Yet Another Grading Issue

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Posted By: barrysloate

I recently sent a large group of raw cards in for grading that I purchased from various auctions over the past couple of months. The cards all came from major auction houses, and since I was unable to view them in person, I accepted their grades knowing full well that invariably there would be some discrepancies.

The first batch has been completed and the grades have typically come in one to two grades lower than described in the catalog, and in some instances three grades lower. I say this with no animus towards any of the auction houses, and as a professional I take full responsibility for my purchases.

The question I bring up for discussion is: at what point do the auction houses that sell raw cards, and the companies that grade them, need to come to a meeting of the minds? I accept the subjectivity of grading, but I think this discrepancy is just a little too wide. Any thoughts?

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Posted By: rob

Barry,

I have had this problem numerous times as well and simply adjust my purchasing accord to the person I am buying from knowing full well many people do not subscribe to the current grading system in describing their cards. "Old timers" who have not relied or studied the grading system are usually most susceptible to discrepancies. Either way it stinks feeling like you got a VGEX card and it comes back a 2.

Its just the nature of the current beast, some do it out of ignorance, others intentionally mislead, I just do my best to learn the seller and adjust.

I am not sure there is any way to hold someone accountable unless it is specifically guaranteed a certain grade; and there is no way to get all buyers and sellers on the same page.

Rob

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Posted By: peter chao

Barry,

If your going to buy raw cards from auction houses, just assume their grading is just hype, and buy accordingly. It's pretty much like when I go to a card show and the store owner says a card is near mint. When you look at the card you know it isn't so you buy or don't buy accordingly...

Perhaps you haggle about the price...or you let it go.

I doubt if you will ever get the auction houses and the grading companies to agree on anything. They are 2 different types of businesses. Auction Houses are into hype...the grading company is more of any assembly-line type of business.

Peter

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Posted By: davidcycleback

Maybe the wrinkles popped back during shipping.

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Posted By: barrysloate

Let me just add to the mix that these are not oldtimers I bought from, but state of the art auction houses (or at least this is how they market themselves). Therefore, I hold them to higher standards. Added to say "good one" David!

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Posted By: Mark Burke

I have never bought raw cards except in shrink wrap but based on the collective wisdom of the folks on this board, I would be skeptical that an auction house would take out the old loupe and micrometer and spend the time necessary to properly grade a raw card. In reading over these threads, I have been tempted to buy some raw cards just for the thrill but honestly, I would probably assume a grade between 1 and 3 points lower than what it appeared to be in the scan and bid accordingly.

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Posted By: barrysloate

One of the lots I purchased had a key card graded EX-MT in the catalog and it came back VG; yet in the same lot a card graded VG-EX came back EX-MT! Dollar wise, it's pretty much a wash, but that isn't the issue. Shouldn't the major auction houses know by now the standards of the grading services and be prepared to abide by them? I don't care if a card graded VG-EX comes back VG; truthfully, I could barely tell the difference myself. But these wild swings suggest that there needs to be a better system for selling raw vintage cards.

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Posted By: JK

"truthfully, I could barely tell the difference myself."

Barry, to me, it seems that with respect to those two cards, its a grading company consistency issue rather than an issue with the auction house. As to the other cards in the lot, I have no doubts you are correct.

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Posted By: jay wolt

"But these wild swings suggest that there needs to be a better system for selling raw vintage cards"
The best system is for the auction house to have these cards graded
and then you will know that PSA, SGC or GAI states its a VG card or
an EX/MT. Then you can bid accordingly.

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Posted By: E, Daniel

It's a pity you didn't get to view the cards carefully first before shipping them off for grading, because the more interesting question is whether the Auction houses over-grade purposely for greater profit, or simply don't spend the time to inspect the cards carefully (also for profit in my opinion, as every hour saved in labor is money in the pocket for nothing!).

