EP 11: The PSA controversy explained

Theo and Judah look through all the PSA controversy's through the years.

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Transcript

SPEAKER_01 0:12

Team Rocker Returns. As a podcast! Welcome to today's episode. We really hope you enjoy. Lately, PSA has had a lot of controversies. In fact, they just shut down grading because they have a 10 million card backlog. 10 million cards. So they're gonna shut down for a couple months and get through their backlog. But that's not what we're talking about in this episode. There have been so many PSA controversies over the years, so we thought that we should make an episode on most of them. We hope you enjoy. But wait, before the episode starts, we can't wait to tell you about a brand new deal. If you want to support a small podcast trying to grow, now you can. In our description, you can sign up for Rocket Plus, which allows you to get all of our episodes on Sunday instead of Friday.

SPEAKER_02 1:21

But that's not the only way you can support us. You can also do generous donations to help our podcast grow and produce as much content as we can, even more.

SPEAKER_01 1:33

Yes, we would really appreciate any support. It's so helpful for a small podcast.

SPEAKER_02 1:40

Remember, every donation counts, so it doesn't matter how much you do.

SPEAKER_01 1:44

Or how little. Okay, let's get started. But to really understand what's going on here, we have to start at the very beginning. PSA was created in 1991, and the reason it was created is because one person's near mint might be another person's lightly played, and PSA was meant to be the even middle ground.

SPEAKER_02 2:18

Yes, when before PSA, everyone kind of just guessed what condition their card was in. They just went, oh, that's probably lightly played. And that kind of just affected how expensive the cards were. PSA was created to be that unbiased third party that would be able to tell you what the grade was, but wouldn't be biased or tried to give you a better price.

SPEAKER_01 2:46

Yeah. So, um, but the the very, very first card that PSA ever graded was, I believe, a Honus Wagner from 1909.

SPEAKER_02 3:02

The gems of sports cards.

SPEAKER_01 3:04

Yeah, I I don't collect sports cards. Judah, Judah doesn't collect sports cards either. I have some of my dad's old sports cards, and that's about all I have. I know pretty much nothing about sports cards. I have some good sports cards. Yeah. It's it's not. Sports cards aren't the focus of this podcast. However, there will be a lot more in this episode, just because PSA does grade a lot in sports. Yeah, so there will be a lot of sports cards, but keep in mind this could go just the same for Pokemon cards.

SPEAKER_02 3:39

Yes. So they're very similar except for that the way that they're made, sports cards have a little bit more uh um they have like sharper edges. They're a little bit easier to like counterfeit than yeah.

SPEAKER_01 3:58

So I'm pretty sure. Did it get a PSA 5?

SPEAKER_02 4:06

I think so.

SPEAKER_01 4:08

Yeah, it it didn't get a super high grade. I think it got like a four or five.

SPEAKER_02 4:12

Which would make sense because that means PSA can tell you, oh, that card, even though it was the first one, not that good. Yeah.

SPEAKER_01 4:20

It's not a great it it shows that PSA is a lot harder to get a 10 in than people might expect. So tens obviously sell for a huge premium. And that that is quite true. 10s sell for usually double or triple 9s. And the more expensive the card, the more, the pretty much more it goes up with the 9 or a 10.

SPEAKER_02 4:42

Although I would say probably that PSA 5 Honus Wagner, maybe not a PSA 5 Honus Wagner, but I think it was would be more expensive than a PSA 10 Honus Wagner. The PSA 5.

SPEAKER_01 4:57

Yeah. And then um I wonder who has it. I don't know. And if you look at the card, it has the cert number 000001, which I think is a really fun cert number. I bet that that just commands a premium just because it's the first card ever.

SPEAKER_02 5:12

Yep. I mean, yeah, it was the first card ever graded with PSA.

SPEAKER_01 5:16

Uh-huh. So so it has to be expensive because PSA is huge. So um here's here's where the cracks start to show. The the card, the grader who graded the card, the first ever um card graded by PSA, the grader said he knew the card was trimmed. Now, what's trimming? Trimming is basically when you cut a card around the edges, that might sound like it will make the grade lower, but you can cut out imperfections and make it look like a better card than it actually is.

