EBay is a great place to buy all types of collectable coins but, as with any other sales venue, buyers should be cautious and try to educate themselves on the specifics of coin grading.  OVERGRADING of coins is one of the biggest challenges on eBay!   We don't feel that this is malicious or intentional but, most of the time, we feel that it reflects a lack of education and/or expereince on the part of many sellers.  Our experience has been that about 40 percent (based on more than 1,000 uncertified, uncirculated coin purchases which we have made on eBay over the past year), have had some degree of wear and thus, they were not uncirculated as they were supposed to be!  This is not just our opinion as we have submitted hundreds of these coins for professional certification and they have come back anywhere between AU58 and EF45 (Almost Uncircualted to Extremely Fine, both high circulated grades).  We have also seen circulated coins overgraded as to their actual condition.

This is not just a matter of grade interpretation.  While the American Numismatic Assoc. (ANA) has published standards, and there are very similar published standards from some of the major Grading Services, such as PCGS (Professional Coin Grading Service) and NGC (Numismatic Guaranty Corp.), experiened coin collectors know that grading is still subject to human opinions and variations.  However, this is not as widespread as many believe.  Sure, the major Grading Services may vary in their grading of individual coins, but we have found that this is rarely more than one grade level.  For example, one may grade a coin MS63, another may grade it MS64, and still another MS62, etc.  Many refer to the Big Four major grading companies - PCGS, NGC mentioned above, along with the oldest one ANACS, and ICG - Independent Coin Grading Co.

Major publications such as the Red Book (A Guide Book of U.S. Coins), have good guidelines for the grading of  U.S. coins.   Referring to these, and other similar publications, will help a coin buyer to be aware of what a properly graded coin should look like.  However, after a very active year on eBay, making over 2,000 coin purchases, we can advise buyers on the following specifics;

A)  It is difficult to tell the exact grade of a coin from photos on eBay, no matter how good or large they are.  Pictures simply cannot duplicate the subtleties of luster determination, 3-dimesional views, etc., that can be seen when holding a coin, by the edges, up to proper lighting for a close and personal look.   We have bought numerous coins on eBay that the sellers assured us were uncirculated, and this includes some coins from very experienced coin dealers, only to receive them and see the slight tell-tale signs of light circulation.  Their bid photos looked Uncirculated!.   Our advice is this, when buying a raw coin on eBay - unless you know the Seller well and/or have good personal experience with their accurate grading, it is best to assume, with your bid pricing, that the coin is one grade level below the listed grade. For example, if the coin is listed as EF, assume it is VF; if the coin is listed as MS63, assume that it is MS60-61 and unless the photos are really sharp, you may want to assume a high AU grade.  We have bought everything from Cents to gold coins on eBay and nearly every denomination in between, and we have found this grading challenge with every coin denomination!

B)  Be very careful when buying certain premium coins, such as 1922-No D or -Weak D Lincoln Cents, and 1981-S Type 2 Proof coins (just to cite 2 brief examples here).  There is widespread misinterpretation on eBay, again, we feel from lack of experience.  For example, with 1922-D Cents many understand that a less-than-distinct  D mint mark means Weak D, but this is often not the case.  Since a good Weak D cent can be worth 10-to-20 times the price of a standard 1922-D it is important to be sure!   Unfortunately, we and other buyers, have learned this the hard way buying many so-called Weak D 1922-D cents on eBay only to find that they are normal 1922-D cents with wear or a light strike from the Mint. 
The same goes for 1981-S Proof coins - many mistakenly assume that if the S mint mark is clear and readable then this means that the coin is a Type 2, which is worth 10-20 times the price of a regular Type 1.  However, this is not always the case.   It is more the shape of the S rather than its clarity that determines the Type.  Here again, we have learned the hard way, buying several so-called Type 2 S.B. Anthony 1981-S Proof dollars, among other coins, because the seller saw a clear S, only to learn that the coins were Type 1.  
We have educated ourselves on what these coins, properly graded, should look like and we now bid accordingly.  If the pictures on eBay are not clear we ask the seller for better ones, or we make our bid price match the likely case of the lower priced coin.

We could go on in this same regard with many other examples.  Recently, we have found (after buying several hundred) that about half of raw, older Lincoln Cents, 1909-1935, being sold on eBay as uncirculated are not.  What is the answer?  That takes us to our final item,

C)  A properly certified and encapsulated coin is worth an extra premium!  When a coin has been inspected, authenticated, graded, and encapsulated by a major third-party grading service, then you are assured of getting the true coin that you are buying.  However, here again, be careful on eBay.  Our advice is to stay with purchasing coins graded by the major grading companies noted above - PCGS, NGC, ANACS, and ICG (some refer to these as the top level grading firms).

The market also recognizes a 2nd level of grading companies, such as NTC,  SEGS, PNGS, AGC, PCI, UGS, etc., but be careful as we have found that these sometimes tend to grade coins one or 2 levels too high, so that when you submit them to one of the four major companies (for what is called a crossover) your MS65 coin comes back MS63, etc..  Watch the prices that these 2nd Level graded coins get on eBay and you will see that the the market usually recognizes this fact by generally paying less than similar coins from the major firms. 

Lastly, be very careful with what some call the 3rd level grading companies, many of which existing only on eBay, such as those not listed above.  Some of these tend to grade just about every coin as MS70 or PR70.  I'm not sure why as they tend to come from large, experienced coin dealers - maybe they use the technical grading system, which says that the condition in which you get a coin from the Mint is the top grade, thus if you get an uncirculated coin from the Mint with nicks and bag marks on it, it is still an MS70 as this is how the Mint made it.  Just be aware that nearly all dealers and collectors use the market grading system which says that the grade of a coin is based on its appearance, thus the Mint can produce uncirculated coins with grades in the low MS60's, right from the Mint.  The problem may also be that these tend to be coin dealers grading their own coins!

It is very helpful to refer to free websites with coin grades and values, such as pcgs dot com, for pricing and grades of certified coins from the top grading services, and ngccoin dot com, for grades and quantities of each coin graded.  If you look on these sites and the highest grade for a particular uncirculated coin is, for example, MS67, and then you see eBay bids for the same coin in MS70 (we see this all the time), then be careful as chances are it will properly grade well below MS70.   Also, if the PCGS website has a big price difference between one grade and the next grade then be careful with higher graded coins unless they are from one of the major grading services.  Sometimes, one grade level, such as MS64 to MS65, or AU55 to MS60, can mean a huge price difference.

Well, thanks for reading this far and letting us vent a little.   EBay is a great place to buy and sell coins, just educate yourself and be properly cautious.

Charles  (eBay ID  KAJNumismatics)
KAJ Numismatics and Collectables Co.
Sept. 1, 2006