BEWARE RAW “BARGAINS” – ESPECIALLY FOR YOUR NUMISMATIC PROTECTION!

Over the last 16 years, I have continually observed ads in various trade publications offering “raw” Brilliant Uncirculated (BU) coins, or About Uncirculated (AU) coins. Prices ranged from $100 to $40,000+. The term “raw” means these items are not permanently slabbed or encapsulated by a major third-party grading service, such as NGC or PCGS. (I only sell coinage in these holders to offer the buyer a grading protection and best value, based on compared past performance with other services. Indicated is the coin’s grade shown on the enclosed sealed insert. It also attests to my agreement with that grade and the coin’s genuineness.Upon inspection of most such raw purchases by the unknowledgeable, either via the mail, collection appraisal or at coin conventions, the end result in most cases is the same. Their coins were over-graded! Dealers at various shows have shown me similar material, in total disbelief! Should the buyer be fortunate enough to cross paths with an honest knowledgeable dealer, while the coin was sent during the approval period, he or she can be made aware of the problem.

Whenever an observation is made for a coin offered at $499.00 or $7,995 or more, and it not slabbed by a major grading service as NGC or PCGS, I exclaim “why not?” A figurative red flag pops up immediately. Here’s why. Let’s use the 1847-P $2-1/2 Liberty (Coronet) quarter eagle gold piece as an example. The ad informed the potential buyer that this “raw” coin was Brilliant Uncirculated (BU) at $3,995. Price was in line with retail price guides. Unfortunately, when examined, this coin was “doctored” to hide its slight definite wear on its high point or first area(s) to indicate a metal loss and several digs or marks. The term BU now means Been Used!

If the piece could be rated undoctored AU-58, it would be valued at an approximate $2,500 retail. Not a bad profit for this seller. Deplorably, a doctored AU-58 piece is worth less. How much less? Try $1,950. Now that’s a nice profit for this seller and a real downer for the buyer, who will eventually and sadly discover what the issue is worth – and may leave the coin collecting hobby for good.

What do we mean by the term doctoring? Doctoring is a form of surface alteration who primary objective is to hide slight metal loss, fine scratches and/or bag marks on a coin’s obverse portrait or field, etc., or damage. It can mean polishing or whizzing to various degrees. Whizzing is where metal is moved mechanically to simulate mint luster or create the illusion of original luster. Thus, a new or undoctored attractive look is presented to the neophyte. Silver coins can be artificially toned to hide the abovementioned surface alterations and therefore, not being encapsulated by NGC or PCGS. Another example which comes to mind is the 1839-D (Dahlonega, GA Branch Mint) Coronet $5 half eagle gold price. It was advertised “raw” as AU-58 for $12,500. Approximate real value is $17,500! Such a buy generated instantaneous BARGAIN HUNTER attraction. Not enough people logically question why is this coin being offered at this level. Upon inspection, this doctored coin was valued at $6,000 to $7,000. Nice dealer profit. Sad buyer loss.

Coinage with large price spreads between grades are special favorites of specific dealers and especially the unscrupulous type of boiler room operations. Concerning the latter, they also have no scruples when selling coins to the uninformed. They will think nothing of selling a raw coin for $7,000 that’s worth $100 or less!!! I’ve been involved in legal cases where the said was a reality.

Lessons to be learned: In my opinion, one should never purchase a raw coin – unless they are proficient or skilled in grading coins. Make sure you procure coinage encapsulated especially by NGC or PCGS. They are considered -by many coin dealers- to be the leading third party grading services. If the seller does not want to have the offered coin encapsulated by one of the said third party grading services noted, I would look elsewhere or question the reasoning. Then check his or her response with other dealers as to the service planned to be used. Remember you want your interest protected via another respected opinion.
In my opinion, strongly recommend not buying coins over $100 which are housed in any hard plastic holder that snaps open, slides open or has to be unscrewed to be opened, or clear 2″X2″ soft plastic or Mylar holders (both known as FLIPS) or stapled cardboard holders with a cellophane type coin window. Why? Should they be over-graded or doctored you most likely will have a difficult time getting back your money. You may hear: “that’s not the coin I sold you” or “you did something to the coin to lower its value,” such as clean the coin, etc.

Never remove a coin from a sealed or stapled flip or any sealed holder. Why? Should you discover the coin is over-graded or has problems, you have virtually no recourse. You will hear that you messed up the piece, etc. Save yourself the potential grief.

Remember, there are bargains in numismatics, but you must be numismatically astute to find them when the opportunity presents itself. So pass on the coin, which might cost $550 that is being offered raw for $275 or $300 -unless you are an expert! Ask yourself as to why such a bargain price is being offered.
Also, be aware that while a coin can be encapsulated by a grading service other than those previously noted, they may not bring equal value, even if they indicate the same grade. Strictness in standards can differ. I have seen them bring equal market value at major coin auctions and conventions, but this is not always the case. True grading skills are required to differentiate or recognize the grading differences between different services MS-60 or MS-65 encapsulations.

Example: Saw an 1870-S $1 gold piece graded MS-60 by a lesser service. Coin should be worth $1,750-$2,000. It sold for $675. Why? It was really an AU-55+ piece -originally- but brought less than AU money because it was lightly cleaned! NGC and PCGS would not put this coin in their slab. Such material is used for sale by the unscrupulous telemarketer or dealer.

It is important to know what grading service holder your coin is slabbed in and what it is worth compared to an NGC or PCGS graded coin. Remember, knowledge is power -but only when you use it.