magnifying-glass.jpg
The PDS grading system is a way to accurately describe the actual the grade of a coin regardless of any previously certified grade given by a third party certification service.

The 70-Point Sheldon grading scale used by the grading services is abandoned and replaced with the associated adjectival ANA Grading Standard grade. A Qualifier is added to describe the quality of the coin within that grade. The qualifier is calculated from a 0 to 5 scale on three Factors - Planchet, Die and Strike.

The problem this grading system is trying to address is overgrading of certified coins. When overgraded coins sell at auction, they typically sell below market. As more and more overgraded certified coins enter the market though auctions, the cheaper prices realized will lower the entire market. By omitting coins with low qualifiers when valuing auction prices realized, then only properly graded coins will be use to report values in the market.

The basic idea is to abandon the 70-Point grading scale for valuation purposes. An overgraded coin in a certified holder can either be called its true ANA grade or the grade on the holder. If it is called its true ANA grade then the qualifier will be neutral (9 or 10) or positive (11 to 15). If the grade on the holder is overgraded, the qualifier will likely be low (0 to 8).

The basic ANA Grading Standard grades and their associated 70-point Sheldon scale grades are:

Poor: P-01
Fair: FR-02
About Good: AG-03
Good: G-04, G-06
Very Good: VG-08, VG-10
Fine: F-15, F-18
Very Fine: VF-20, VF-25
Choice Very Fine: VF-30, VF-35
Extremely Fine: EF-40
Choice Extremely Fine: EF-45
About Uncirculated: AU-50, AU-53
Choice About Uncirculated: AU-55
Gem About Uncirculated: AU-58
Uncirculated/Proof: MS-60, PR-60
Typical Uncirculated/Proof: MS-61, MS-62, PR-61, PR-62
Average Uncirculated/Proof: MS-63, PR-63
Choice Uncirculated/Proof: MS-64, PR-64
Gem Uncirculated/Proof: MS-65, PR-65
Superb Gem Uncirculated/Proof: MS-66, MS-67, PR-66, PR-67
Perfect Uncirculated/Proof: MS-68, MS-69, MS-70, PR-68, PR-69, PR-70

The definitions of these grade levels are found in the Official ANA Grading Standards. The latest version is the 7th edition published in 2013 by Whitman Publishing.

The Qualifier is a 0 to 15 point scale that is derived from three different factors:

Planchet - Die - Strike.


Each of these factors is given a 0–5 ranking and then the qualifier is a sum of those numbers. If the grade assigned goes up, some aspects of these factors will go down. The three factors are easily determined and do not rely too much on a judgment call. An overgraded coin will have a lower overall qualifier.

P-factor: Planchet


The Planchet factor deals with marks, spots and impairments that have happened to the coin since it was struck. Whizzing, tooling and any other metal movement is considered altering and disqualifies a coin. Light hairlines from cleaning or other evidence of cleaning are accepted but they are very low on the scale.

The higher you go on the grade, the stricter the planchet factor becomes. For instance, when it states “Average number of marks,” it means average for that grade. A coin graded Fine with “Average Marks,” will be different than a Gem About Uncirculated with “Average Marks.” A Gem Uncirculated with “Average Marks” would be interpreted as “Average for the grade.”
Planchet Factor

5 - Close to perfect. Very few marks—close to none.
4 - Fewer marks than average, with an original surface.
3 - Average number of marks; silver and gold might be dipped.
2 - More marks than average, and/or light hairlines from a past cleaning.
1 - Evidence of past cleaning. Many marks.
0 - Cleaned or heavy marks.

D-factor: Die


The Die factor deals with the die state of the die that struck the coin. This requires a bit of numismatic knowledge into the way dies wear. Some graders may argue that die state has nothing to do with the grade. They are wrong - If it affects the value, then it affects the grade.

We have all seen branch-mint Lincoln cents and Buffalo nickels from the 1920’s with horribly worn dies. The details on these late die state coins are eroded to a point were sometimes you can’t tell what the mintmark is. Look at the 1922 No D Lincoln cent as an example. This was a case where the die state was so late that the mintmark disappeared.

It does matter what the die state is. Look at the Cameo and Deep Mirror Cameo Proofs. Look at DMPL (Deep Mirror Prooflike) Morgan dollars. These are die states.

Most of the time the Die factor will be a “3,” meaning Average. This is when it really doesn’t come into play in the actual grade of the coin. It does come into play in higher grades or in special cases, both to the advantage of the coin’s grade or to its detriment.
Die Factor

5 - Very early die state—deep mirror or matte surfaces for Proofs.
4 - Early die state. Details are sharp. Some cartwheel effect. Mirrored fields or matte surfaces for Proofs.
3 - Average die state. Very little distortion of letters and devices. Moderate cartwheel effect. Dull mirrors for Proofs.
2 - Slightly late die state. Some distortion of the devices and/or letters.
1 - Late die state. Significant die wear. Heavy distortion on letters and/or design.
0 - Very late die state. Loss of major detail due to die wear.

S-factor: Strike


The Strike factor is an equally important component of the quality qualifier. A well struck coin will have much more desirability than an average or weakly struck coin. Look at full head Standing Liberty quarters, full band Mercury dimes. There is enormous attention paid to strike. And a fully struck coin is always in high demand over an average struck coin.

Strike is an issue that is also subject to overgrading. Ever see a full bands Mercury dime with weak lettering? It is not fully struck, despite the claim by looking solely at the bands. If you are looking for a Full bands Mercury dime with full letters, you would search out the coins listed with a factor of “5,” even if the grade you desire is a Choice About Uncirculated.
Strike Factor

5 - Full strike. Full details.
4 - Good strike. Most of the design and letters fully stuck.
3 - Average strike. Some parts of the design lack definition due to strike.
2 - Below-average strike. Some detail is close to missing.
1 - Weak strike. Some details are missing due to strike.
0 - Very weak strike. Major design loss due to strike.

Color

(copper or bronze coins only)

For copper and bronze coins, the color is also a factor. Here we just add the typically used letters to describe a Full Red (RD) and a Full Brown (BN) coin. The color is optional on circulated coins, as these tend to be assumed to be Brown. For the various shades of red and brown, we use a percentage of red with the Red-Brown designation (RB).

RD - Full red color.
RB - Red-brown, with a number indicating the percentage of red.
BN - Brown.

Here is an example of the same coin when properly graded or overgraded:
AU58RB.jpg
Gem AU (13: 4,4,5, 10% RB)
This is an AU-58 on the 70-Point grading scale. The qualifier in the example above (13) is taken from a ranking of 4 for Planchet, 4 for Die, and 5 for Strike, and RB 10% for the color designation. The coin described is a very nice coin for the grade.

If this coin was sent in to a certification company and graded MS63RB and you accepted it as fact, then the qualifier would be lower. The Die factor stays the same, and the Strike factor is lowered since some might argue that the wear is actually a strike deficiency. The grade now would look like this:
Typical Unc (9: 2,4,3, 10% RB)

What if it graded MS65RB? The qualities found acceptable for an AU-58 or even a MS-63 are no longer acceptable for a Gem Unc. If you insist it is still the correct grade, then the qualifier will drop further:
Gem Unc (8: 1,4,3 10% RB)

Links


PDS Grading system August 11, 2016 hand-out
PDS Grading System vs. the Sheldon 70-Point scale
Systemic Overgrading and How it Affects Coin Values