Had some of the cards which graded very differently been because of a SUPER tough wrinkle to detect, taking a card with otherwise nice corners and stuff from a 6 to a 4, or the most minute of rubs on the back not-affecting-text dropping a card from a 4 to a 2, well, that's kind of understandable.
If they simply over or undergrade on condition that is very simple to gauge - such as corners, edge wear, creases, wrinkles that are reasonable obvious, paper rubs, etc......then that would be something I think COULD be taken up with them, especially if there was some hobby weight (such as this board, Old Cardboard article, etc..) thrown behind it.

But I agree - clearly not all that acceptable 10 years into a reasonably standardized set of grading criteria established by the big 3, and accepted by the hobby to a greater rather than lesser extent.


Daniel

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Posted By: warshawlaw

how the grades never seem to come back better than the auction houses say? In my suspicious lawyer's mind, if the auctioneers were simply lousy at what they do, there would be a spread of cards, some better, some worse. The fact that they are invariably lower grades tells me that whoever is doing the grading is either erroneously or intentionally overgrading.

Were there scans/did you ask for scans?

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Posted By: barrysloate

Adam- actually, if you read my post one of the raw cards that was graded Vg-EX in the catalog came back an EX-MT. So that just suggests either sloppiness or a lack of conforming to today's grading standards. I think there are two things going on- deliberate overgarding, as well as a lack of communication between auction house and grading service. And let's keep in mind at least one major auction house has hired a former head grader to work for them. So, shouldn't they be completely in tune to what's what? I don't think deliberate overgrading works today. Maybe a random ebay seller who doesn't know cards too well can get away with it, but if you market yourself as the biggest and the best you are held to higher standards.

Edited to add some were pictured, in other cases I didn't ask for scans. Scans don't always equal having the cards in hand. And this was a very large lot, I doubt they would have done it.

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Posted By: Elliot

Barry, on the two cards that you mentioned, what did you think the grades would be when you had them in person before you sent them in to be graded?

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Posted By: barrysloate

I mentioned more than two, but the one I was most concerned with was the one graded EX-MT. The front was pictured in the catalog and on the website and it looked awfully close to that grade. When I received it I saw the back had a spider wrinkle through it, the kind that may have actually been there since it was issued. I knew immediately that EX-MT was out of the question, was hoping for a VG-EX and got a VG. I don't blame the grading service, but the auction house should have been careful enough to know the card was not even close to EX-MT. If I could see it, so could they. I think you can no longer get away with that kind of shoddy grading. And the one they called VG-EX that actually came back EX-MT, I knew it was a very nice card but forgot what it said in the catalog until I checked this afternoon. Nice bonus for them to have way undergraded the card, but fact is it is equally careless. That would have flown 20 years ago, but the present and future of the hobby entails accurately graded cards. Just too much at stake for it to be otherwise.

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Posted By: Brian

Barry--

just out of curiosity, did you contact the auction company? I assume that one does not have much recourse, since they claim they do not guarantee third party grades. If the card was trimmed, for example, I assume that any reputable company would allow a return.
However, I agree with you--by all standards of all grading companies, a card with a wrinkle/crease cannot by definition grade Ex-MT. So with that (somewhat unwritten) understanding, they should allow a return. Perhaps those standards should be clearly stated by every auction company, akin to what some sellers on eBay do?
Brian

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Posted By: FYS

Barry,

The Auction houses are well aware of what grade a card would receive from a 3rd party grader. I say this because the houses themselves are some of the largest, if not the largest, clients to 3rd party graders. With that kind of volume, you certainly realize the grades you will receive.

Personally, I believe the auction houses overgrade raw cards, period. Stating that the auction houses have different grading standards than the 3rd party graders is probably not that accurate based on my feelings. There may be some slight nuances they may disagree with, as many on this board, (pin holes vs. downgrade, writing on blank backs vs. down grade, amount of paper loss vs. down grade etc.).

