A BANKNOTE'S GRADE is an essential element in how every collector approaches the wonderful hobby of paper money collecting. A new collector will soon decide whether he or she prefers to collect high-grade notes which look and feel “new” as when they were printed, or perhaps somewhat circulated notes which show the scars of their circulation in a particular country and at a given time, maybe many years and miles away.
A seasoned collector will also often need to decide whether a scarce or rare note can be found in very high grades and if it is worth enduring the delay and the high cost involved in waiting until such better and more costly high-grade examples are available.
Because a banknote satisfies different collector needs depending on its grade, and because its value varies considerably also depending on its grade, the ability to grade is an essential skill for everyone involved in this hobby. Every collector should make a special effort to learn about grading. Every collector should learn how to grade the notes he is buying or considering buying on a scale that will normally go from “poor” to “uncirculated”. He should also learn to grade notes which don’t fit neatly in a grading category and may therefore be between categories, such as notes which grade “fine/very fine” or “extra fine plus”.
A collector should also form a judgement as to whether certain features of a note, such as the presence of pinholes, a tear or an edge repair affect the note’s overall grade or should instead be mentioned separately without lowering the overall grade.
A collector soon discovers that every dealer, every auction house and every fellow collector use slightly or sometimes largely different grading systems. A note graded “almost uncirculated” by a US auction house might look “extra fine” to a Korean collector and just “very fine plus” to an English dealer, or vice versa.
A German dealer may lower an otherwise “uncirculated” note to “almost uncirculated” due to the presence of pinholes, while a French dealer may grade the same note “uncirculated” and just mention that it has pinholes as an added comment.
Therefore, a collector will need to understand the grading system of each of his sources of banknotes, particularly if these are remote and he cannot verify in person the quality of the notes.
These differences of opinion about grades from different sources – dealers, auction houses, fellow collectors – together with the fact that collectors buy a high percentage of their notes remotely, without the benefit of first-hand inspection, are the reason-of-being of professional grading services like International Currency Grading (ICG).
At ICG, we also have our “own” grading philosophy, and it is based on three basic principles:
- Attention to detail. We will describe every feature of a banknote that is relevant to its grading, not overlooking key aspects such as whether a note has been cleaned or pressed, whether it has pinholes or nicks or whether it may have been trimmed. All of these faults can be difficult to spot at first sight or on certain notes, particularly if they are encapsulated.
- Conservative grading. When grading notes, we at ICG try to assign grades which are accurate and which fit the descriptions of our grading scale. But it can sometimes be hard to agree on what constitutes accurate grading in a field where different collectors and dealers take different views. For that reason, when in doubt, we will be conservative. Our philosophy is to avoid overgrading, because excessively optimistic grading is a threat to the hobby which will turn away new collectors and disappoint seasoned collectors.
- Consistency. Having settled on a grading system which is detailed and generally conservative, we put special emphasis on being consistent. The graders at ICG are trained to apply the same grading principles on every note we grade, so that when collectors compare notes which carry the same ICG grade they should not be able to find any meaningful grading differences. An ICG “AU+/ 58” note will always look like every other ICG/58 note.
We encourage you to learn more about the ICG grading standards by clicking here.