Card Grading History Disclosure Policy Discussion and Conclusion

Published by Robert Lifson on Tagged Uncategorized

In response to published REA policies regarding card alterations (http://www.robertedwardauctions.com/about/alterations.html), REA was asked an interesting question in November 2006 about two N162s from Julie Vognar’s tremendous collection that was consigned to the April 2006 REA auction. REA had submitted all cards from the collection to PSA or SGC for grading. Two cards that were sent by REA to SGC were returned not graded because of the SGC opinion that they were rebacked. REA did not agree with SGC’s assessment. In addition, both of these cards had been previously graded by PSA. They were purchased PSA-graded by consignor Julie Vognar (Hi Julie!) and broken out of their holders by her because she did not like her cards encapsulated; both cards were not encapsulated when consigned to REA. Upon return from SGC, we then sent them to PSA. When submitted to PSA they were both graded a second time. Back to the question: Specifically, in November 2006 we were asked whether this was consistent with our policies.

This was our response:

“You are correct that we submitted two N162 to SGC that were sent back as not graded due to their opinion that they were rebacked. It was our strong opinion that SGC was in error. We then sent the two cards to PSA. PSA did not agree with SGC’s assessment and were in agreement with ours. This is very different to us than a card grading X and being broken out of a holder and resubmitted in the hopes of grading Y. Either a card is rebacked or it isn’t. We did not think these two cards were rebacked and this is a material quality defining a card that is unrelated to condition per se. Similarly, for example, if SGC had returned a card as a reproduction and we did not agree with their assessment, we would present the returned unencapsulated card to PSA for their opinion. It is interesting to note also that this is the only time that we have ever had this issue, and also that this simply does not involve breaking cards out of holders. If you personally equate our approach to these two cards to the issues being discussed, you are of course entitled to your opinion and we respectfully disagree.” End of response.

A new and very legitimate previously unasked question has recently been raised, as an offshoot of recent issues involving memorabilia authentication procedures and policies by auction houses, about whether the grading history of cards submitted for grading by an auction house should be disclosed if 1) the auction house submits a card to one grading service; the card is not accepted for grading for any reason; and the card is then submitted to another service, which has a different opinion; or if 2) a card has been graded by a grading service and is then broken out of its holder by the auction house, resubmitted for grading, and receives a different grade. The second scenario has never and will never occur at REA because as a formal policy we do not break cards out of holders. Period. The first scenario, however, does describe the unique circumstance of the two N162 cards in the 2006 auction. And this question raises an interesting issue. Julie Vognar’s two N162s represent the first and the only time we have ever encountered this particular situation. But it is bound to eventually happen again, and even if it doesn’t, it does raise an interesting question that we have never previously considered. Should the fact that PSA (twice) and REA did not have the same opinion as SGC regarding the backs of these two cards have been disclosed? A reasonable case can be made that the answer should be yes. So the question is, what should our formal policy be regarding such a situation? To answer this, we have to ask “Would this potentially impact a buyer’s interest in these cards?”  After reflection, in our opinion, the answer is: it depends on the collector, but it might. We can’t know the grading history of cards consigned that are already encapsulated, but we can know with certainty the grading history of the cards that we personally submit for grading. After giving this thought, we think that as an auction house we have an obligation to provide this information to buyers.  

In the future, if ever such a situation should arise again, REA’s policy will be to disclose the conflicting opinions of the card grading services. 

Unusual situations sometimes have to come up at least once to allow for questions, thought, discussion, and new policy (which is always a work-in-progress). For REA, this issue is extremely rare (so far literally unique), but to the extent that this is a common practice elsewhere, it is our hope that our approach will at the least promote thought about the issue (for both buyers and sellers).

Sincerely,
Robert Edward Auctions LLC
www.RobertEdwardAuctions.com



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