By David Schwager for CoinWeek …..
Buy the coin, not the slab.
This is wise guidance, and a prudent collector needs to do more than read the numbers on a holder before deciding whether to buy. At the same time, it is accurate to say that a collector buys both the coin and the slab. In addition to buying the certification service’s reputation and a numeric grade, the coin buyer purchases the holder as a physical object.
Grading service special labels enhance and differentiate that hybrid object, serving a function beyond recording the coin’s authenticity and condition.
“When a coin is encapsulated in an NGC holder,” as Certified Collectibles Group Senior Vice President for Sales and Marketing Max Spiegel puts it, “the NGC holder becomes a critical part of the coin’s presentation. We therefore want to offer the most attractive label and holder options to collectors.”
The last part of this statement speaks to how the variety of choices in grading service labels fits into not only the coin market but also the market for certification. The major grading services compete intensely for our business. Numismatic Guaranty Corporation (NGC) and Professional Coin Grading Service (PCGS) are some of the biggest advertisers in numismatics, while ANACS sends representatives to even minor coin shows to pick up as many submissions as they can. A certifier with a single type of holder and label will lose out to one that offers collectors and dealers a variety of products to meet their needs.
In the early days of certification, that was enough. A single product could meet pent-up demand for third-party grading and presentation was not a priority. When PCGS started in 1986, for example, their holders used crude and sometimes misaligned printing. Contemporary ANACS photo certificates were similarly basic. If the buyer could read the label, how that label looked was unimportant.
Although all grading services gradually refined their products, in the first 10 years of certification each service generally offered its customers a single choice at any given time. The full history of coin certification has yet to be written, with much of the knowledge existing only in the minds of industry insiders, so this discussion may overlook an early example or two.
The First Special Labels
Although going far beyond a special label, the first attempt to provide distinctive certified packaging was the PCGS Regency holder issued from 1992 through 1996. This oversized green holder included a larger label with customized text chosen by the owner. Although prized by slab collectors today, their cost and size made them unpopular at the time; only about 700 were sold during their four-year run.
About the time that the Regency holder ended, grading services began to offer standard holders with special labels. PCGS operations manager Anibal Almieda recalls that PCGS made a commemorative label in 1996 for the 10th anniversary of the American Silver Eagle. But based on the number of holders that appear for sale today, it seems that the market wasn’t ready for this innovation, either.
The First Strike designation for new coins submitted within 30 days of issue also started around the same time. This program met with more acceptance and developed gradually. Although earlier coins remain uncommon, 1999 and newer First Strike labels regularly appear for sale.
NGC, founded in 1987, also began issuing special labels in its 10th year. Research Director David Lange notes: “In my own experience with NGC, which goes back to 1994, we never used special labels before 1997. The first distinctive label I can recall was for the 1997 ANA Convention in New York City.”
Although older than the other two major services, with origins in 1972, ANACS waited the longest before offering non-standard labeling on their holders. According to Vice President of Marketing and Public Relations Paul DeFelice, special labels began in 2005. The first example was probably a First Strike 2005 Silver Eagle, with similar labels offered for American Gold Eagles in the same or the following year.
As certification continued to become a more important part of the coin market, the number and variety of labels grew. NGC and ANACS began offering distinctive packaging for early releases, and all major certifiers began to assign pedigrees to coins based on events, collections, hoards, sets, and discoveries. Coins recovered from shipwrecks, for example, are understandably popular, but tying a raw coin to a wreck could be difficult. Grading certifiers began guaranteeing not only grade and authenticity but also provenance, when they issued shipwreck labels such as those for SS Central America (2002, PCGS), SS Republic (2004, NGC), and El Cazador (2005, ANACS).
Today, the choices are even greater. For example, an eBay search for 2017 High Relief American Liberty $100 gold coin finds nine different labels, with some certifying the coin as an early release, others commemorating the 225th anniversary of the United States Mint, and others bearing the signature of one of the coin’s designers, Thomas Cleveland. Consider the list below a first attempt at a taxonomy of labels:
- Signature – Has the original or replica signature of a noteworthy person connected with the coin, often the coin’s designer or a Mint director. Example: National Baseball Hall of Fame member signatures on 2014 Baseball commemorative holders (PCGS).
