Saw that posting too, and also noticed that they recently bought the card for ~$200 less. Looks like they're trying to flip it for a profit -- buy low cause of the visual deficiencies (crease across his face, blue spots on the back) but sell high cause of the generous grade. The seller is either doing it himself or on behalf of a consignment. It's still a good price for the grade, so probably some registry-builder will grab it.
I agree it's an overgrade -- a 5 should not have a crease across the main part of the front picture. But the strong bold colors and solid corners make it too good to be a 3. I'd have expected a 4, give or take a half-grade.
PSA's website describes that the submitter's identity is separated from the card so that the grader doesn't know anything about the submitter. The story that you describe, though, sounds like the dealer walked over to the grading company's table at the same convention and "worked something out" in person. Super fishy, and certainly cause for concern since it compromises the integrity of their product -- their grading reliability and consistency.
side note about the Mayo shown above -- TPG holders have an inner frame, but why is the inner frame shown on that card so much larger than the card itself? is that typical for that set? cause I recently saw a PSA-holdered card where the holder's inner frame was so grossly mismatched to the card and I therefore passed on bidding (it was ebay), concerned that the holder was fibbed.
Thanks,
--S
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collecting T206, 1940 Play Ball, 1947-66 Exhibits, and 1952 Bowman. e-mails preferred over PM.
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