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Grading U.S. Stamps
In 2001, Professional Stamp Experts presented to
the philatelic community a grading system for United States postage
stamps. For the first time, all attributes of a stamp - centering,
soundness and eye appeal - were incorporated into a single grading
model, and a method for arriving at a single net grade for a stamp
was established.
In the ensuing years, this model has been
discussed with many of the nation's leading dealers and collectors.
PSE has examined and graded over 50,000 stamps, and carefully
observed where the system worked, and where improvements were needed.
If there were inconsistencies, changes were made.
In the spring of 2002, PSE began publishing the
Stamp Market Quarterly, a guide to the market value of the most
collectible U.S. stamps. This was followed by an establishment of the
PSE Set Registry, where the nation's finest sets can be listed and
compared, and by the PSE Population Report, listing by grade the
quantities of stamps graded by the PSE. In late 2005, the Philatelic
Foundation in New York adopted PSE's numerical scale for the grading
of U.S. stamps and in 2006, Scott Publishing Co. also recognized that
scale.
This will examine how U.S. stamps are graded, and
present PSE's model for fairly and impartially evaluating single U.S.
stamps and coil pairs.
What is Grading?
Grading is the process of grouping stamps of a
given Scott number and state, (e.g., used, Mint OGNH, Mint OGPH,
etc.) with a similar fair market value into discrete categories. For
example, a used Scott no. 1 worth in the $150 to $200 range would
fall into the "good" category, one that might sell in the $300 to
$400 category would be "fine," a $500 to $600 copy might be graded
"very fine" and a $2,500 example would likely qualify as "Superb."
because mint stamps are usually worth more than used stamps or
because some lower grade used stamps are worth more than higher grade
mint examples (e.g. Scott no. 39) or because of the large premium
afforded to "never hinged" stamps, comparisons are only valid among
stamps of the same state.
It is important to appreciate that a stamp can
achieve the grade of "fine 70" through two very different paths. The
stamp can be completely sound (faultless) and have its design close
to the perforations on one or two sides. Conversely, the stamp may
have near perfect centering, yet have a fault such as a crease, a
thin, or a toning spot, and still have a net grade of "fine."
What grading actually attempts to say is that the
two stamps have approximately equal market value. Not to all
collectors at all times, of course, but across the broad market there
should be informed buyers willing to pay a "fine" price for either
stamp within a reasonable length of time. There would of course be
collectors who would not want a faulty stamp at any price.
Conversely, there are other collectors who are interested in a
well-centered front, and would consider an XF-Superb centered stamp
with a thin to be well worth a "fine" price.
If the above sounds somewhat mercenary, then a
reality check is in order. The collectibles business revolves around
money. It is the common denominator, which enables dealers and
collectors to interact and conduct commerce. To compare a faultless,
off-center stamp to a perfectly centered stamp with a fault is
impossible without using market value as an arbiter.
Despite the aura of precision that the use of
numerals lends to grading, it is important to keep in mind that
grading remains both an art and a science. Grades are essentially
ranges of condition, and any given grade contains both "low end"
examples that just made the grade, to "high end" examples that just
missed the next higher grade.
In reality, there is far greater difference
between the worst XF 90 and the best XF 90 than there is between the
best XF 90 and the worst XF-Superb 95. This is easy to see. Take any
stamp, for example a Scott no. 231 (a two cent Colombian) and imagine
arranging all copies that exist from worst to best. Then draw lines
between the grade ranges separating the 90s from the 95s, the 95s
from the 98s, etc. The two stamps on either side of the 90/95 line
are essentially the same stamp! In fact, a number of stamps on either
side of the 90/95 line are probably nearly indistinguishable. Yet,
several hundred stamps may separate the worst XF 90 from the best XF
90.
Add to this the fact that two different people may
not arrange all these stamps in the exact same order and the fact
that you yourself may not arrange these stamps in the same order if
you had to do it a second time. In essence, while grading is the best
attempt to place a relative rank on a stamp's condition and value, it
is by no means absolute. Two experts may have legitimate differences
of opinion, and those stamps near the dividing line between grades
are particularly vulnerable to disagreement.
Which Stamps are not
Graded?
PSE does not grade multiples from sheet stamps,
booklet panes, or coil strips of three or more stamps. Nor does PSE
grade fake or altered or counterfeit stamps. Common items which fall
into this category include fake early coils, mid-19th century used
stamps which have had their cancels removed to simulate unused
stamps, 19th century proofs which have been altered to resemble
issued stamps, fake Scott no. 461 and fake Scott no. 519.
Finally, PSE does not grade damaged stamps, i.e.,
ones which are grossly faulty or extensively repaired. Market values
(if they even exist) for these types of stamps are simply too
inconsistent and arbitrary.
The Grading System
A number of diverse factors come into play when
determining the grade of a stamp, and any system that compresses
these factors into a single numerical (or adjectival) grade is
necessarily complex. However, such challenges are not unique to
stamps.
The grading of sports cards attempts to balance
such diverse attributes as edges, corners, surfaces, centering and
registration quality, all of which must be weighed to arrive at a
single, numerical grade. Similarly, rare coins must have attributes
such as strike, surface preservation (marks, scratches), luster, and
toning (eye appeal), all of which must be considered when determining
a final grade. Difficult? Yes. Controversial? At times. Impossible?
No.
The preliminary grade of a stamp has two
components:
Soundness
(the presence or absence of faults.)
and
Centering
(the balance among the four margins.)
This concept of combining soundness and centering
is the heart of the PSE Grading System. For faultless stamps, the
preliminary grade is the same as the centering grade. For stamps with
faults, the PSE Grading System is an attempt to model the value that
the marketplace assigns to stamps with faults.
PSE appreciates the fact that all collectors will
not view faults equally. What to some might be a "fatal flaw" would
to others be "no big deal," at least insofar as their willingness to
add the stamp to their collection.
It is a fact that a significant majority of
pre-1890 U.S. stamps and a majority of 1890-1920 stamps have a fault
of some sort. To shrug off that portion of the market with statements
like "faults decrease the value of the stamp" and "let the market
determine how faulty stamps should be valued" begs the question and
leaves all but fully knowledgeable collectors at a severe
disadvantage.
A third component, eye
appeal (color, impression, cancellation)
allows for some adjustment of the preliminary grade to arrive at the
final grade.
For mint (unused) stamps, a notion is made of the
gum condition. That notation follows the grade of the stamp, and is
not a factor in determining the grade. it does however, play a major
role in determining the fair market value of a stamp.
Reprinted from 2006 edition "A Guide to Grading
and Expertizing United States Postage Stamps"
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