Lately, we have taken quite a few phone calls from people inquiring about the ‘condition’ of our bullion products, particularly US Eagles. What quality are the Eagles that we offer, these callers want to know, are they certified Mint State-69 or Mint State-70?

Because the new-product bullion coins that we sell are straight from the various mints, in virtually perfect condition as issued, these questions at first were mystifying to us.

But after having a few conversations with these callers, we found that they were being offered gold (and silver, and platinum) Eagles that had been submitted to various third-party numismatic grading services for quality rating. In other words, brand-new bullion coins had been sent off to the grading services to obtain professional opinions that, in fact, these newly-struck coins were…exactly as made.

Today there are numerous numismatic grading services serving the coin collector market, the most reputable of which are PCGS, NGC, and ANACS. These three pioneered coin grading, and PCGS and NGC most accuratley represent the industry standard. But they have been followed (some would say copied) by an entire alphabet soup of other such acronyms representing second- and third-tier grading outfits of varying degrees of competence and/or integrity.

These grading services have arisen over the past three decades to rate the quality of and help in the appraisal of classic collector coins from the 18th, 19th and early 20th centuries. And no wonder, considering most collectors’ fetish about the state of preservation of the little round treasures that they seek after.

For instance, there are hundreds of different US coins from the 1800s that might barely be worth lunch money if worn almost smooth (referred to as “poor-01” or “fair-02” on a 1-70 rating scale). The same coin in the condition that collectors call “fine-12” might be worth hundreds of dollars, even thousands of dollars if closer to mint condition (“almost uncirculated-50”), and might set you back more than the cost of a new car in a truly superb state of preservation (“mint state-65” or better).

With the current market emphasis so sharply focused on the condition of old numismatic coins, it’s no wonder that the two most respected coin grading services, PCGS and NGC, have between them rated over ten million coins on this 1-70 scale since their inception in the 1980s.

So how does it happen that these same grading services are now rating not only classical rarities, but brand new coins? Newly-made bullion coins, carefully struck and packaged at the US Mint, are now being submitted by promoters directly to these grading services, where, to no one’s surprise, these pristine coins often receive ratings of Mint State-69 and Mint State-70.

Why? So that bullion items can be sold to the unwary at collectible coin prices.

Here’s an example of how it happens: Our company recently sold a sold a Mint-sealed box of 500 1994-dated silver Eagles to another dealer. But rather than take delivery himself, he directed us to ship the 500-coin box directly to a grading service of his choice. Of course, being virgin, untouched, fresh product, all the coins would rate MS-68, MS-69 and MS70 and could therefore be marketed to unsuspecting customers as the finest condition specimens in existence.

What those customers don’t realize is that such modern coins are produced by the millions, and are easily obtained for their precious metal value plus a modest markup.

Many won’t learn that lesson until the day that they go to cash in their treasures. And then they will find out that no knowledgeable buyer will pay a nickel extra for a common bullion coin rated MS-68 or MS69, and that even the essentially perfect rating of Mint State-70 imparts no special value to many modern bullion coins, especially if bestowed by the more, ahem, ‘liberal’ of the grading services.

So, once again, certain lessons should be taken to heart by potential investors being courted by numismatic salespeople:

The playing field is never level.

The sharks are always better prepared than you are, and have a script that addresses your every possible objection.

And ‘caveat emptor’ should always be your byword when a friendly stranger offers you a sure-thing great deal.