Hi
Yes my subject title is right. I'm wondering......is the EPQ designation by PMG worth all the fuss and possibly a higher premium value on the note? My writeup below is focussing on PMG. Do note that other rating agencies also use a similar acronym like PPQ short for 'Premium Paper Quality' used by PCGS Currency.
Background
The EPQ designation was formulated to be used on their pouches by PMG in November 2005. The definition of EPQ as taken from their website is:
PMG uses the designation Exceptional Paper Quality (EPQ) for notes that, in the opinion of PMG graders, are original. By original, we mean that a note has not been physically, chemically, or materially processed to lend the appearance of a higher grade. PMG graders examine the embossing, inks, and overall integrity of each note to make the determination whether it will qualify for EPQ. Notes exhibiting normal wear-and-tear for their respective grades are eligible; normal wear may include factors affecting grade such as counting marks and folds. Notes receiving the EPQ designation must furthermore be unrestored. A restored note has had non-original material added to bring its appearance to a known or assumed state.
Commentary
What does the above mean? Does this mean that notes without an EPQ designation have been adversely processed before? But if so, wouldn't the note have received a 'Net' grade instead with the relevant adverse reason provided.
This is in my opinion one of the largest paradoxes in the currency grading industry, which I shall attempt to better answer.
I found this explanation from this website below which in my opinion bests answer this question:
PMG EPQ explained
Many people ask about the difference between PPQ/EPQ notes and the others. First off, we dealers refer to them as Q'd (pronounced Queued ~ google it to pronounce it) and Flat. The grading services either assign a Q (PPQ or EPQ) or it's known as Flat. The term Flat came about because a typical rule of thumb is that Flat notes lack the originality of the "paper wave" -- the naturally ocurring wave that original paper money has (yes I know that's redundant). Flat notes occur because of the way they were stored, or they have been pressed flat intentionally. Sure the Q'd notes bring a little more money but the flat notes can be just as appealing to the eye!
Conclusion
So conclusion, are notes that have been rated EPQ worth the extra premium? Most probably yes. However a note that doesnt have a EPQ designation doesn't necessarily mean its adverse. It could have been due to pressing or the way the note has been stored that may have caused it to lose its natural paper wave. I have seen the so called waves on notes and it actually occurs due to the natural aging of notes, together with foxing. However please note that in my opinion notes that do not have the EPQ designation are in no terms adverse. In fact these notes are still very valuable and collectible. I asked one of the owners of one of the main local auction houses before, if he had to choose between a lower graded note of lets say 58 EPQ or a note that is graded 62, he would choose the higher grade anytime.
So to conclude, use the EPQ designation more as a guide to signify the ability of the previous owner to have kept the originality of the note well and possibly help add some increased premium to the value of the note. That's all there is to it and it shouldnt result in a crazy price premium that doesnt make sense.
Hope the above sharing has helped shed some learnings on this paradox.
Sincerely
Paul's Numismatic Passions
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