[Bram99]

Originally Posted by Tyruscobb

Although competition generally benefits consumers (e.g. lower prices, better service, etc.), I’m skeptical that any new third-party grader will help solve the hobby’s biggest problem - altered cards receiving numerical grades and over-grading.

The reason is the vintage fee structure. Most TPGs do not have a flat fee. Instead, the fee varies depending on the card’s value. This creates a subconscious financial incentive (and, unfortunately, probably a conscious one for some TPGs) to over-grade. Over-grading increases the card’s price, which, in turn, increases the fee. An increased fee increases the company’s profitability, which, in turn, may increase the grader’s pay. The current vintage fee structure has too many interest conflicts that have created the current problems.

Removing the financial incentive to over-grading is what needs to happen to fix the problem. TPGs should charge a flat fee to grade a vintage card whether it is a beater or a gem-mint 10. The fee should not vary depending on whether the card comes back a Poor 1 or gem 10. So, unless any new grader uses a flat vintage fee, the problem will continue.

A new TPG will make the existing TPGs improve their services and fees, as well as reduce turnaround times. However, any new TPG that uses the same vintage fee is equivalent to putting a bandage on a bullet wound - it will not cure the underlying problem. It may temporarily improve the situation, but eventually even a new TPG’s actual graders will fall victim to the above-referenced dilemma - increasing the company’s bottom line.

I’m sympathetic to this argument but it doesn’t answer a key issue: prices in every realm of the economy help find equilibrium between supply and demand. A big problem now is that people are sending in very inexpensive cards relative to the grading fee. You see it even with vintage where the grading fee is close to the value of certain vintage commons. A modification of this idea would be to set the grading fee on a scale based on the SMR value of a certain grade of the card, regardless of actual grade. This could have the same benefits of the above plan with the added benefit of metering the demand more.