SGC Changing to Two-Tiered Grading Structure

The popular card grader SGC is down to two options for collectors

Earlier this year, PSA and Beckett temporarily halted their card grading options leaving collectors with one company that was still active — SGC. Around the same time, SGC maintained they were staying open but made a few small modifications. Then last month, SGC unveiled its new population report. Safe to say, the company has had its hands full lately.

Now, SGC’s biggest change yet is being rolled out.

On Thursday, Peter Steinberg, the company’s President, issued a letter that can be found on the company’s website.

There’s a lot of explanation in the letter and I’m not going to go over the entire thing — most of it isn’t all that necessary. But the most important part is that SGC is essentially changing to a two-tiered style of grading options in terms of a timeline for getting your stuff back.

Let’s go straight to the critical part of the letter:

In total, SGC will now have two card grading service options available to our collectors. The first service, that we’ve aptly named the “I Can Wait” service, is for customers who can do exactly that. Sure, everyone wants their cards to be graded and shipped back as quickly as possible, but the “I Can Wait” service provides collectors with a great way to take advantage of the most competitive pricing the hobby has to offer. Orders submitted at the “I Can Wait” level are subject to turnaround times that fluctuate with demand, so although we’ll be working like crazy to keep the times down, there may be some unforeseen delays taking place at the time of your order’s processing that were not present during the initial creation of your submission. This service will start at the same low rate of $10/card that we’ve been charging for years and the estimated turnaround time will update on our website every few days to reflect where our team is at with turnaround times.

The second option offered is the “Need Them Now” service. This service is for any order that needs to be completed in a much quicker timeframe than our “I Can Wait” service. The estimated turnaround time for orders submitted at the “Need Them Now” service level is 3-5 business days. Although this is still an estimate, customers should not expect to wait far past the 5 business day mark to see that their orders have been marked shipped and are on their way back to them. The “Need Them Now” service starts at $100/card and is available to all collectors who don’t want to have to wait to see their SGC grades. Please note that bulk rates are also remaining completely unchanged by these updated services.

Basically, SGC will offer only two options — $10 per card or $100 per card (though it’s important to clarify that if you’re a bulk rate customer, it seems like everything else is business as usual). For $100 per card, you can expect a turnaround time of roughly 3-5 days. For $10 per card, you can expect a turnaround time of …

That sentence was deliberately left unfinished, of course. SGC merely says the turnaround time for that service will fluctuate.

Now, the good part is that they do mention they will be providing estimates of those turnaround times on their website. That way, you’ll have an idea of how long it might take before sending your order in. But, even then, per that statement above, SGC concedes that it is possible that you submit a card based on an anticipated service time that could change after you mail your cards in. Thus, the jury is still out on the accuracy of those estimated times on the website.

This, of course, is kind of a surprise.

Mike Mitchell SGC E90-1 American CaramelThe reality is that I, like most collectors, will not be submitting cards in at a rate of $100 per card. I’m not dealing in five-figure cards where a rate like that would make sense.  Submitting a card with a value of, say $200, at that rate isn’t going to happen. And I’m not running an auction house where a late consignment may come in and I need to quickly have a card graded. What I really want to consider here is the $10 rate.

So, the things I like about this rate are obviously the price. That’s reasonable and even folks like me that would typically pay $15 a card or so for a slightly expedited turnaround are even saving money there. The problem, of course, is that I expect the wait times to get out of control.

Think about it — the entire reason for these changes is that wait times are already out of control. More collectors than before are going to be taking advantage of the cheaper option so why would these wait times suddenly get better?

SGC would not be willingly throwing money away by eliminating more lucrative options. No company would. Not on purpose. SGC is essentially just saying that, we cannot meet all of the current demand of meeting expedited times. It’s much easier to funnel most collectors into the $10 option (where they are under no time constraints) and send others that have time constraints into a more expensive $100 option.

Why do that? The hope is obviously that the money will at least balance out while decreasing the time demands they have. Most customers, they know, will pick a $10 option. They will lose money from folks like me who typically would pay about $15 per card. But they hope to make that up from others at the $100 level that they know cannot afford to wait a long time. And in the end, they will have far fewer time obligations to meet.

The critical thing in determining if this model can work for collectors, of course, is how long the $10 turnaround times will be. If that time is at about a month, most folks like me will be happy to continue submitting. If it’s two months, I expect they will lose some business but others will stick around. But if we’re talking 3-4 months (or more) to get cards back, that’s going to cause a lot of folks to probably think twice before sending their cards in.

I don’t grade cards as a reseller. Typically, I’ll have a card graded for the reasons I outlined here. But the really important stuff that I buy — the more valuable cards … those are things I would probably want to buy graded, anyway.

Grading cards for me is mostly a convenience. I do it on occasion but it’s not a large part of what I do as a collector. So for me (and I expect many others out there), what kind of turnaround times we see at the $10 level is really going to be the driving factor of how frequently I grade cards going forward.

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