Introducing PSA Half Grades: More Precise Grading for Your Cards
  Ruth

After much thought and a ton of feedback from hobbyists throughout the industry, PSA has decided to implement a new half-point system to reward trading cards that exhibit high-end qualities within their respective grade. Starting February 1, 2008, all cards submitted to PSA will be graded utilizing this new scale.

As the market advances, we felt it was imperative to enhance our grading standards so the grade can more accurately reflect the quality of the card. The original 1-10 PSA scale was the sound choice to help the grading concept gain acceptance but, with the ever-increasing price gaps between grades and the popularity of the PSA Set Registry today, the time was right to modify the system.

This new grading scale will not apply to unopened packs or tickets, only trading cards.

In the following paragraphs, we will explain how this new system will apply and how we feel the new half grades will change the PSA graded card marketplace.

 

Better Grading Scale = Better Market for Your Cards

After nearly two decades as the industry leader in authentication and grading, it was time for PSA to take a step back for a moment and look ahead to the future of the PSA graded card market. With millions upon million of cards already graded by PSA, this certainly is a sensitive issue and one that deserved deep thought.

Ruth  

At the core of the motivation is the simple fact that we believe, in order for the market to continue its path towards maturity, a more precise grading approach is necessary. PSA has received an enormous amount of support over the years, especially for our Set Registry program. In order to more accurately differentiate between the quality of cards and sets, or to properly reward the people who participate, the half-point addition made perfect sense.

In addition, the price gaps often seen between grades have, in some cases, become enormous. This gap leaves too much room for grade interpretation and it leaves the buyer without much in terms of resale protection. Prior to this new system, you may have thought you were buying a card that was high-end for the grade but there was no official PSA confirmation that attached to the card once you bought it.

As the market evolved, the price gaps have become more and more prominent with many cards exhibiting a (sometimes) great disparity in market value, especially between 7's, 8's and 9's.

Here are some classic examples on key baseball cards and their corresponding SMR values as of January 2008:

Example Card PSA 7    PSA 8    PSA 9
1909-11 T206 Christy Mathewson Portrait    $4,300    $14,500    $75,000
1915 Cracker Jack #30 Ty Cobb $9,250    $30,000    $75,000
1933 Goudey #53 Babe Ruth $15,000    $40,000    $125,000
1951 Bowman #305 Willie Mays $3,200    $11,000    $55,000
1952 Topps #311 Mickey Mantle $35,000    $62,000    $225,000
1954 Topps #128 Hank Aaron $1,500    $3,750    $19,500
1955 Topps #123 Sandy Koufax $850    $2,200    $18,000
1955 Topps #164 Roberto Clemente $2,200    $5,000    $25,000
1962 Topps #1 Roger Maris $300    $2,200    $8,500
1963 Topps #537 Pete Rose $750    $1,650    $9,500
1968 Topps #177 Nolan Ryan $550    $950    $5,500
1971 Topps #600 Willie Mays $100    $310    $3,000

As you can see in this chart, the price gaps can be significant and this is a mere sampling of examples from over five decades of card production. If you comb through SMR, you will find a virtual abyss of examples just like this. In some cases, the disparity is much greater between grades.

Many collectors pride themselves on acquiring "high-end" cards for the grade but, for nearly 17 years, the collector has not been able to officially receive credit for their efforts. Some exceptional 8's, for example, sell for a premium above the average NM-MT 8 price but the collector is left without confirmation from PSA – the only confirmation that matters for the Registry and when it comes time to sell.

 Grove Spahn

In addition, the price gaps or premiums for "high-end" cards (ones that would receive the half-point increase) would sell for much more than they do today. For example, if a 1955 Topps Sandy Koufax rookie card in PSA NM-MT 8 is currently worth about $2,200 and a PSA Mint 9 is worth approximately $18,000-plus, there should be a card that falls somewhere in between those two numbers. It might not fall directly in the middle (because an 8.5 will be easier to obtain than a 9) but wouldn't it make sense for an 8.5 to sell for at least $5,000-$6,000 if the card is close in quality to the $18,000-plus Mint 9?

While much of the hype will center on cards that fall into the higher end of the scale, the new scale should affect cards at the lower end just the same. In most cases, cards that grade between PSA 1-6 will usually sell for about 50-65% of the next highest grade, leaving sizeable price gaps in a lot of cases. This is especially true of pre-war cards, with both stars and commons.

