Third Party Grading
Introduction and Overview
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.
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.
Expertising American 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. Here is a link to the PSE Grading guide.
The Philatelic Foundation of New York (Established 1945), began offering grading for US stamps 2005. They use the same scale that PSE developed for assigning a numerical grade. The PF uses a slightly different approach to arrive at the numerical grade. The PF Grading Booklet can be found here.
For pricing, The PSE Stamp Market Quarterly is available online
PSE also maintains Population Statistics for each stamp listed in the SMQ here
It's easy to see how important it is to know exactly what you are buying. Or, are being sold. The value of your stamps is directly tied to grade and condition. Are you relying on the dealer? The same dealer who grades the stamp for you and then prices it according to 'his' grade?
An objective, impartial description and valuation from someone who is not involved in the transaction is standard in many markets today. Philately should be no different.
If you are collecting and buying Extremely Fine grade stamps at an Extremely Fine price, it beehoves you to make certain your stamps are indeed; "Extremely Fine."
Graded Examples - See the Difference