What Would You Pay For This Stamp

I think Daryl has a valid point here. I admit, this is also something that bothers me immensely.

It seems to be a rather common practice among many of the very high end dealers and auction houses to have more several "less than pristine items" at an inflated price (i.e., at or above catalog value, even though there are clearly faults or not close to being VF). Amazingly, they are STILL described as "fresh example", "exceptional"... I think they've gotten so used to doing this, they don't even realize they are doing it. I don't believe this "blame it on the lot describer" excuse.

Everybody always Oooos and Ahhhs over the top notch items in the inventory or in the auction, and then goes goo-goo over the realized price. What I notice in these auction listings are clearly faulty (minor faults) or not well-centered items that get such high estimates (i.e., nearly at or even above catalog value). The prices realized afterwards clearly show these lesser items don't get a hammer price close to the estimate; and when they do this in their stores, the item just sits there (you all know my phrase "fishing for fools"). I don't think they are really trying to rip off anyone. My point is, I don't think they are actually trying to sell those "junk" items.

Is this some ploy to try to convince me that since these lower quality stamps have such high estimate/retail value, then clearly I should be bidding even higher for the high grade material because it is obviously worth significantly more?

To be fair, there are a number of high-end dealers who DO NOT do this. They sell lower grade material at catalog-reasonable prices.

I don't have a problem with dealers selling graded material at exorbitant (my opinion) prices. But it does annoy me when some "sell" much lower grade or faulty material at "exorbitant" prices. To me, it's an issue of business practice, not personal.

Wow this thread really got the feathers flying..quite unusual for the SCF ! I would not say I would NEVER name names...but as you can see it does get sensitive( You U.S. collectors !)

Even when the condition of the stamp is adequately described, the catalog value given for the stamp is often the standard value given in Scott which is for VF stamps.

When purchasing a high-end stamp, this can end up being quite a difference.

The ebay seller discussed above wrote, 'Scott Pricing Supplement for Spring 2009 shows this stamp at $180 for a 98 and $60 for a 95 Grade. This stamp sure looks like a 98 and has very wide margins on all side. The color is also much deeper and darker than most examples of this stamp.'

As someone with very little knowledge of US stamps, I'm baffled. I'm wondering what this grading system means, as I've never heard of it before. What's a 95 Grade? And, since the price is far higher, what is a 98 Grade? How can one tell the difference?

jimjamtwo,

Several years ago someone came up with the idea that there must be a better way to grade stamps than F, VF, XF etc. So, they came up with this numbering system, a scale of up to 100 points for a superb and jumbo copy. Shortly after they came up with encapsulating the stamp certifying that is a "98" or whatever.

Problems are,
1. Once encapsulated, the certification becomes invalid if the capsule is broken
2. You can't get it in your hands to see or test for your self.
3. The grading and certification process is still subjective.

I made the mistake of buying an expensive stamp (U.S. 293) that was graded and encapsulated. A few years later I decided to put that stamp in my album and broke the capsule. Now having it in hand I examined it and found a major fault and a couple of minor faults with the stamp. I contacted the dealer and the company that certified the stamp and because I broke the capsule, all bets were off. I still have the stamp but will never buy another encapsulated stamp again.

The grading system can work but only if graded by a group/company that's trustworthy as several have gone out of business.

JMO

Art

Very informative answer there, Art. Thanks a lot!

Hmmm, I wonder what a 1 looks like!

Don't think I'd pay anything for it. Already got one.

edit: Post #1000 is a long-winded one!




Finding the history behind all of this has been a challenge. Either no one has written the history behind stamp grading, or no one knows. I did find quite a few references to PSE (Professional Stamp Experts) as it pertains to guidelines for grading. They published a guide back around 2000 that seems to have set the industry standard.

Does anyone have a copy to PSE's guide to stamp grading?

As for encapsulation, I'm in full agreement with Art on this one. If I can't touch the stamp in question, and examine it without obstruction, I'm not interested.

PSE also uses it's grading system in conjunction with SMQ (Stamp Market Quarterly - also a PSE service). Again, the history of SMQ is a bit hazy, but my best guess is that prices listed in SMQ are an average of prices realized at auction. There's a lot of effort that goes into SMQ, and I see some benefit to it.

HOWEVER, SMQ is derived only from certified and graded examples of stamps. PSE's stamp grading fee structure is so prohibitive, that the average collector cannot afford to pay for certification and grading.

See: http://www.psestamp.com/servicesandfees.chtml

One question I would like answered about SMQ is this: Does the PSE census of certified, graded stamps impact the price of said stamp?

Coming full circle ... PSE/SMQ lists the prices of #554 in various grades. All of these listings are for graded stamps.

http://www.psestamp.com/prices/fram...ype_=1922-25 Regular Issues (551-573)

Do they have to be graded by PSE in order to be included in the price analysis?

If the answer to the previous question is 'yes', then how many #554 stamps have been graded by PSE?
(Answer: 175 http://www.psestamp.com/pop/detail.aspx?c=19152)

Compared to how many stamps were issued, what percentage does that work out to be? Does this accurately reflect the rarity of a Superb 98 #554?

I started out wanting to give my 2 cents, but ended up giving 2 dollars. This is where I think this thread should have gone in the first place. Rather than pick on the dealer, let's look at the certification services who charge an outrageous amount of money, then uses it's own census data to create a price structure.

And I'm not just talking about PSE. APS certification services are just as outrageous. How can they call themselves a non-profit, anyways?

It all seems artificial to me ...

Brian

From my understanding on how the grading of Stamps started was from Coin Dealers who also began to Deal Stamps. Also I believe that encapsulating stamps is also from the Coin Dealers as Coins need some bulky mount anyways. As far as SMQ goes, I strongly believe that it was started by a group of investment collectors trying to recoup their losses from big investments over the last 30 years as many I'm sure planned on a nice retirement bonus, only to find out they are worth a lot less than planned.
The reason I wanted to keep it about the Dealer is because there are a few of these Dealers around and their pricing is absurd and ridiculous, if they had clientele for these items then we probably wouldn't see them on ebay now would we ?

Here is a good article on Stamp Grading written by Ken Lawrence, some very good points.

http://www.virtualstampclub.com/grading_kl.html

I'm torn on whether I agree or disagree with you on this. On Ebay/Bidstart listings, I could name the majority of the dealers who use SMQ religiously, and price accordingly, so in that respect, I agree with you.

But as it pertains to storefront dealers or those who deal only at stamp shows and exhibitions, it's rare to find a dealer who does not price according to SMQ, including non-certified/graded stamps.

If anyone else has something to add about the history of grading and SMQ, I'd love to hear more!

Brian

Brian, as dealers go it's not hard to understand why they use SMQ for pricing. If a Dealer has the investment capitol to utilize getting the item certified and graded to their financial gain then of course it might be worthwhile to roll the dice on. My issue on the pricing for that particular item was simply that I'm purely positive that he spent nowhere near the sum he's asking along with the fact that 100X mark up is too much. I know that items like the one this thread was about do and should have a premium for being in the condition it's in....but how much ?

SMQ started in 2002.
Grading began in 1998

One of the big problems with the pricing is the limited sample sizes involved. The 554 census shows 16 OGNH rated at 98. The question is how many more exist that have not been graded, I suspect a significant number. As more are graded what happens to the value?

Just to set the record straight, its was PSE (Professional Stamp Experts) who graded my 293. I don't trust any encapsulated stamp and won't trust PSE certs.

Art

Is there anyway at all to tamper with the holder? I know that's a serious problem in the baseball card world