Here are just a few examples of key pre-war cards and the price disparity between grades:

Example Card PSA 3    PSA 4    PSA 5
1909-11 T206 Ty Cobb Green Portrait $1,500    $2,300    $4,200
1911 T3 Turkey Red Cabinets #99 Walter Johnson    $2,500    $4,250    $8,000
1915 Cracker Jack #103 Joe Jackson $2,000    $3,500    $6,500
1933 Goudey #53 Babe Ruth $1,750    $3,000    $5,750
1935 National Chicle #34 Bronko Nagurski $1,500    $2,500    $4,850
1938 Goudey #274 Joe DiMaggio $800    $1,350    $2,500
1939 Play Ball #92 Ted Williams $350    $675    $1,000

In conclusion, there's no way to predict how the half-point addition to the grading standard will impact the market. There will be some instances where the half-point increase will result in large premiums based on the relative scarcity of the card in certain grades. Other times, the price premium may be more conservative if achieving the half-point increase is fairly common.

 

How the Scale Works

PSA will add a half-point grade within each of the 1-10 numbers with the exception of a 9.5 grade. We felt it was unnecessary to add a third "Mint" grade since PSA already had a Mint 9 and Gem Mint 10 grade as part of the current scale. This new system will also help separate cards that are graded Poor or Fair, for the first time, since the previous scale combined those two grades at the "1" level. This can result in a significant difference in value if the card in question is a T206 Honus Wagner or a 1952 Topps Mickey Mantle.

In order for a card to be considered for the half-point increase, it must exhibit qualities that separate it from the average card within the particular grade. In general, the centering may be the most important factor in achieving the half-point increase with eye-appeal being so crucial in the grader evaluation. Since centering is so important and clearly visible to most collectors, the strength or weakness of the centering will have a significant impact on the final outcome.

DiMaggio Gehrig Mathews 

In most cases, a card would have to exhibit centering that is five to ten percentage points better than the tolerance listed within a particular grade, at minimum, in order to achieve the half-point increase. It is important to note that there may be cases where the overall strength of the card, such as the quality of the corners and print, will give the card the edge it needs even though it exhibits only marginal centering for the grade. This is especially true for cards that fall within the bottom half of the PSA 1-10 scale.

In addition, at the lower end of the scale, eye-appeal will be equally important. They are times when a card will fall into a grade of PSA VG 3 or lower based on a technical defect such as tape or glue residue, significant paper loss on the reverse or some other defect. By having the half-grade available, it will allow the grader to better reward cards that have nice eye-appeal for the grade despite exhibiting a technical flaw which prevents it from reaching the next whole grade higher.

Keep in mind that a card that reaches a half-point grade is considered an exceptional example within the particular grade. In other words, the half-point does not represent the mid-point between grades. It is a way of distinguishing between average cards within the grade and ones that exhibit premium quality. Furthermore, cards that do not achieve the half-point increase and remain at the whole number grade are not viewed as "low-end" for the grade by PSA experts.

Remember that there is absolutely no obligation to send your cards to PSA for half-point consideration. The whole grades, PSA 1 through 10, still apply and are valid. This new system is designed to reward cards for their high-end attributes. This re-grade service is entirely optional.

 

Half-Point Grades and Qualifiers

Since a card that achieves the half-point has high-end attributes for the particular grade, condition qualifiers will not apply. This includes all qualifiers such as OC (off-center), PD (print defects), ST (stain), OF (out of focus), MK (mark) and MC (miscut). That is not to say that condition qualifiers are not considered when evaluating a card, it simply means that a card must first reach unqualified status prior to consideration for the half-point. In other words, if a card is graded a PSA NM-MT 8OC, that card is precluded from half-point consideration, even if the rest of the card exhibits extremely strong characteristics for the grade.

 

The PSA Set Registry

In making this change, one major consideration was how this new service might change the ultra-popular PSA Set Registry. First of all, from a functionality standpoint, the Set Registry will not be affected whatsoever. Cards that achieve the half-point grade will simply be entered into the overall calculations just as cards that achieve the full-point grade. The scoring system will remain the same.

 Corwin Rizzuto White

That being said, there is no question that the half-point grade will impact the ratings, thus the rankings, in a major way. Just imagine... if a collector has been very picky about the quality of their cards and owns a substantial percentage of cards that will achieve the half-point increase, that set could make a serious climb in the rankings. The difference between a PSA NM-MT 8 and a PSA NM-MT 8.5, multiplied many times over, can make a big difference, especially when the set contains hundreds of cards.

Not only will this further distinguish high-quality sets within the PSA Set Registry, it will also properly reward those who have selected their cards carefully, those who have most likely paid a premium for the cards they own. This was a key factor behind making this decision. With the graded card market continuing to evolve and as it becomes more advanced, we felt that this system will make the grading more accurate and help protect the investment of the buyer.