- Single grade – Describes the grade with a general adjective instead of a precise numeric grade. Example: Classic US gold graded Brilliant Uncirculated with PCGS Gold Prospector labels sold only by APMEX.
- Event or Show – Describes the coin as certified at or otherwise coming from a coin show or other event. Example: America the Beautiful quarters distributed at launch ceremonies and certified as such by ANACS.
- First day of issue – Like the first day covers once a mainstay of the stamp hobby, these show that the coin went to the grading service on the first day it was sold. Example: ANACS, NGC and PCGS all offered first day labels for the Enhanced Uncirculated Set issued August 1, 2017.
- Early issue – The requirements vary by certifier, but these show that the grading service received the coin soon after its debut. Example: PCGS First Strike labels for coins submitted within 30 days of the issue date.
- Contemporary commemorative – Honors a current event not necessarily related to the enclosed coin. Example: PCGS issued holders labeled “History in Your Hands” for the 2009 and 2017 presidential inaugurations.
- Anniversary commemorative – Describes the anniversary of some past event. Example: US Mint 225th Anniversary labels offered by NGC this year.
- Coin-specific – A label designed for only one-coin series. Example: the PCGS Yosemite label for 2016 National Park commemoratives.
- Art labels – The label has art that relates more generally to the enclosed coin. Example: an image of Alexander the Great on relevant NGC-certified Greek ancients.
- Collection pedigree – Names the collection from which the coin came. Example: PCGS Currency often pedigrees notes, both to famous collections such as the Eric P. Newman Collection and to collectors who provide valuable consignments to auctioneers.
- Shipwreck labels – Ties the coin to a particular underwater find. Examples: The three wrecks mentioned earlier in this article.
- Retro labels – Intentionally resembles one of the grading service’s older holders. Example: PCGS green labels offered starting in 2016 and resembling labels the company used before 1998.
- Set label – Indicates the coin was once part of a government-issued set. Example: PCGS labels for coins removed from Young Collectors packaging.
- Colored inserts or gaskets – The insert or gasket is the soft rubber piece that surrounds the coin inside of the hard plastic shell of the slab. Some certifiers offer these in colors other than the usual white (NGC) or clear (ANACS and PCGS). Example: NGC red, blue and black inserts seen most often with Silver Eagles.
A little thought would come up with more categories or holders that defy categorization – feel free to add them in the comments. For example, when ICG certified some of the 5,000 special finish Sacagawea dollars received by sculptor Glenna Goodacre as payment for her work, this was a one-time event that did not fit neatly into a particular class.
Also, there is often overlap. An Enhanced Uncirculated coin in a label indicating the coin was made in honor of the 225th anniversary of the US Mint and certified on the first day of sales at the 2017 Denver ANA show falls into the anniversary commemorative, first day, show, and set categories.
Why the Market Exists
Grading service special labels of all categories flourish because they meet the needs of buyers, of certifiers, and of the market. A few examples might include:
- Buyers of all types (including coin collectors) are interested in new things
- Special labels differentiate otherwise generic coins
- Special labels give special coins the presentation they deserve
- Varieties in packaging help certifiers compete for business by offering submitters more reasons to certify their coins
Addressing point one, some collectors believe that the world stopped making coins 50 years ago, but much of the coin market is driven by new releases and innovations. World mints make new and different coins because collectors want things they have never seen before. In this way, the coin market resembles any other area, where sellers attract buyers by offering new food, cars, clothing or books, et cetera. A special label can add to that innovation, such as the labels discussed earlier added to the 2017 American Liberty High Relief gold coin or the custom NGC labels for this year’s new Silver Krugerrand.
Or sometimes, the label itself can provide the appeal. As a promotion for new and renewing members in 2016, the American Numismatic Association (ANA) offered NGC-certified Silver Eagles with labels commemorating the ANA’s 125th anniversary. Although not the only factor in the organization’s growth, collectors responded strongly enough to this premium to reverse the long-term decline in ANA membership. The fact that these labels went only to people buying ANA three-year memberships during a limited time window further helped the cause of this encapsulated Silver Eagle.
