CAC and Coin Grading
United States coin grading has become extremely precise over the years; it has evolved from loose adjective descriptions to highly specific numerical grades. Coins that were once described with vague terms like “Extremely Fine” or “Like New” are now assigned exact grades like “AU 53” or “MS 64.” Despite this dramatic advancement, the coin market continued to innovate and refine coin grading standards. Two examples of this phenomenon are CAC and “plus” grading.
CAC, or Collectors Acceptance Corporation, is a third-party company that offers an additional opinion on PCGS and NGC coins. CAC’s premise is that some coins just barely make the grade while others are high-end “near-misses” and almost qualify for the next grade. Their goal is to identify the A and B quality coins from the Cs and Ds. Coins that are high-end for the grade (i.e. the As and the Bs) are rewarded with a green hologram sticker by CAC.
Since 2008, when CAC first began operations, these green-stickered coins have begun to command substantial premiums in the marketplace. Many collectors have found that CAC-approved coins are, indeed, nicer than average and worthy of higher prices. This is not to say that non-CAC coins are to be avoided; after all a C or D is still a passing grade. The consensus among collectors is that CAC is selective and the coins it approves tend to be extremely nice.
PCGS and NGC soon followed suit by introducing plus grading in 2010. The idea was to reward coins that almost qualified for the next grade with a “+” after the grade. The grading services felt that the near-misses were being unfairly lumped together with the average-quality coins (both in terms of grade and market value) so intermedia plus grades were rolled out.
For example, an 1880-S Morgan silver dollar is worth approximately $750 in MS 67 and $3500 in MS 68. Before plus grading, a high-end MS 67 might not have commanded much more than $750—its value was largely tethered to the price of a “normal” MS 67. Now, MS 67+ coins are worth around $1000. The high-end coins are properly rewarded by the grading services—and the marketplace—for being better than average.
Plus-graded and CAC-approved coins are especially popular (and valuable) where there are tremendous jumps in value. If there is a small spread from one grade to the next, a plus or CAC sticker will not help a coin’s value much. However, if there is a huge spike from one grade to the next, a plus or sticker will make a big impact. One instance is 1922 $20 gold pieces in MS 65 and MS 66. A standard MS 65 is worth $3500, while an MS 66 sells for $30k-$50k. A CAC MS 65 (or an MS 65+) would likely command $7000-$8000, or roughly double the price of a normal MS 65. While this is a big premium over a standard MS 65, it still represents a major bit of savings compared to an MS 66.