Secure+ and what (it might) mean for the coin
By John Feigenbaum
Well, now that
PCGS has made it “Big One” announcement, it’s
possible to speculate on how this might affect
the coin industry (I used to call it a hobby but
I think that ship sailed a long time ago).
There’s an awful lot to digest here, but I had
the benefits of advance notice of this
announcement by Mr. Hall himself and I was able
to personally attend the Press Conference at the
Ft. Worth ANA National Money Show when the Big
One was unveiled publicly.
For starters, if you are not familiar with the
“Big One” I recommend that you read/view all
about it on the PCGS web site first. This was
actually a dual announcement:
1) PCGS is going to start
submissions (the submission tier is called
“Secure-Plus”, which costs a little more) to
make certain these items haven’t already been
submitted. If so, the system will allow the
graders to compare the coins with images of the
same coin to be certain it hadn’t been doctored
or altered in any negative manner.
2) Coins submitted in the “Secure Plus” tier are
eligible to be examined for a “Plus” grade which
is awarded to any coins the graders determine to
be in the top 30% of quality in the grade range.
Or, as David Hall defines it, the “A” category.
Let’s start with the laser scanning technology.
Mr. Hall claims that it was “never PCGS’
intention to grade the same coin 40 times” which
is a way upgraders use the system to repeatedly
send the same coin in until it finally gets the
added benefit of doubt and achieves a higher
grade that it typically would get. This
ultimately is a cause for “gradeflation” which
has long term negative effects on the hobby. The
logic also follows that a database of stolen
coins that have previously been “fingerprinted”
can be marked for future submissions. In the
event they ever come back in to PCGS, the coins
will be flagged and justice can be served.
Apparently one major insurance company is
offering a discount for SecurePlus coins thanks
to this service.
I love this concept for all the reasons PCGS is
brandishing. But it’s flawed… Clearly, from the
outset, there is a major loophole (or, chasm) in
the service because only coins submitted in the
more expensive “Secure Plus” tier are being
fingerprinted. So a doctored, or stolen coin,
can simply be submitted without the added
expense and we’ll never know if it was doctored.
Or, what happens if a coin is upgraded via the
non-Plus service but later submitted for
“crossover” into the “Secure Plus” and PCGS
realizes what has happened? Will the buy it off
the market? That could be very expensive for
them. I directed these inquiries directly to
PCGS’ President Don Willis, to which he replied
that this is merely the initial launch of the
product and they need some time to refine the
details. I hope, at a minimum, that they
ultimately choose to fingerprint every coin
submitted (at least every coin over $500). I
think that would benefit PCGS as much as the
As far as the “Plus” grading system is
concerned, again I think this is a very good
concept. Perhaps a great concept. I will let the
marketplace vote on that with their dollars
before I make further judgment. The concept is
brilliant as it achieves dual purposes for both
PCGS and the consumer. For starters, PCGS gives
collectors a new reason to submit coins and add
money to their enterprise. For the consumer,
PCGS is giving them a way to “unlock profits”
(as David Hall put it) from their high end
coins. PCGS is now formally admitting for the
first time that not all MS65’s are the same and
there should be greater value to the MS65+ coin
than the one that squeaked by on the 10th try…
Dealers like myself have been telling this to
customers for years, so it’s only natural that
the grading services would ultimately follow
The “Plus” grading is brilliant because it’s a
win-win for PCGS and the consumer.
It’s hard to say what value Plus coins will
garner in the marketplace, but it is easy to
argue that they are worth more than their
non-Plus counterparts. Only time will tell to
what degree. PCGS has a lot of evidence that a
similar concept worked well in the sports card
market, so they are hopeful that collectors will
want to give this a try.
What about CAC and the new Plus system?
I actually think that CAC is further legitimized
by the new Plus grading (did I mention that NGC
is going to Plus, as well. More on that later…).
PCGS is an independent third-party grading
service and CAC does a great job of grading the
grading services. Nothing has changed here, and
again the consumer benefits tremendously by
getting CAC’s seal of approval on their coin.
Where else can you spend $10-$20 for an
independent, unbiased opinion on the quality of
your coin. A coin with a “+” and “CAC” will
clearly be a consensus high-end coin. In theory,
all +’s should be CAC’s and visa-versa but I
assure you this is not going to be the case.
Grading is an art form at all levels, and
everyone sees the same coin differently.
The biggest premium will go to those coins with
the “+” designation and CAC stickers.
NGC follows suit with Plus Grading Announcement
Along with other dealers, I was happy to see NGC
follow suit with a press release on the same day
(March 25) as PCGS’ “Big One”. According to
Hall, PCGS invited NGC to join them in the new
grading standard. I see this again as a win-win
for the services and collectors because maintain
a consistent grading standard is very important
for the hobby. PCGS and NGC will always grade
with their own distinct perspectives and
guidelines, but at least we can compare a PCGS
MS65+ to an NGC MS65+, etc.
I would love to see PCGS share the laser
fingerprint database with NGC, but apparently
that is not in the cards. Beth Deisher, editor
of Coin World, asked Mr. Hall this question and
he replied something to the effect that “PCGS’s
shareholders might not appreciate” diluting the
potential profit of their proprietary
technology. Personally, I think each grading
service can and does get submissions based on
their grading quality, consistency and customer
services merits. The fingerprinting is a
security measure that can only better the hobby.
If the services are serious about getting rid of
coin doctors, the only true way to do it is to
create a common database that all grading
services can use to be sure coins are not
stolen, or doctored. They don’t have to share
grades… Couldn’t PCGS charge a royalty for use
of the database and monetize their intellectual
properly? NGC would have a lot of coins to scan
In summary, I think the “Big One” announcement
might not be the biggest news I’ve ever heard,
but I like the fact that the consumer has been
well considered in this product launch. Often
companies roll out new products to beef up
revenues but forget that the consumer needs to
benefit. I also love that NGC is following suit.
This should go a long way to minimize customer
confusion. Everyone resists change, so it will
be interesting see how the dealer and collector
communities react to this big announcement.
In the meantime, it’s business as usual at David
Lawrence Rare Coins. We’re still buying,
selling, trading and auctioning coins. Every