OCR keeps coin grading service in mint condition. System saves time; guarantees security Although coin collecting has been a popular hobby for many years, the buying and selling of rare coins for investment purposes -- particularly among Wall Street money funds -- has risen dramatically with the recent advent of certified grading services.
To keep pace with this explosive growth, Professional Coin Grading Services (PCGS) of California, the world's largest rare coin-grading service, installed versatile optical character recognition (OCR) and bar code-tracking equipment. In addition to saving time, the OCR/bar code devices also help guarantee the highest security for each valuable piece the company handles.
"Our company offers third-party, independent certified grading of U.S. and Canadian coins, and will soon expand into world coins," says Stephen Mayer, chief operations officer of four-year-old PCGS. "We carefully evaluate the condition of every coin that comes in, then seal each piece in a permanent plastic case and guarantee its grade and authenticity as long as the container remains unopened." "In addition, the average value of each coin we look at is about $1,000, so we need to provide tight security and close tracking of all packages from the moment they arrive at our facility until the coins are returned to the customer," he continues. "The OCR readers enable us to meet these strict security requirements. "PCGS receives thousands of valuable coins through 505 authorized dealers located across the U.S. Individual customers who wish to use the grading services must first submit their coins to an authorized dealer (PCGS' toll-free number provides submission information). The company's number provides submission information). The company's fee structure starts at $26 per coin, and goes higher based on the level of service requested. "Our job is to eliminate the guess-work regarding a coin's grade and remove any chance of misrepresentation," Mayer says. "As more investors move into the rare coin market, the need for our innovative services will increase."
Mayer emphasizes that using combination OCR/bar code readers to track coins step-by-step through the grading process has become vital to PCGS' business success. Coins are shipped to the California facility's receiving department via registered mail. "Once we receive the packages, an operator uses the OCR equipment to scan the registered mail code on the unopened envelope and enter the data into a computer file," Mayer explains. "This is an important step because the dealers send us thousands of small items and we must have an immediate way to distinguish one package from another. If a customer calls in to confirm that we received a delivery even before we open the package, an operator can easily access the information and tell them exactly when it arrived." After being scanned, the packages are placed in a central vault. When the time comes to open a package, it is sent to the receiving data department, where an operator keys invoice data -- including the number and type of coins, who sent them, and how much each piece is insured for -- into the computer system. During the coin evaluation process -- which may take from about 10 days to three months depending on the service requested--an order is scanned each time it moves from department to department, or is sent off site for storage. These departments include grading, certification, sealing, grading verification, changes (if any), photography and shipping. In between each step, the coin is returned to the vault. "Once a package is opened in receiving data, we create two keys: the paper invoice number and an internal routing box number, which consists of a bar code label placed on the exterior of the box that will carry the coins," Mayer says. "We also print a unique eight-digit bar code certification number on each coin's internal routing holder that ties it back to the invoice and box number. As a result, if a coin gets separated from its box, the worker can get it back into the correct container. The ability to reference the invoice numbealso provides an easy-to-follow trail as the coin moves throughout our facility."
Opened coins are either routed directly to the grading room or sent off site to an armored facility for storage, if a backlog exists. PCGS maintains a staff of 20 professional graders, at least three of whom examine each rare coin. Because the paper invoice does not accompany the coin through the grading process, the company can maintain total anonymity regarding who owns a coin or its insured value. After determining the grade and entering the information into the system, a worker uses a wand to scan the box number. He then routes the box to certification, where it is reunited with the paper invoice, and the certification labels for each coin are created. The coin next moves to sealing, where a worker places it in a permanent plastic holder. In the grading verification room, graders take one final look at the coin in its holder, and, if certification is approved, a worker again scans the bar code number and sends the coin to photography. If the coin is not approved, it goes to the changes department, returns to grading verification, and then is sent to photography. Finally, the coin is routed to shipping for mailing to the customer.
PCGS' coin-tracking system consists of five Model 812 readers with OCR/bar code combination hand-held wands connected through time-share terminals to a Hewlett-Packard 3000, Model 935, computer system. The coin grading firm purchased the equipment through Data ID Systems a division of TCAM Technologies, a distributor of OCR/bar code products. The bar codes that go on the coins are printed by a Zebra Model 130; other bar codes and OCR codes are printed by an H-P 2934. The units, which read OCR, bar code and magnetic stripe media offer speed and flexibility and provide accurate data entry with auto- discrimination among all popular bar codes. According to Mayer, PCGS selected the readers based on reliability, performance and price. "After evaluating competitive equipment, we decided that the e readers best suited our extensive tracking requirements," he explains. "We use the OCR-A font and Interleaved 2 of 5 and wanted the flexibility of reading OCR characters or standard bar code." Mayer further pointed out that the Caere readers have reduced tracking problems, eliminated human data-entry errors and improved customer service. "Since installing the OCR/bar code equipment, our tracking methods have become more efficient," he says. "A lot of information was hand written into logs, and people sometimes made mistakes. The automated equipment solved that problem. For example, our company makes deliveries to coin shows; by scanning the code off the box or invoice, we virtually eliminate any chance of making an error or losing track of an item." "Furthermore, we currently move 4,000 to 5,000 coins through our departments each day and must know the exact location of every piece," Mayer adds. "Now, when a customer calls our toll-free number to make an inquiry about a coin, the operator can quickly look up the information on the terminal screen and explain the piece's up-to-the-minute status, including if any grading delays exist and when the coin will be shipped back to the dealer. As we continue to grow larger, keeping the entire customer-service process fast and efficient will become even more important."
Future enhancements planned
In the near future, PCGS plans to add 10 more OCR/bar code readers at strategic stations throughout its facility. Mayer explained that the new devices will further enhance the company's ability to expand and provide customers with superior service. "The devices have worked so well for us that we want to monitor the grading process every step of the way in even more detail," he says. "With this added capability, we expect our business to continue to grow at an annual rate of 20% to 50% during the coming years."
Copyright © Reprinted from AUTOMATIC I.D. NEWS, March 1990