Currency Grading Tutorial

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A brief comment about intermediate grades
Intermediate grades such as XF-AU, VF-XF, Fine-VF, VG-Fine, or Good-VG are often used to indicate a note that is nicer than the lower grade level, but just misses the higher classification. For example, a note with three vertical folds and a horizontal fold cannot technically grade XF, but it might be much nicer than a typical VF-an intermediate grade of VF-XF is then used in this instance. A plus sign (+) may also be occasionally affixed to a grade, indicating that the note is a nice, problem-free note for the assigned grade with claims to a higher classification.

Processed, washed, and pressed notes
It is an unfortunate aspect of our hobby that unscrupulous people will attempt to pass some things off as something they are not. Methods to "improve" the look or grade of a note abound, and it is common to see notes where any number of these methods have been attempted. The most common is to wash the note (usually with soap, detergent, or bleach) and flatten it (often with an iron), and starch is even sometimes added to stiffen the note and add crispness. While a beginning collector may be easily fooled by such a note (and even experts occasionally miss one), enough practice will enable any collector to readily spot a "doctored" note. A few people in the hobby still maintain that a processed note is an "improved" note, but the portion of the hobby that views originality favorably has gradually overwhelmed this view, and processed notes are usually traded at a discount and graded at a level or two lower than their apparent grade. A processed note can usually be detected by fading or loss of color, especially where the note was once folded. Folds can often be difficult to detect, but the evidence of a fold can never be completely removed. Sometimes even the smell of a note is a dead giveaway-and sometimes it may be the only way to determine if a particularly good job was done in processing a note. On an Uncirculated note, a lack of original embossing is a telltale sign of a pressed note. Patience and attention to detail can often prevent hundreds or even thousands of dollars worth of mistakes.

Damaged and repaired notes
Some common sense is necessary when grading damaged or repaired notes. A collector should research the different methods of repairing a note, and be able to recognize these methods. Sometimes it is actually possible to "improve" the appearance of a note by repairing or restoring the paper (particularly when a tear is closed or a missing piece is restored), but the note still must be classified as damaged and repaired, and special care should be taken to make sure any note does not have a subtle or imperceptible repair. Some repairs are deceptive, and whether this deception is done intentionally or not a collector can get "burned" on such a note. The assigning of a grade to a damaged or repaired note is a matter of opinion in some sense, but common sense should dictate the final evaluation. A general rule to follow is to consider at what level one would be indifferent to a damaged note as opposed to a problem-free note in a lower grade. For example, if a collector would be equally content with a stained CU note or a problem-free VF, then a fair classification of the stained CU note might be at the VF grade level. At Heritage, we will give an overall grade to a note, and then describe the paper quality of the note and the flaws that are present. For example, a note may be graded VG, but in the catalog description of the note it might state that it has the paper quality of a VF but a corner tip has been torn off.

Some general comments about grading and value
Grading is, of course, an art, and not a science. While counting folds is relatively easy, determining eye appeal and what a note in a certain grade should "look" like takes time, experience, patience, practice, and a certain level of common sense. If a note looks really nice and might pass for AU but is technically only an XF or XF-AU, it will often bring a price commensurate with an AU grade regardless of the technical grade. Eye appeal is often more important than a technical grade in determining a note's value. This only makes sense-most people would rather own an attractive, problem-free, well centered AU note with a vertical fold down the center rather than a generally unattractive note that technically merits a CU grade. Approach grading with common sense and knowledge about what merits a given grade, and have fun-which is, after all, the most important aspect of collecting.