As for point two, Silver Eagles provide the greatest opportunity for special labels to add to the collector experience. “The new Morgan dollar”, as modern coin writer Eric Jordan and many others describe them, is one of the most popular collector coins. But unless an enthusiast pursues MS70 examples, a set of business strikes can be quickly assembled at a modest cost per coin. Collectors prefer to grow their sets with new purchases rather than resting on their laurels, and buying one coin per year (sometimes more depending on Mint offerings) is not enough to satisfy the desire for fresh acquisitions. If the Silver Eagle set builder adds interesting holders to the collection instead of limiting it to one coin per date, the collection can continue to grow and satisfy its owner. Special labels fill a market need and satisfy collector psychology at a modest cost. One NGC MS69 2017 Silver Eagle is much like another, but one with the Purple Heart label, monster box label, San Francisco cable car label, or gold star label (all issued this year) is better. Even a slab hater who dislikes certification might choose the enhanced holder, given a choice over a plain ASE.
In addition to appealing to Silver Eagle collectors, this coin provides a big and pretty hunk of precious metal that coin enthusiasts of all types appreciate. For these reasons, they are the most popular coins for distinctive labeling, such as the PCGS 2nd Amendment holders or the ANA 125th Anniversary NGC slabs mentioned earlier.
Visiting point three, if special labels can enhance ordinary coins then they are even more effective at giving distinctive coins the presentation they deserve. The shipwreck and famous collection labels mentioned earlier are examples. In addition to the special labels, the NGC SS Republic coins were sold in wooden presentation boxes with a booklet on the wreck and the coin, while the PCGS SS Central America coins came with rich purple and gold labels seen nowhere else. When Lyn Knight Auctions sold the greatest-ever collection of large-size star notes in its Dave Rickey sale of 2015, PCGS Currency put the notes into holders labeled “The Rickey Collection”.
Although a future owner could use a serial number, invoice, auction catalog, or the auctioneer’s website to tie a note to this collection, these methods require research – as well as documentation that can be separated from the note. The special label, by contrast, reveals the pedigree at a glance, permanently tying an important note to an important sale. The special label provides a service to the auctioneer, the consigner, the buyer, and any future buyers.
Point four should be obvious. Special labels also provide value to the certification services, encouraging those services to continue doing what they do and to keep expanding their offerings. Put another way, the labels help graders compete by improving service to their customers. For example, certifiers can:
- Reward their best customers and encourage further submissions by providing deluxe labels that will help the submitters sell their coins
- Give a dealer a distinctive label, meaning the dealer has an exclusive product for its customers
- Use a single-grade label, as defined above, to lower the cost for the certifier, the submitter, and the end customer
Show, First Day, and Early Issue labels also help certifiers compete by making limited-time offers to customers, forcing customers to decide whether to submit or not. Anyone who works in sales knows that one of the key challenges is persuading a prospect to decide instead of delaying. The owner of new mint products has only 30 days, until the end of a show, or even only a few hours until the end of the day of issue to decide whether to obtain a special label. A deadline focuses the mind and prompts the customer to submit the coins now instead of waiting and permanently losing an opportunity.
The Postmodern Era
American numismatics has entered the postmodern era of coin grading. In the premodern period before certification not so long ago, the grade was a general opinion agreed upon by the buyer and seller, negotiated anew with each purchase.
The modern era began with photo certificates in the 1970s and slabs in the ’80s. This is when the grade on the major service label became–while not infallible–impartial and well-informed, the judgment of a generally trusted third party.
In the postmodern period of the 21st century, the grader’s opinion remains the most important part of the grade, but collectors and the market also consider the overall presentation, appearance, and appeal of the coin and holder taken together.
Set collectors, for example, may buy only coins in the same type of holder to give their sets a uniform appearance (or they may have their completed sets re-holdered to put every coin in matching slabs). A collector will decide on a coin based not only on the enclosed object but also on how that coin and holder, taken together, fit into the collection. Similarly, special labels become part of the collection and collectibles in their own right. Buy the coin and buy its slab.