SPEAKER_02 5:49

Yes, say when you got your sports cards, the um the corner, which they have square corners, boring, was a little bit rounded, um, then you could cut it to make it more square, and that wouldn't actually be that bad. Uh-huh. And it can be would be bad because that's saying that PSA knows that that card was fake and they graded it anyway, which would kind of threaten their role as the third party, the unbiased third party, though they graded a card knowing that it was ungradable.

SPEAKER_01 6:27

Uh-huh. So PSA was actually meant to stop this stuff from happening.

SPEAKER_02 6:33

That's why they exist.

SPEAKER_01 6:34

Yeah, because trimming isn't the only way you can alter a card. Cards could be cleaned with special, like, um, I think like a special pigment. I'm no expert on restoring cards, and I don't think I ever want to be. Because like, it's cool that you have a card that looks better than it actually is, but like you can't grade it, and you feel bad if you want to like trade it or sell it, because it's not really a great card. So um people back then, before um PSA was like big, could recolor cards, could clean out imperfections, cut the corners, and then no pun intended, and um and make it so it looks way better than it is. And PSA was meant to spot those things and stop them, but clearly there was something wrong with that. Yes. Uh-huh.

SPEAKER_02 7:28

Which is not good. Yeah, I guess that's only one problem. You might be thinking, oh, PSA messed up their first card ever, maybe they weren't experienced. And yeah, that would make sense. But that's not the only thing that PSA did.

SPEAKER_01 7:43

And when the difference between a 9 and a 10 is massive, um, commanding even hundreds or thousands of dollars, then that's a big deal. Um, and PSA commands a lot of trust because of that. And the trust wasn't really there when they said that the card was altered. Now, back then I don't think that they knew that the card was altered, so they probably thought PSA was amazing. But the longer and longer it went, like the more people started to question them.

SPEAKER_02 8:12

And the more people started to alter their cards at every single one, PSA just admitted it. They just allowed the cards to be altered. And some of them they knew were altered. There, there have been like written confessions that PSA knew that some of their cards were altered and they still did it anyway. But I mean, you can't really blame them. It takes well, guess how long it takes to grade one card with PSA.

SPEAKER_01 8:47

Like how long they spend grading it, or how long they spend grading it. Uh, I don't know.

SPEAKER_02 8:53

I know you know the answer.

SPEAKER_01 8:54

That's yeah, I do know the answer. The answer is I would say maybe two, three minutes a card. That sounds good.

SPEAKER_02 9:02

30 seconds. Yeah. Take your card, look at it for 30 seconds, and in 30 seconds they can decide what grade it'll be.

SPEAKER_01 9:12

They can decide between having a $100 card and a $1,000 card. And and this isn't just like some anonymous source that isn't really confirmed. The CEO said this at an investor conference.

SPEAKER_02 9:27

But think about it. It if you're looking at a card, it may take you a couple minutes to look out and find all the different scratches and edges and go, oh, that's probably lightly played. They can do that in 30 seconds.

SPEAKER_01 9:41

So well, can they do it in 30 seconds or is it just cost saving?

SPEAKER_02 9:46

It it does sound like it's mostly cost-saving, but it doesn't really make me trust them very much if they can do something that takes me, what, like two or three minutes in 30 seconds? That doesn't seem like a very trustworthy thing. I think they should take time, especially touching a card. So you're getting a card graded that means a lot to you. Just looking at it for 30 seconds and going, okay, that's an that's an eight.

SPEAKER_01 10:09

Yeah.

SPEAKER_02 10:10

That doesn't seem very fair.

SPEAKER_01 10:11

And I'm sure that these guys are really good and trained professionals.

SPEAKER_02 10:15

Well, obviously, you have to be trained.

