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Learning to Grade is Your Best Bet
By Bill Brandimore, Bank Note Reporter
September 03, 2013

This article was originally printed in Bank Note Reporter.
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I just read an article on a fake U.S. silver dollar in a fake government holder. Chinese counterfeits of early U.S. coins have been around for at least the last five years and I suspect we’ll see some fakes in the paper money world before too long.

I just got a sad email from a collector whose 1886 $5 Silver Certificate went from 58 to Net 30 restored when he resubmitted the note in an effort to get a better grade. It had been graded by another service, and the guarantee of the other service only goes to a supposed due diligence. The lesson here is to be sure you know who you are dealing with.

I really can’t make endorsements on what grading company to use. That is not my place. But I can advise you to consult a trusted dealer or fellow collector for a recommendation on what sort of grading company you should choose.

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Take a look at the websites. What do the services offer in the way of guarantees? Talk to your favorite auction company and ask them which services will yield a fair price for your notes when you want to sell. In short, do your own due diligence.

Another way to protect yourself is to study grading in your own right. Take a grading class. Look at your notes in a darkened room, angling them against a strong light. Know your dealers and don’t be afraid to ask questions. Many years ago I asked a coin dealer how I could tell a coin he was offering me was truly uncirculated. He told me, “because I say so.” Unfortunately I took him at his word.

Years later, when I sold the coin, I found it to be not quite uncirculated. I would have made a nice profit. Instead I made a modest one and only because of inflation.

Don’t feel bad about making a mistake. Just don’t keep making the same mistake.

The thing I really loved when I began collecting currency was how enthusiastic the dealers were. They were truly interested in educating me about the hobby, about notes, about grading, and about what to look for.

With the rising popularity of currency we have seen more and more currency dealers come to the hobby. Hold them to the same high standard of currency dealers in the past. If they don’t want to educate you, if they don’t want to tell you what to look for, you should look elsewhere.

That was the last piece of wisdom I picked up in my earlier interview with Scott Lindquist: “If you find a dealer who doesn’t seem to agree with accepted grading standards and can’t seem to see the defects in his own notes, you may wish to shop elsewhere. Also, if you know the market is weak in a certain area and your dealer seems to live in an alternate reality, keep looking.” When should you seek a third-party grader? I think one strategy is to purchase notes that are already graded by a well regarded service.

It doesn’t make sense to send off a note worth $10 for grading. I choose not to have notes graded if they are readily available and worth $100 or less. If you can buy a $25 note in a holder for $25 it makes sense to do that.

If you’re considering purchasing a key note for your collection it just seems smart to go with a note that is already encased. That provides you with a guarantee that the note is genuine and gives you good assurance that the note is in the grade you are looking for. If you don’t think the note lives up to a grade of Gem 65 or 66, don’t buy it. The old advice to buy the note not the holder is pretty solid.

I have noticed that some notes I have had graded are somewhat lacking in centering but still get a Gem rating. This is the area that seems to have slipped a bit, in a sort of bracket creep. I think the new preponderance of 66 notes is illustrative of this bracket creep. Excellent centering now seems to be the hallmark of a 66 note. Notes graded 65 now may be off-kilter a bit on one margin. That seems to be a new standard. Face and back alignment seems critical in securing a Gem grade.

Study the criteria on grading published by the grading companies. Some of the graders offer booklets explaining their grades.

Sometimes you get lucky and a note you own is over graded. Sometimes you’re not so luck and your note is under graded. Because of serial numbers on most currency pieces, it is a bit harder to resubmit. Clearly this strategy has been in play in coins. Buffalo nickel proofs, for example, seem to have higher totals for graded specimens than mintage figures. The answer is re-submissions in search of higher grades.

This might work in the area of U.S. Fractional Currency as those notes have no serial numbers. I have been surprised on occasion at the grades I received on some of my Fractionals. I tried to buy them as Gems and some have been 64s, while some have been 66s.

When I sell them some day, or more likely my heirs sell them, I suspect the buyers will be purchasing the notes and not the holders.

That leads me to a final point for this month’s column. Have you had a good talk with your heirs about the value of your collectibles and how they should be disposed of in the event of your death? Here’s where a trusted dealer or auction house really becomes valuable.

I keep my better notes in leather bindings. In fact, one of my rituals when I look at my notes is to smell the old leather before I open an album.

I have placed Post-it notes on the inside of my albums with a dated estimate of what I think the retail value is, along with an explanation that dealers will pay wholesale prices for notes and auction houses will charge a fee for their services in the range of 15 to 17.50 percent.

I have one dealer’s contact information on file. This is of a person I have dealt with who has impressed me with honest dealing practices over the years. I have sold notes in the past for various reasons. I have always chosen to use a trusted dealer or an auction house and I have always been pleased with the results.

I feel I owe good stewardship to my family. None of my heirs have any interest in my collections so that makes it even more important to treat this issue with great care.

When you read this the American Numismatic Association’s World’s Fair of Money will be over. I couldn’t make it this year due to family obligations. I will be at the Michigan state show, however, in November. This year that show will once again be held in Warren, Mich., at the Macomb Community College facility. Contact me at with your questions or comments.

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• See what guides and supplies our editors recommend for keeping up with your collection.


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