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Posted By: Frank Evanov

I have had the same problem as well and I now tend to avoid buying raw cards. I figure if the card is as good as the auction house says, they would have probably graded it themselves and likely gotten a higher selling price.

Frank

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Posted By: E, Daniel

First thing they would tell any consignor is that a raw collection will garner a whole lot more cash graded......only reason to not grade - is to fib on the condition and hopefully get a little extra cream off the top.

Daniel

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Posted By: bruce dorskind

Barry

The Auction Houses have a single objective which is to obtain the highest possible
price for the lot or card in question.

When they auction graded cards you often see phrases like PSA 6+++ should have
been a 7. How often do you see PSA 6 --- probably should have been a 5?

We agree that if the cards were worth grading they would have been graded.
A typical ungaded T 206 for example in near mint to mint might sell for $300 but in
a PSA 8 holder it is $2000. Whilst the difference is not as pronounced in
the lower grades (3-6) it is at least 250%.

Our rule of thumb for the past 32 years has been simple.

Trust no one
Double Check everyone

You are too wise, too trusting, and too smart to assume that your
competitors are not going to hype the items they are selling.

You certainly make the case why it only makes sense to acquire the
best cards in top graded condition available.

Best,


Bruce Dorskind
America's Toughest Want List

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Posted By: barrysloate

A few responses- no, I am not going to contact the auction houses. I don't expect any reimbursement (I would feel differently if an expensive card were altered or trimmed) and will just stay away from raw lots, or bid lower and let them go to someone else.

Bruce, I appreciate your theory about buying the highest grade possible, but that would apply to already graded cards. You would not buy a NR MT raw card, that just doesn't happen. My argument here is that if you know a card is in the fair to good range, it's not responsible for auction houses who claim to be the very best to call the card VG. I know it is done to make the most amount of money possible, but that is not a satisfactory explanation. I could make more money than I do now if I bought VG cards, trimmed them down, and sold them as Mint. But that is not a good business model. Neither is calling a card with several creases VG, because there is no chance it will receive that grade when it is submitted.

The issue here is doing a better job, something that is easily within reach of all the major auction houses.

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Posted By: Hal Lewis

I am willing to bet that these large auction houses do so much business with the grading companies that they have arrangements set up to let them get "PRE-SLAB" grades assigned to the cards...

and then have the option of getting them slabbed...

or taking them back and selling them unslabbed.



If they like the grade given by the grading company, they get it slabbed.

If they don't like the grade given, they take it back unslabbed and assign THEIR OWN grade that is invariably higher than the one from the grading company.

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Posted By: barrysloate

Hal- I do believe this is done with certain cards. I think the most expensive cards have to be graded, and I think the least expensive group lot material is never sent in and is merely graded by the cataloguer, often optimistically.

But I know I will often see a group of cards that should have been graded that isn't, and I can only assume that something transpired that the bidders don't know about. I'm sure if the house disagrees with a grade, and can't get it bumped, there's a good chance they will crack it out and grade it themselves. I think it is a shortsighted plan and not the best way to build market trust.

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Posted By: Corey R. Shanus

Interesting thread. A few points.

First, as you said, simply assume the grades will come back on average 1-2 notches lower. Maybe on a few you'll get lucky (the card will have been properly graded or even undergraded), and maybe on a few you'll be unlucky (the card will have been overgraded by more than 1-2 levels), but at least you will have bid with your eyes wide open.

Second, the overgrading of raw cards by auction houses for the most part reflects simply the puffery that goes on in auction descriptions in general. (In saying this I do not refer to isolated cases of sloppiness -- missing, say, a minor crease that had it been noticed would have resulted in the card's description being downgraded.) Is overgrading raw cards really that different than describing something as being rarer or more historically important than it really is, or describing a poster's colors or a photo's contrast as being brighter or crisper than in reality it is? That kind of stuff goes on all the time, and that is why people are well-advised to use auction descriptions as rough guides generated by auction houses that are hardly impartial in their descriptions.

