Certification (grading) of coins and banknotes in our region has not yet taken off as is the case in the rest of the world, especially in the United States and Asia. Because of this, many numismatists rightly ask: What actually is certification? What is its purpose? And what does one gain from it?
Coin and banknote certification, also known as “slabbing,” is a process in which an independent professional company assesses their authenticity and grade of preservation. Following the assessment, the coin is permanently sealed in a protective rectangular box (a “slab”), and the banknote in a rigid plastic sleeve. The aforementioned box or sleeve contains item identification data, a unique identification number, a barcode, and the preservation grade.
For coins, the most famous certification company is NGC (Numismatic Guaranty Company), while for banknotes PMG (Paper Money Guaranty). Both companies operate under an umbrella organization Certified Collectibles Group (CCG).
Source: NGC [www.ngccoin.com].
Why is that done?
The main goals of certification are:
- Authentication – Preventing fraud and verifying that the item is authentic.
- Objective assessment of preservation – Standardized grading removes subjectivity and makes it easier to compare items of the same preservation degree.
- Protection and preservation - A “slab” box, or rather foil, protects the item from damage, air, moisture, and physical contact.
- Increase in market value – Certified examples usually achieve higher prices on the market due to customer trust.
- Easier sales – Shoppers and merchants around the world prefer to buy certified items because it gives them a greater degree of security.
Benefits of certification
- Customer trust – Especially important in online sales where the condition of the item cannot be checked in person.
- Standardization – The evaluation of the degree of preservation is carried out according to certain universal standards.
- Protection of objects – Encapsulated objects better resist external influences and time.
- Liquidity - Easier and faster sales on the international market.
Drawbacks of certification
- Price – Certification can be expensive, especially for lower-value items.
- Senseless certification – Certification is financially unviable for cheap or damaged items.
- Possibility of disagreeing with the grade – Some collectors may consider the grade to be inaccurate or incorrect.
- Certification errors – It sometimes happens that items of questionable authenticity (e.g., fake banknotes overprints or fake specimens) “slip through” certification.
- Permanent encapsulation – The item can no longer be physically inspected without damaging the plastic packaging.
- There are no guarantees of authenticity. subject – Certification is merely an “opinion,” and no guarantee is issued that certified copies are definitely authentic. In other words, there is no financial or material liability on the part of the certification company if it makes a mistake during the certification process.
Source: Numex – Coins, Banknotes & Militaria Store [www.numex.hr].
Most famous certification companies
- NGC (Numismatic Guaranty Company) – Best known for coins.
- PMG (Paper Money Guaranty) – Best known for paper money.
- PCGS (Professional Coin Grading Service) – NGC's main competitor, especially in the US.
- ANACS – An older American company, slightly less prestigious.
- ICG – Another smaller American certification body.
- GENI – The increasingly popular French coin certification company.
- CAC Grading – A newer American coin certification company.
There are still a whole range of companies engaged in certification, and their number is growing day by day.
For most European and global collectors, NGC and PMG are the most recognizable and desirable brands.
About how much does that cost?
Prices depend on the type of item, the speed of the service, and membership in the organization:
- Basic certification:
- Coins: from 19 to 40 USD per piece (NGC)
- Banknotes: $25 to $50 per piece (PMG)
- Premium or express servicesfrom 60 to 200+ USD
- Additional costs:
- Shipping, insurance, customs duties.
- Annual membership.
The market value of the item also has a major impact on the certification cost. The more expensive the item, the more expensive the certification.
In Croatia and the region, the service of authorized intermediaries who send items to certification centers in the US is most commonly used.
At major numismatic fairs in Europe, it is also possible to get “on-site grading,” meaning that certification is done at the fair and is finished in a couple of days. In that case, the items are not sent to the USA, but everything is done “in the field.” This service is available only for certain types of items, such as modern coins and banknotes.
Which items make sense to certify?
It makes sense to certify:
- Rare and valuable coins or banknotes.
- Coins and banknotes in an exceptional state of preservation (UNC, MS-65+ or PMG 65 EPQ+).
- Historical specimens for which authentication is important (e.g., ancient coins).
- Coins and banknotes intended for sale at international auctions.
- Coins and banknotes for which there is a large number of counterfeits on the market.
It makes no sense to certify:
- Low-value coins and banknotes.
- Coins and banknotes in poorer condition (damaged, torn, corroded specimens).
- Coins and banknotes for which there is low market demand.
How much more value is gained
Added value depends on the specific situation:
- For rare specimens in top condition, certification can increase value by 50-200%, especially if they receive a high grade (MS-67, PMG 68 EPQ).
- For average specimens, Certification can add 10-30% to the price, primarily due to verifying authenticity.
- For cheap copies, certification often does not increase value more than the cost of the service itself.
Conclusion
Certification of coins and banknotes represents a serious step in preserving and monetizing collectible values. Although not necessary for every specimen, for rare and high-quality items it can be crucial for maximizing value and buyer trust. Before deciding on certification, consulting with an experienced numismatist or dealer is recommended to evaluate the cost-effectiveness of the procedure.
Author: Zlatko Viščević
