Third Party Grading / Slabbing
Third Party Grading / Slabbing (TPG) is a relatively new phenomenon to the British collecting community although it has been around for some years. Collectors in hot countries prefer this method as humidity is a problem. The highest numerical achievable grade of 70 is rarely seen, 66 being uncirculated, in IBNS grading. Only the numbers listed are used (i.e. 41 42 43 44 etc, are not used). There have been many discussions on the IBNS online forum about grading standards. You can get a slabbed banknote graded ‘about uncirculated’ that has obvious folds, because they do not adhere to IBNS grading standards. This allows vendors to put banknotes in auction with ‘uncirculated’ on the slab, thus promoting higher sales on lower grade banknotes. Some company standards leaning towards this hence them being banned on some online auction sites.
There are a few Third Party Grading (TPG) (Slabbing) companies around the world. The main three are: WBG (World Banknote Grading) - PMG (Paper Money Guaranty) both originating in America, one of only two companies allowed on ‘EBay’ (others are banned) and Legacy (was PCGS). The aim was to standardise the grading of Banknotes Internationally! From the comparison chart we have prepared you can see roughly that the three companies’ standards are similar, just the terminology differing. We have added IBNS banknote grading standards, as we see it, in the first column to help as a guide, which is based on grading raw banknotes (unslabbed).
Most companies add paper quality prefixes: TOP (totally original paper) / EPQ (excellent paper quality) / PPQ (perfect paper quality) which basically tell you if the banknote has been tampered with moistened/ironed etc., which is not included in the grading number. Any faults / imperfections / holes are only listed on the reverse of the label, so you could get a banknote graded at AUNC 62 without a paper quality prefix (eg TOP), which has been pressed/ironed with any pinholes/staple holes/ink annotations/stains/moisture/mould listed on the reverse, taken into consideration in the grading. Ill informed collectors could be duped into thinking they are purchasing (bidding in auction) on an uncirculated perfect banknote. So, the Latin phrase ‘caveat emptor’ (buyer beware) is relevant.
WBG and PMG slabs are fully sealed on all four sides. Some companies are sealed only on three sides with a paper label over the top leaving open gaps at each end.
A perfectly preserved banknote which is absolutely flawless and would 100% be graded UNC - using the IBNS scale will only get a PMG 64 EPQ or 63 EPQ because the centring is off or the back registration is off slightly while the front is close to perfect or vice versa etc. This is the main curve ball, in my opinion, that prevents a 100% workable side by side comparison between TPG’s and the IBNS. I have found with the lower grades below Good Very Fine where things level out and they become more compatible with the IBNS standards of the same levels…generally speaking! From 60 to 64 many of the banknotes will fall under the IBNS AUNC grade however there will be many exceptions especially in the 63 and 64 range and less in the 60 to 62, this is due to their strictness in the centring and the front and back registration of the banknote printing both of which seems to take precedence.
The other elephant in the room is of course the one thing that some collectors and dealers ignore is blemishes, stains, foxing etc that are often not visible in normal light but show up under UV light. Most, if not all TPG’s do this and if any anomalies are noted the perfect banknote automatically loses the EPQ / PPQ / TOP etc designation for paper quality and thus cannot be graded higher than 64.
So a perfect banknote, with perfect centring and perfect registration with absolutely no evidence of handling or bumps etc which may have graded a perfect 70, but has a spot on the banknote that shows up only under UV light with imperceptible discolouration on the banknote that cannot been detected with the naked eye, with a UV light will only grade 64. So you start to see how putting a TPG grading system along side that of the IBNS standards as they currently stand is like comparing an apple with a banana particularly when it comes to the UNC grade.
I would say as a general guide that any banknote graded 66 to 70 should conform to the IBNS UNC grade. The grade of 65 the majority of banknotes would conform to. The grade of 64 I would say roughly about 50% with that figure dropping to 10% for 63 and anything lower would be an IBNS AUNC- to be on the safe side.
We, as a company, do buy / sell slabbed banknotes and as the months go by more and more will entering our stock system. Where possible we will give an equivalent IBNS grade, but, as you have to understand we cannot physically handle the banknote to grade it.
You should look for TOP / EPQ to the right of the slab label, if not there, the banknote will have the original sheen of the banknote removed by some method. Any faults on the banknote should be recorded on the reverse of the slab, however, if you only see a picture/scan of the front of the slab, the faults are unseen. We have seen banknotes with faults missed by the third party grading companies.
All the information was correct at the time of printing.