SPEAKER_01 10:17

Yeah, and by the way, through this episode, we are not trying to call out any PSA employees. We know that you guys work hard and aren't part of the bigger picture. Well, that sounds a little bit offensive. But we're really trying to call out the at the PSA as a company and not the little and not the graders or the people that make it up. We're trying to call out the higher-ups that um that are actually doing more of these things. Because the graders, like, they grade the cards, they're very important, but I don't think that they try to make any of these scandals.

SPEAKER_02 10:54

Yeah, another thing I'm also just gonna put a whole big allegedly over this. No one has actually been inside of PSA and seen how they've done it. If they have, we don't have evidence from this. This is all evidence that we have found. It may all be false, but this is what we have found. Yeah, this is so this is allegedly, we're not saying that because of you should watch this video and go, okay, PSA sucks, we're never grading with them.

SPEAKER_01 11:22

Yeah.

SPEAKER_02 11:22

PSA is still reliable in many ways. There are just also ways that it isn't.

SPEAKER_01 11:27

Yeah, PSA isn't it?

SPEAKER_02 11:28

And those are the things that you need to know about.

SPEAKER_01 11:30

PSA isn't a horrible grading service. It's just you have to.

SPEAKER_02 11:35

Max is a great grading service.

SPEAKER_01 11:37

Yeah, it's just this is only the bad things. We could make an episode on how good PSA is.

SPEAKER_00 11:43

We could.

SPEAKER_01 11:43

But the but it's not really newsworthy because every company, every grading company has great things about them, but not every grading company has the amount of scandals that PSA had to the point where it's a little bit more suspicious.

SPEAKER_02 11:59

It is. There are definitely some suspicious things about PSA. Yeah. But there are also good things, and that's important, for you to know. We're not saying that PSA is all bad. We're not saying PSA's all good. Beckett, Tag, all them have things that maybe aren't as maybe have bad things, maybe as scandals. But yes, like you said, the amount is the shocking part.

SPEAKER_01 12:26

And so, like when eBay launched, PSA was like, it wasn't actually growing too much. Like it was popular, but it wasn't super popular. But when eBay launched and someone from California could buy from someone in Sandusky, well, Sandusky's Sandusky, Ohio. How about that? I'm pretty there's a place in Ohio called Sandusky, right?

SPEAKER_02 12:51

Yeah, it's for Cedar Points.

SPEAKER_01 12:53

Oh yeah, uh-huh. So someone from California could buy from someone in Ohio, and it wouldn't be that big of a deal. Before this, most people like um most people just bought at local card shows or local card shops, and it wasn't actually like too much of stuff far away. So eBay really helped them grow because anyone could buy from anyone.

SPEAKER_02 13:19

Yeah, but this may not seem like a big deal, but when eBay started, I mean, you buy a Pokemon card, you buy it as lightweight plate, you buy it as whatever the person says, and it's rather hard to check for condition when they live in California. And you live on the other side of the country, you can't hold the card. The only way that I would trust someone that I would trust to buy from someone is if I'm physically holding the card and you can look at the condition. But if it's in a PSA slab, you can tell, oh, that's official. And that is another reason why PSA got so popular and made so much money because PSA started to go from that third party to this is the truth. What PSA puts on your slab, that is what the grade is. That is that is the condition. And PSA That's a lot of power on a third-party candidate, which I mean, they're a company, they have to make money somehow.

SPEAKER_01 14:18

So PSA slabs are actually specially made. So this is good, this isn't just a PSA special, this is all grading services. Well, yes, but they're specially made, so if you try to crack the slab, the actual slab breaks, and you can't take out a card and then put in another one. But I did see someone online crack a slab in half and then put another card in somehow. So don't panic. There were still stress marks. So this is just a disclaimer: if you're buying a card that you don't think really deserved a 10, look on the edges for like on not on the edges of a card, on the edges of the PSA slab for like little bubbles or stress marks. Um it's pro like I don't think many people can take it out, but it's definitely possible. So just keep an eye out on that. I don't know if that's really a PSA controversy, but it's definitely, definitely a little bit weird that you can do that.

