Third Party and Numerical Grading of Stamps
Most stamp collectors pay careful attention to the condition of their stamps. One of the first lessons is that a sound stamp is preferable to a damaged stamp; it follows for most collectors that a well-centered stamp beats an off-centered stamp, that color and intact perforations matter, and so on. Stamps in better condition are worth more than the same stamp in lesser condition; it’s a simple market force.
The hobby developed a straightforward nomenclature for stamp condition decades ago – fine, very fine, extremely fine – and some additional terms have appeared across that spectrum (very good, fine/very fine, superb). These terms have been widely used in stamp dealer price lists, at auction, at shows, and online.
Only relatively recently (starting after 2000) and primarily in the area of United States material, has numerical grading by expert services become a part of philately. Accordingly, this article is directed to United States stamps (though at least one service will grade Canadian stamps and there is some history of grading U.S. possessions material and sometimes other international stamps).
In the parlance of this article, a “graded” stamp has been submitted to a recognized expertizing service (for example, the Philatelic Foundation (PF), Professional Stamp Experts (PSE), or Philatelic Stamp Authentication and Grading (PSAG), certified as authentic, and given a numerical grade from 10 to 100 based on its condition.
Stamps may also in some instances be “slabbed” or “encapsulated” – encased in a plastic holder – to prevent changes in condition and for convenience in handling. PSE started to discontinue slabbing due to supply constraints and low demand in 2021.
The American Philatelic Expertizing Service (APEX) does NOT grade or slab stamps.
Graded stamps are now widely available in the marketplace, offered in dealer stocks, online, and in public auctions.
Figure 1. A 2022 certificate with a grade of 95 from Professional Stamp Experts for the $5 Alexander Hamilton stamp (Scott 1053) of 1956. (Images courtesy of APS StampStore.)
The practice of a single numerical grade for a collectible started with coins, where numerical grading and “slabbing” has been commonplace since the 1980s. In the comparatively liquid coin market, many U.S. coins now have a “sight unseen” market – where dealers will buy and sell graded coins at set prices without even seeing the coins themselves, all based on reliance on the certified grade.
Grading has not met with the same acceptance in the stamp marketplace, and I think for good reason.
To reach a single “net” grade for a stamp, a grading service must consider multiple factors: generally speaking, soundness and condition. Each grading service offers details on their process, which generally involves assessing the centering of a stamp, with point deductions for faults.
PSAG states on its web page that “[t]he most important and easiest to understand element of grading is the relative centering of a stamp.” The PF, by contrast, describes grading, saying “[t]he Foundation will assign a number to a stamp which gives our evaluation of a stamp’s centering, margins and overall condition.” PSAG states more generally that “[o]ur evaluation averages most of these effects to get an overall determination acceptable to the vast majority of collectors.”
Some services also allow for additional adjustments. For example, PSE uses “eye appeal” as a third component, incorporating color, impression, freshness and, for used stamps, cancellation. Each service has its own criteria and its own formula for reaching a single net grade.
Adding to the complexity, some of the expertizing services will not grade stamps with certain faults or problems (for example, PSAG will not grade reperforated stamps), and in some cases, marginal markings (such as a guideline appearing in the perforations of a stamp) may be taken into consideration. Different graders may also treat different stamp issues differently, for example, the 1857 issue, which generally has narrow margins.
This is all a long way of saying that not all stamps in a given numerical grade are equal for any given collector. The “net grade” system creates the prospect of a poorly centered but faultless stamp being treated equally to a well-centered but faulty stamp.
Individual collectors may have widely varying opinions on the severity of specific faults and their impact on a stamp’s condition (and, by extension, value). For example, a collector may not worry much about short perf but be very sensitive about thin spots, or vice versa. Accordingly, I recommend always carefully examining graded stamps for faults, just to ensure that your own individual preferences are met.
One premise of a single “net” grade for a stamp is for pricing purposes.
PSE publishes “Stamp Market Quarterly,” which prices various U.S. stamps in different states (used, no gum, previously hinged, never hinged) in different graded conditions. The Scott Specialized Catalogue of United States Stamps includes values for certain stamps by numerical grade in a catalog supplement.
PSE also makes available on its website a “population guide” that tracks the number of stamps that PSE has graded at each specific grade. The reports can be a guide to the relative preponderance of a stamp in a certain grade, and how many higher-graded examples can be found. Of course, given that grading is not nearly as prevalent in stamps as it is in coins, the population report may not be a truly reliable indicator.
Figure 2. A slabbed pair of 1914 2-cent Washington coils. (Image courtesy of APS StampStore.)
This said, the grading services also promote that net grades help facilitate comparison of stamps and provide guideline information. The PF, for example, states that “[t]he Foundation’s goal in grading stamps is to provide collectors and dealers with objective information about stamps” and that the use of numerical grading “allows collectors and dealers to easily compare stamps of the same or differing grades within the same issue,” allowing a collector or dealer to “make intelligent choices and comparisons among stamps.”
Collectors buying or selling graded stamps, or considering submitting stamps for grading, should take the time to read the guides and literature offered by the expertizing entities to ensure that they understand the nuances of the grading process and procedure. Many dealers will not guarantee that an ungraded stamp will receive a specific grade; auction houses will frequently not accept returns of stamps if they receive a graded certificate with a number lower than found on an existing certificate or in an item description.
At root, I recommend treating numerical grading as a guideline, not as gospel. In other words, “buy the stamp, not the grade.”
Grading does provide some comfort or confirmation of the relative condition of a stamp, and, of course, graded stamps are also by definition expertized stamps. Grading comes at a significant financial cost: graded certificates for stamps cost at least $20 for more recent stamps and can cost much more for more valuable or classic material (frequently 5 to 5.5 percent of the catalog value). For this reason, graded stamps tend to focus on the highest grades and the most expensive underlying stamps. Because of the numerous individual factors at play, each collector should make their own assessment of a graded stamp and determine their interest (and the value to them) of the stamp on its own merits.
Here is a guide to find grading information from three philatelic expertizers:
Professional Stamp Experts’ “A Guide to Grading and Expertizing United States Stamps”
Philatelic Stamp Authentication and Grading’s discussion of “Grading Stamps”
The Philatelic Foundation’s discussion of grading and “Grading Manual”
Got marketplace questions? Ask Matt at [email protected].