Third, in my view the best way for some corrective measures to happen is to name names. There's nothing like widely disseminated negative publicity to get businesses to mend their ways. With graded cards it is easy because there is no quibbling about what the truth is. If a card is graded excellent and then comes back a "2", then its pretty cut and dried how materially overgraded the card was.

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Posted By: barrysloate

Are you asking me to name names on the board? Would you? I generally find all raw cards to be somewhat overgraded. I also find it to be a little worse of a transgression than puffery. When something is called rare, or I see words such as "extraordinary" or "exceptional" in a description, my eyes glaze over and I pay absolutely no attention to them. But when I see terms such as "very good" or "excellent" I feel a need to quantify that in some way. No reason why an auction house can't grade raw cards closer to the way a grading service will, since they know a great number of them are headed that way anyway. There are always aspects of the hobby that need work, and this is one of them.

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Posted By: Corey R. Shanus

I'm not asking you to do anything. I'm simply responding to the question you posed. With this issue, as with so many others that involve questionable behavior by auction houses, people legitimately complain yet in the end almost always nothing changes. One proven way to get a business to change its practices is to create negative economic consequences for adhering to the status quo. Exposure and negative publicity with resultant decline in realized prices will presumably cause profit-maximizing auction houses to at that point do a better job of grading raw cards.

In regard to the puffery point, on this one we'll just agree to disagree. As you know, memorabilia is what I collect. Taken literally the catalogue descriptions on most items of memorabilia would cause prospective bidders to materially overvalue the item. To a person who collects, say, photographs, having an auction house describe a photo with mediocre photo contrast or presentation as having great visual appeal is akin to describing a vg card as ex-mt. It goes on all the time and just as with cards, there is no reason why the descriptions cannot be more accurate. As with you, my eyes glaze when I read the catalogue description, and that glazing doesn't stop when the item I'm reading about is a raw card as opposed to a photograph.

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Posted By: Jason L

Barry,
you are correct. there just shouldn't be so much variability, regardless of the direction. Comments about trust, sellers' incentives, negative economic consequences, -I agree with parts of many previous posts above.

Buying remotely has really turned risky. The economic incentive to misrepresent the merchandise is skyrocketing with the prices, the chase for the cash makes people cut corners, and with the increasing comfort with online sales of all sorts, it is becoming far too commonplace for buyers to feel unfairly treated in a transaction. The cards are not graded in front of you, you make a decision from hundreds or thousands of miles away, and you need to be comfortable enough to send an increasingly larger amount of dough to get what you want...doesn't sound like much fun to me. -And yet I still play.
I'm sorry Barry, but I have no real answers. -except to maybe come up with a bidding formula to help you handicap the auctioneer's descriptions. For instance, place numeric values on each grade, then based upon the degree to which the auctioneer employs flowery language in the description, apply a premium or discount range to that item. If he is selling a T206 Cobb, raw but described as G-VG, but then uses more than 5 superfluous descriptors (words such as fabulous, superb, splendid, blazer, super-fantastic, and my favorite: exquisite), apply a 2 grade discount. If less than 5 such words are used, then apply a 1 grade discount...it's stupid, but at least it's a system...

We need more cards shows.

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Posted By: Larry

I will take any item back if we overgraded accidently by us, and we feel we are qualified for basic condition grading and use three professional services to examine for trimming or coloring. I prefer graded cards so as to take our subjectivity out of the equation but some customers prefer raw or lots that are cost prohibitive to grade...Although grading is subjective, anyone that sells cards raw should grade within one full grade point except for blank back cards that are near mint but a grading company downgrades for minor paste or tiny tear to a 2 or 3 when a card should be a 7 otherwise, card should be averaged to a four. I do feel 3rd party graded sales are final unless there is a major discrepency, then the 3rd party grader should be contacted by mutual parties.

