October 24, 2007—PCGS Currency has announced that, effective immediately, notes with major problems and/or restorations will no longer be placed in “Red Holders.” While the grading standards for problem notes have not changed, with the “Apparent” grade system remaining in place, such notes will be placed into PCGS Currency holders with the normal green-colored security tape label. The word “Apparent” will appear larger and bolder than before, as will the problems described on the holder for each note, but the color of the holder will no longer be red.
According to the PCGS Currency Grading Standards, notes that have major faults such as tears, splits, holes, missing pieces or have been subject to major restoration, such as repaired tears or splits, redrawing of the design, bleaching of the paper, or even reconstruction of missing pieces, will be assigned a “problem note” designation. Such problems will be noted on the grading label. In these cases we will assign an “Apparent” grade followed by a brief and concise description of the problems or repairs. The “Apparent” grade will equate to what the note would have graded without the mentioned problems. For example, “Apparent VF30, bleached and starched” might be a description of a problem note, as might “Apparent XF45, upper-right corner restored”. No net grade will be given.
“Grading problem notes is an important function of any currency grading service, as so many rare and desirable notes have flaws, repairs, or restorations to some degree or another,” says PCGS Currency Vice President Laura A. Kessler. “This minor change in the color of the holder will help dealers and collectors better market this type of material, as many hobbyists simply associate the red colored holders as something that they should stay away from. Many great collectible notes are not flawless but are still very valuable, and these notes deserve equal footing in the marketplace.”
According to Jason W. Bradford, President of PCGS Currency, “The red holder idea was designed to make problem notes stand out in the marketplace. While the “Apparent” grade system is still the best way to approach the problem of flawed and/or repaired currency, as we believe net grading is more a market phenomenon influenced by relative value over time rather than a standard that can be consistently applied, the red holders simply were not accepted in the hobby. By making this minor change, we are keeping what is best about our grading system and yet improving the idea to make these notes more marketable and saleable.”