How Important is Grading?

Hi Morgan,

Much like in the world of Numismatics, condition is everything.

The way stamp grading has evolved in philately, though, it is not widely accepted/used. Some people want to get the very best stamp and are happy to count on an grading service to tell them how good the condition is. A system of values tied to those grades but the values given are often far far above the normal cost of the stamp so that chasing highly graded stamps is a very expensive (and many would say relatively meaningless) activity.

Many people happily hunt for the best example of a stamp without the use of a grading company.

Here is an example.

The mint stamp has a catalog value of $1.

You might get a perfect ungraded example for $0.25-2.

You could buy a graded one for $30-150.

Of course part of the benefit of depending on someone else to do the grading is that you don't have to hunt and search for the best stamp, just pay the asking price and it is yours.

One problem I have with the grading of stamps, and this is a personal opinion of mine which not everyone may agree with is that the focus is almost entirely on the centering of a stamp. The fact is there are a number of concerns regarding a grade such as the quality of the printing and the general state of preservation of the stamp. A stamp may be graded as being a perfect grade by a grading company because of excellent centering but it could be the stamp is over-inked or under-inked.

Another problem is that grading primarily focuses only on mint postage stamps. If you are looking for what you might call "circulated" or used stamps, they are usually not graded. If you have chosen to collect these stamps there is no way to get them graded. In the numismatic world it would be like only being able to buy a graded coin if it were in mint state, which of course would be silly.

It all comes down to whether or not you want to or can afford to collect only graded stamps. In the world of Philately grading is only practiced in the US that I am aware of and it is a niche market.

I hope that helps to give you some perspective on the grading of stamps as it is practiced today.

Welcome to The Stamp Forum!

Thanks for setting up this new thread, Steve (tomiseksj) -- this is just what I was hoping for....

smauggie, is it really true that used stamps are only rarely graded?  It seems to me that I have seen plenty of ads in Linn's Stamp News over the past few years that show both used and unused graded U.S. stamps, generally classic issues.

I also recall that @falshung has previously made posts some time ago about buying a few dollars worth of catalogue value for U.S. stamps at hundreds of times their generally accepted values as non-graded stamps.

Anyway, this is a great discussion to have, for sure!

[Posted by former member Morgan (@n9n9n9n9)]

As an outsider to the stamp collecting world I've only heard about a few different stamps, the penny black and inverted jenny. Is it possible to collect these or is that a stupid question?

Here is an example of PSE prices by grade showing the variation

Grading has absolutely no value for the general hobby in its present form.
The focus is almost entirely on "centering"
Until there some guidelines on
Color intensity
Evenness of perforations
Overall Condition
Freshness of paper 
Presence of scrapes, creases, thin spots, cuts etc.
Quality of gum
and Centering last - why
There are some classics the the perfs will always cut into the design. That does not make it any less desirable and it brings "centering" into question as being important.
Plus centering is very subjective.

How giving a "Gem 100" rating to a "perfectly centered" stamp printed in the last 30 years suddenly increases its value from $0.25 to $250 is nothing short of trying to fool unwary collectors into thinking they have an investment stamp. Is there an authoritative definition of "Gem" quality?
The Gem craze has pushed stamps that were selling for $100's a few years ago into $1000's today. Mind you if you did spend $5 - $10 to get your stamp graded 98-100 some years ago, now would be a good time to cash in on this craze.


Grading is not new, coin & comic graders have very detailed grading criteria even including restorations.
www.cgccomics.com/grading-scale/
In the last few years, it seems that certain companies have moved from the certification field to grading as the potential for profits is so much greater.
It not to say that all companies have the same ethics, some still live in the real world.


For anyone in doubt about "centering", the above chart is from a well known catalog on stamp grading.
It clearly shows the criteria applied BUT by an incredible coincidence, the base stamp and the design are the SAME in all the pictures! - Photoshop?

Luckily these is some sanity out there.

This catalog publisher notes the stamp on the left is at it appears in the catalog.
But since your stamp will rarely match the catalog quality, they show the discounted value of what you probably have - up to -95% of the CV
If you happen to have a nicer one then they give it at least 30%+ premium.

As mentioned the whole grading thing seems more of a US phenomena and it is certainly working in the case of those 98-100 grade stamps on prestige auctions.
Somebody has the coin to spend but then when you buy a $1000 Iphone or that average $50M  car and pay $4/gal to drive it, somebody who reaps the profit can buy graded stamps.

So if you feel graded stamps are the way to go, consider the source of the grading and be more concerned with its comparative value.

Does all of this mean that my retirement isn't secure?

And here I thought I was set for life! 

The US 482 shown above by tomiseksj was sold in an auction

1916, 2¢ carmine, type I, imperf (Scott 482), o.g., never hinged, immense margins of epic proportions; an eye catching World Class GEM showing large portions of surrounding 8 stamps; unlisted in the SMQ pricing guide above the grade of GEM-100; this 100J is matchless, Superb, with 2007 P.S.E. certificate graded Gem 100J.
SMQ Gem 100J; $75.
Scott $2.
Estimate $100 - 150

It sold for $90
So lets see the math here
You take a block of 9 X Sc482's and get the scissors out
You then send it to PSE - grading, special fees, freight there and back - $30-50
Probably a 10-20% selling fee and the cost of sending to the auction house.

So the astute seller makes maybe $25 on the deal, not bad but ...
www.usphila.com would probably give a block of nine a value of at least $200-$300

On the "bright" side the buyer got a stamp  for a mere $90 he could buy mint with nice margins for under $2.
$5 or less would get you 481, 482 and 483

The same auction had 3 more of these 100J graded cut imperfs. (does the J stand for Junk?)
If someone gave me that stamp, the first thing I would do is cut the stamp out and leave nice wide margins all around. Who actually likes to collect them with parts of others all around.

My last thought on this subject, there are some good US associations and independent dealers that do not grade and simply described the offer as it is but some major auction houses are now on the grading bandwagon along with the usual e-types so this grading craze may be proliferating.
There are obviously enough unsuspecting collectors out there that have the means to fuel it.
I have probably should have saved some of those gems I sold .......


The modern $0.50 pair given a value of $250
Can used stamps be GEM quality - marks and no gum??
Do short perfs fall into the GEM criteria??