 

How to Submit Previously Graded PSA Cards

Previously graded PSA cards should be submitted just like ungraded submissions with the only exception being that they be submitted on a separate form, much like crossovers or Tall Boys. They must also be separated by service level. Again, just like a normal PSA submission.

In addition, the cards must be submitted at the level of their declared value. Since the cards are already graded by PSA, this process should be even easier than with ungraded cards. Furthermore, keep in mind that we are not looking to charge any submitter for what they think a card might receive (the value after the half-point increase). We simply want the submitter to pay the appropriate fee based on the current status and value of the card.

Hofman Kryhoski Lopat 

For example, if you submit a 1955 Topps Sandy Koufax in PSA NM-MT 8, we would require that the card be submitted at the $60 Super Express level (cards with a declared value of $1,000-$2,499) even though the card will most certainly be worth significantly more (placing the card at the $100 Walk-Thru service level) if the card receives the half-point bump. PSA is charging the customer based on the current state of the card, not what the outcome might be.

Last but not least, remember that cards submitted under this program will never be in jeopardy of going down in grade. So, the only risk in submitting cards under this new program would be the cost of the submission since there is no guarantee that the cards will reach the higher, half-point grade. In other words, cards submitted under this service will always be returned to the customer, at minimum, in the same grade they arrived in.

 

Crossovers

Crossovers will be handled in the exact same manner as before the transition but, with the new half-point grading scale, a more detailed minimum grade may be entered onto the PSA submission form. This is extremely important.

For example, if you have a card graded by another service and that card has received a half-point grade such as an 8.5, please remember to enter the minimum grade that you are willing to accept. A submitter may be willing to accept a PSA grade that is slightly lower than the grade from a competitor, which is very common, so filling out the submission form accurately is crucial.

 

New SMR Pricing

In the beginning, we will be inserting some estimated half-grade pricing into Sports Market Report within the first several months. Please keep in mind that the pricing will, most likely, be conservative to start. As the market absorbs more and more half-grade cards and prices realized are established, we will adjust SMR accordingly.

Keep in mind that the Population Report will play a major role in the valuation of half-point grades. The comparative rarity between grades will play a huge role in the valuation and, as many of you know, that comparative rarity will vary a great deal. Half-point grades, in most cases, will not result in a price that falls directly in between the two whole grades.

 Mills Staubach Robertson

In addition, half-point grades may have an even more significant impact on cards that become the highest graded example of their kind. For instance, since PSA has not yet graded a PSA Mint 9 or PSA Gem Mint 10 of either the 1933 Goudey Babe Ruth (#149) or the 1948 Leaf Satchel Paige as of this writing, achieving an 8.5 grade on those cards could have a huge impact on the value. This will be especially true where only one, or very few cards, reach the higher half-point grade. It further separates and recognizes the cards as the best of their kind.

Please remember that SMR pricing will be a work in progress as the market absorbs more and more PSA product. We will start with what we consider to be conservative premiums for half-point grades but modifications will be made over time.

 

The PSA Population Report

As part of the half-point launch, we have redesigned the PSA Population Report to not only reflect the new half-point grades, but to reflect all grades 1-10. This includes qualified grades, with the number of each PSA graded cards reflected in their own column. Furthermore, if a card achieves a half point increase; the grading information will automatically be updated in the database to preserve the accuracy of the population data.

 

The End Result

There's no question that this announcement with create a buzz within the industry. This could result in a few changes at PSA.

Cobb Cobb 

First and foremost, our staff may be offering on-site grading at more shows in 2008 due to the demand for the new service. We will update the show schedule on the PSA website so please visit the site to keep up with the changes throughout the coming year. Since the frequency of well-attended shows have declined, we do not expect the increase in on-site grading to be substantial but we do expect to offer the service at more venues.

In addition, due to the expected demand for the service, you may experience longer turnaround times until our staff can properly gage how the influx of submissions will affect the process. Once we have a grasp on the expected flow of cards, we will issue updates on our website at www.psacard.com so our customers will know what to expect. We do appreciate your patience during this transition.

In conclusion, we feel that this change will further enhance the PSA graded card market by providing more detailed grading and additional value to the hobbyist. Of course, as we move forward with our program, we are always looking for feedback from the community that supports our brand. Please contact PSA with your suggestions or concerns, your feedback has helped make PSA the most powerful brand in the marketplace and the preferred choice for authentication and grading for nearly 17 years.