Thursday, May 22, 2008

The Grading Service Vs. The Grading Business

Grading cards started as a practice to help collectors identify things they may not see with the naked eye when buying cards over the internet and in person. Basically, it protected the buyer from unforseen condition problems when they don’t have the card in their hands (eBay) or when the card is not necessarily available to look at outside of a case (high end buys at shows). In my opinion it went from a service geared towards protecting the buyer to a service geared towards helping the seller make money.

High grade cards carry a huge premium, as expected, and are the staples of many seller's inventories. I don’t really have a problem with people buying high grade cards, because it is only natural that the high grade ones sell for more money. I have a problem with the services themselves. The reason I say this is because I see certain sellers on eBay with a plethora of pristine graded cards from PSA and BGS when the population reports for those cards show that a high grade is usually outside the status quo. I also see BGS selling their own cards as discussed before, which creates a conflict of interest, and I start to wonder how much of grading is being the best at grading a card and how much is being good business people.

Being a good business person means you reward your good customers and still maintain your quality of product and your ethics. This makes me think that services who receive thousands of submissions from a person are more inclined to reward them with higher grades because they spend thousands of dollars on the service. Now, im not saying they take cards that should be a 5 and make them a 9.5, but I question whether they look at every card close enough to determine whether it is a 9 or a 9.5. Once its in that case, no one will question the authenticity of the grade because collectors know that it isnt worth the idea in their head. Yet, I can see that a collector submitting 1000 cards per week would be more likely to get a 9.5 on those 9s because he/she is spending so much money. I also see that the guy who has nothing but PSA 10s cant possibly have THAT many high end cards in THAT condition. It spreads beyond possibilty that every card he gets is a PSA 10, especially when most of them are bought from other collectors.

Im sure a lot of you are wondering if I have ever graded a card or if I own graded cards. The answer is yes and yes. I own two graded cards, an 8.5 2002 Joe Mauer Chrome Auto, and a BVG 4 1953 Eddie Mathews Topps. The Mathews is graded because it was losing condition sitting how it was in my collection, and the graded case protects that. The Mauer I bought graded because the set is so condition sensitive that I knew I couldn’t trust eBay to provide me with a good card. 8.5 was cost effective so I bought that one. As for grading cards I have only used it once for profit. I graded my Topps Finest Santana Rookie and got a 9.5, then sold it for a ton.

Do I say that grading should go away? No, I think it is a necessary service. Do I think that the sheep collectors should maybe question the business part of it before buying? Hell yes, all is not what it seems. In fact, I think that "Sports Card Buying: All is Not What it Seems" (AINWIS) should be the slogan of the industry. There is so much deception, that I think we have just accepted it. Its like the OJ Mayo situation in that we all know its going on behind the scenes, but we will wait for that big story before taking action. Until then, its all swept under the rug.

9 comments:

  1. I'm not entirely convinced grading is a necessary service. It's certainly a useful service though or at least was at one time.

    Now, much like everything else about this hobby, it's become a way to make money. Do I think there are grades being inflated? Absolutely.

    Beckett and PSA are a business and to them good business means making as much money as possible regardless of whether it's in the best interest of the buyer or the hobby in fact.

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  2. I really dont think there are too many people left in the hobby who collect for the fun of it. Most people just see it as a fun way to make money, others scam their way to a few c-notes.

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  3. Yeah I'm inclined to agree with you there.

    I used to collect cards as a kid and then lost interest for a while, then started up again a few months ago and I couldn't believe how different the hobby is today.

    It's totally unrecognizable from what it used to be just 15 years ago.

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  4. Have you read the book "The Card"? There's some very interesting information about Mastro auctions and PSA. I've heard of many instances where a big dealer like Mastro will send in thousands of cards to a grading service and basically tell them that if they don't get the grade they think they deserve they'll take their business to someone who will give them the high grades.

    I'm sure that those types of unethical business practices take place all the time between the powerful hobby guys. I've heard rumbling's about Beckett for more than 20 years. Another huge issue I have with the grading services is who exactly does the grading. There's a comic book grading company that employed high school kids to grade books.

    The hobby needs more people like yourself. The fact that Beckett sells their own graded material is the definition of conflict of interests. With out some checks and balances the hobby will continue to atrophy and eventually die. and it's the fault of the industry "leaders". If the baseball card industry was a bigger business there would be many federal investigations of their unethical behavior.

    Scott

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  5. Grading is a corporate invasion of the hobby that basically artificially inflates prices way over and above what the card is worth.
    See my take on it here: http://completist.wordpress.com/2007/11/27/guest-editorial-grading-i-give-it-a-d/

    GCA

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  6. That is a sweet article, love it. I think its more the fact that a lot of collectors who dont have access to the info that we do, actually believe most of the crap that Beckett throws out to them. "Oh my god, my player X card has a book value of 200 dollars!" *checks eBay* "Crap it only sells for 10."

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  7. Nice piece GCA and dead on too.

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  8. http://www.beckett.com/news/reportcard/archive.asp?a=9543&s=62

    Don't be scared to post this link.

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  9. You should seriously look into there baseball breaks as well. I know back in 06 i got a issue of beckett and they did a box of topps triple thread and they pulled a 1/1 white whale triple auto possible jersey patch i dont remember if it had the jersey patch its been awhile. but I know it was a triple auto of barry bonds,arod and someone else.

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