SPEAKER_02 15:20

Yeah, I mean you shouldn't be able to do that. Yeah. But I don't think that's PSA's fault. I think that's just uh someone was creative and they realized they could do something like that.

SPEAKER_01 15:31

Yeah, that's it's I imagine it's very hard to do.

SPEAKER_02 15:35

But yes, you'd have to be very careful and to take that much time just no, just buy it.

SPEAKER_01 15:42

Well you could put in like a I you could take like some random bulk card, get a ton of tens, because I imagine it's not hard to find a PSA 10 random bulk card. Oh, maybe, because no one likes sleeves the topplers of bulk cards, except for me. No one, except for the except for me. Well, it's because I keep them in a briefcase and they would get damaged otherwise. So then you could just take and put it take that out, put in like a moonrion or something, and it would be worth way more. But I'm pretty sure that PSA is the easiest to replace. I'm sure that there are like much less popular grading services that do that, but I'm pretty sure that PSA is the easiest. Like Beckett has to have super high security on that because of the like a black label is an absolute grail. You can't have people just replacing it.

SPEAKER_02 16:38

Yeah.

SPEAKER_01 16:40

So the um this is quite quite a huge jump here, but PSA didn't have a lot of action for the next like maybe 15 years, and that's like I'm sure that there were plenty of scandals that we're not covering. We're only covering like the massive, really popular scandals. Yeah. But when the pandemic started, everyone just started getting back into Pokemon because they were trapped.

SPEAKER_02 17:09

Although, um, if you do have any scandals that you would that happen to you, put them in the comments.

SPEAKER_01 17:15

Yeah, we'd love to hear about it. So, um, the pandemic like allowed PSA to boom. I'm pretty sure that PSA also shut down during the pandemic, like they're doing right now. And um, oh, and keep in mind when PSA shut down, they still have like grading available. It's just the cheapest option is like 80 bucks or something. But um, business boomed, but with that came ridiculous turnaround times. I'm talking like almost half a year just to get your card graded.

SPEAKER_02 17:50

Wow.

SPEAKER_01 17:51

Yeah, it's supposed to be a couple months.

SPEAKER_02 17:54

Seven months.

SPEAKER_01 17:55

Well, just because they have the backlog. But yeah, it it took a while. I don't think that's really a controversy, but I don't think PSA did much to fix it either.

SPEAKER_02 18:05

No, they didn't.

SPEAKER_01 18:06

Yeah.

SPEAKER_02 18:08

Another thing is when PSA was made, you know, made as the neutral third party, when they made when they made that, they they were. But PSA has kind of just disintegrated. Become well, not disintegrated, but PSA has just become truth. Whatever is PSA, that's the grade. That's the condition.

SPEAKER_01 18:35

Yeah, okay.

SPEAKER_02 18:37

If you see a PSA 10, you immediately get relief. Oh, okay, that's in perfect condition. You see a PSA 5 and you go, oh, that's not. You see a card that says damaged, and you can't tell if that means lightly damaged or heavily, but you can immediately tell with the PSA slap. And PSA when PSA um realized that, they mean they're a company, they have to make money somehow. So they decided that they were going to do a thing where that you could buy back your cards.

SPEAKER_01 19:12

And that came with a huge controversy. Because if the same people who grade your card also buy your card back, there's gonna be some problems.

SPEAKER_02 19:24

Yes, it does not seem very neutral third party of them. It seems that they're becoming the first, the second, and the third party. So they're just everything, and that's not healthy for a company.

SPEAKER_01 19:36

So there's um so there's a big, big controversy that comes with this. So pretty much um one person submitted 30 of the same card.

SPEAKER_02 19:51

If you want to know what the card is, it is an Zekrom Ultra Rare from Team Up.

SPEAKER_01 19:55

It's an ultra rare?

SPEAKER_02 19:56

Yeah. Well, ultra rare is two black stars.

