confidence in buyers and sellers around the world.