Third Party Grading

Grading of collectible postage stamps is certainly not a new concept. In fact, for the last 150 years in the philatelic marketplace, the Seller [or owner], of a stamp has typically provided a "grade" when describing a stamp and then uses that grade to support the selling price.

An off-quality, poorly centered stamp is worth, and will sell at a small fraction of standard catalog value. Conversely, a stamp in superior condition with balanced centering is worth, and will sell at multiples of standard catalog value.

What is a new concept is the introduction of third-party grading, introduced by PSE [Professional Stamp Experts] in 2002. PSE does not have financial interest in the outcome of the grade they assign, thus, the term third-party grading.

In the USA stamp market, "grades" such as GEM, Superb, Extremely Fine, and Very Fine are commonly used in Auction Catalogs, Dealer Price Lists and on the Internet.

Since grade influences value, the 'assignment' of a grade supports the value, or price. Does a Dealer or Auctioneer have a motivation to acheive the highest price possible for a stamp? Certainly. They are in business to make a profit. It's common to see a wide range of grades from one seller to the next, when they describe and, price a stamp. One man's SUPERB GEM can be, and often is, another man's Extremely Fine [XF].

There's more to it than simply the seller's financial interest. The skill level of the seller [owner] also comes into play. It is said that ownership adds at least one grade. Sometimes more than one grade. Before PSE came along with a precision-oriented grading system, there was no commonly accepted or more importantly, commonly-applied grading standards. Other than the PSE system, there still isn't. It was up to the Buyer to determine if the stamp quality 'matched' the pricing being offered.

In the last several years, much more attention has been paid to true high-quality stamps. Auction realizations show dramatic value differences. All stamps are not created equal. Take the $2 Columbian [scott#242], for example. A never hinged copy sells for as little as $1,000, or as high as $65,000. Why the big price difference? Quality and Scarcity.

Many serious collectors prefer to have the best quality available. Those who have taken the time to evaluate the relative availablity of quality, have discovered that true high-quality stamps are not at all common, and are not commonly available. Hence the competition for such stamps has increased, particularly the last 5-10 years and pricing has climbed as a larger number of serious collectors are pursuing a very small number of prospective stamps.

Professional Stamp Experts PSE, of Newport Beach, California, one of three independent expert committees for US stamps, pioneered stamp grading in 2002, by developing a stamp grading system that analyzes and evaluates the important attributes of a stamp - identification, soundness, authenticity, centering and eye appeal - to arrive at a bottom-line, numerical grade. See PSE Grading Scale below.

In 2005, The Philatelic Foundation of New York, announced they would begin grading US stamps. They use the same scale that PSE developed for assigning a numerical grade.

The American Philatelic Society of Bellefonte, PA also performs authentication, but does not offer grading.

For pricing, The PSE Stamp Market Quarterly is available online

PSE also maintains Population Statistics for each stamp listed in the SMQ here

Photo Examples of PSE Centering

Click for photo examples of PSE Grading

Complete PSE grading information

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