The "Secure" in PCGS' new Secure Plus grading tier

By Steve Roach
First published in the April 26, 2010, issue of Coin World

Last week's market analysis focused on the possible market impact of the new "plus" grade at Professional Coin Grading Service and Numismatic Guaranty Corp. This week we will focus on the second prong of the PCGS announcement of Secure Plus. Specifically, Secure Plus uses digital technology to capture a unique "fingerprint" of each coin, to be entered into a permanent data base.

The system is supposed to catch whether a coin has been artificially toned or processed in an effort to get a higher grade, also called coin doctoring. PCGS officials have said that for Secure-Plus coins, "Neither the coin's appearance nor its grade can be changed without flagging the system."

Secure-Plus is optional for all coins except for coins submitted under two grading tiers: Rarities, coins submitted with a maximum coin value of $200,000, and Ultra Rarities, with unlimited values. PCGS Secure Plus is the only option for these coins.

PCGS has stated the technology will provide a better understanding of rarity for top coins by eliminating resubmissions, and the problem of the same coin reappearing on the market – with different looks and grades at different times – will be eliminated.

Ultimately, PCGS believes that the program has the potential to achieve five goals: "More precise and consistent grading; improved detection of altered coins; less chance of 'gradeflation'; more likely recovery if a Secure Plus coin is ever lost or stolen; and increased value of high-end coins within each grade."

The digital fingerprinting concept also has the potential to protect the high end of the market from the dangerous counterfeit coins emerging from China. But, because for most coins it is an opt-in process, it will take some time to determine what its impact will be, and generally, Chinese counterfeiters have not successfully replicated high-end coins.

Additionally, it remains to be seen whether dealers and major auction houses will use the Secure Plus tier as it may alienate one of the key groups of coin buyers and bidders at auction – the coin doctors who pay strong premiums for coins they can upgrade.