Raw cards must be gradeable or stated as is however in lots, conservative estimates by % should be within 5%-10% margin of possible error and key cards should not be off by more than one full grade, except on blank back cards ....

We can safely say we have VERY FEW returns and perfect customer feedback.

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Posted By: barrysloate

Corey- actually, the point where we agree to disagree I actually do agree (is that confusing enough?). If a photograph has mediocre contrast and it is described as having rich tones, or pictured in the catalog darker than it actually is, I think that is more an issue of misrepresentation and is critical. I consider puffery to be the use of words or phrases like "rare" or "where are you going to find another one"; that stuff is just meaningless blather.

And Jason- your point is well taken, and if a raw card is graded VG-EX, assessing it as good or very good when bidding is probably accurate. But there is one problem: you won't win the lot, because somebody out there will bid as if it were an actual VG-EX. You could never be competitive in that situation. Best remedy is to grade accurately. If you bill yourself as the biggest and best auction house, no detail is too small. And grading cards properly is far from a small detail.

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Posted By: Jason L

yes, it's true you will likely not win the lot.

But, from a collector's perspective (rather than a reseller's perspective) at least you aren't getting shafted and paying more than you should to end up disappointed with the merchandise...I would prefer to lose every lot and let someone else overpay...

from the dealer perspective, yes, we want to see this situation of inaccuracy dealt with properly, so that product churn can continue with fair and regular markups along the way, as occurs for all items in a healthy market environment...it benefits all parties in the long term...hiccups in profit potential (as could be caused by dealers buying overpriced product) likely causes liquidity to stall or dry up for longer periods than dealers would like to see in their inventory...is that a fair statement, do you think? (I have never been a card dealer or really ever sold any cards before, so I would be curious if I have this thinking correct)...

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Posted By: barrysloate

While buying overgraded cards does cut into a dealer's profit, I would think the real target audience is the collector. I sell to both dealers and collectors, but I get a higher price from a collector. While there are many ways to look at this, I just say do it right. Grading is subjective but that doesn't mean it can't be accomplished with greater precision.

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Posted By: Steve

Barry

Not everyone is as honest as you. Grading a baseball card is not rocket science. No way a card should be called ex/mnt and come back VG. Had a collector brought those same cards to that auctioneer and just wanted to cash out they would be properly graded (downward).


Steve

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Posted By: barrysloate

Appreciate the kind words, but the real issue is finding some way to fix the system. Each auction house has a personal responsibility to do a better job. That said, it will probably be business as usual.

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Posted By: Al C.risafulli

Buying remotely has ALWAYS been risky. I correlate the rise of third-party grading directly to the rise of internet selling of cards.

That said, there are some auction houses that are trustworthy. I bought a lot of 150+ gum cards from REA two years ago and had about 75% of them graded; I was pleasantly surprised to see that almost every one graded out as described or higher. I bought a lot of T205s from Huggins & Scott and all were graded accurately.

I also think that, in cases like this, it's important to note the subtle differences in standards between the grading companies. There most definitely are differences in how the two grading services treat certain types of flaws that can result in some discrepancies. It is my opinion that it's these subtle differences that result in a good portion of the hard feelings (over unexpected grades) from most of the more knowledgeable collectors out there. In my opinion, issues like surface flaws, edge wear, print defects and tiny bits of paper loss or scuffing on the back of a card result in some pretty dramatically different treatment from the two grading services. Even among knowledgeable collectors there is a wide range of opinions over how to treat these types of flaws when assessing the condition of a card.

There are some members of this board that are acutely aware of these differences and choose a grading service based on the flaws in the card and how each company treats them. There are other members of the board who are loyal to one service or the other, and are willing to live with the grades they get. Where it gets dicey is when a person buys a raw card described by one seller, submits it to their grader of choice, and gets a different result than the seller described - there are so many grey areas in an equation like that, it's difficult to determine who is at fault, or even if ANYBODY is at fault.

-Al