SPEAKER_01 19:58

Oh, okay, yeah, that makes sense. But anyway, um, and they've and they gave PSA 30 of them to grade. I want you to guess how many of those got a 10. Five, maybe four, three, zero.

SPEAKER_02 20:16

All of them got in one.

SPEAKER_01 20:18

Every single one. Which, like, that starts to get to a little bit of a different point when the card goes, like when all of them get a nine out of 30. But that is not not even close to where the controversy ends. Like, that's that's that's not a big deal. Like, that happens all the time.

SPEAKER_02 20:43

Yeah, but PSA went okay, you can, okay, thank you so much uh for grading with us. We see you got a bunch of nines, so if you want to sell them for us, we'll give you $35, which is 90% market. Really, really good, yeah, like really good price, actually. So they went, so the guy went, okay, I'll I'll sell like five. And he, but he's he took a picture of all of them and he posted it. And later he was scrolling. I don't know how someone found him. I think they were just scrolling through the marketplace because PSA sells the cards that they grade, which kind of seems a little iffy, but they can grade their own cards and then sell them. Uh, because I would just give them all a 10. But so he was scrolling through and he saw he saw Pikachu and Sekrom in a 10. And he looked at the card, he looked at the number because every single card is a number. A cert number. Yeah, a cert number, and he realized it was the same cert number. They took his card that was in a nine, graded it in a ten. And when PSA was confronted with this, they said, Oh, yeah, we made a mistake on a few. A few of them should have been tens.

SPEAKER_00 21:59

Um

SPEAKER_02 22:00

Oh, we we graded them as a nine? No biggie. No biggie. Yeah.

SPEAKER_01 22:05

That's so then what happened was he mysteriously went quiet and almost apologized for PSA. No, PSA never put out an official statement, and we technically don't know what happened to him, but it doesn't take a detective to figure out that he probably was given some hush money. He probably was just given money to be quiet.

SPEAKER_02 22:30

He was given compensation where they go, we're very sorry. Take this money. Yeah. Never talk about this again.

SPEAKER_01 22:37

Yeah, because you know that's completely fair and not weird at all.

SPEAKER_02 22:42

Yeah, I mean, it would have been okay if they went, oh, that was a big mistake. But the fact they they tried to make him not do it, again, that's a legend. We don't know if he just didn't want to talk about it, because that happens a lot. But that's- I bet a- I bet this happened to a bunch of people and they just don't want to talk about it.

SPEAKER_01 23:00

But I mean, like, it's a little suspicious. So we don't know that he was given money or anything, but I feel like there's a pretty good chance. But most people go, oh, PSA, how could you? That's so bad. Anyway, most people submit 500 cards to you. Like, people don't like people acknowledge that it's bad, but they just kind of turn their heads and just keep submitting.

SPEAKER_02 23:27

Yeah, and PSA will not change. I can promise you that no matter how many mad emails they get, no matter how many lawsuits they get, even because they're making so much money, every time every single time someone pays $80 to submit one card.

SPEAKER_01 23:42

They make a lot of money. It probably doesn't cost a whole lot to grade. And if they let's say one grader can get through, let's okay, so let's say they work seven hours a day and 30 seconds. So let's say they work seven hours a day for $10 an hour. Yeah, but it takes 30 seconds to grade one card. So seven hours in seconds is two, is twenty-five thousand two hundred seconds.

SPEAKER_02 24:15

So then divided by thirty.

SPEAKER_01 24:17

Yes, twenty-five thousand two hundred divided by thirty. So they can get through eight hundred and forty cards in a day. One PSA grader. And it costs them like what seventy dollars if they're paying them ten dollars an hour. So that so they can pay one at for the cost of pretty much just submitting one card, they can pay one grader. But that one grader can grade 840 cards. So the only so those other 839 cards are just pure profit.

SPEAKER_02 24:58

Yep.

SPEAKER_01 24:59

I mean maybe like one, maybe like one other for shipping or something. That is an insane profit margin. And I guess the the PSA slabs do cost a lot, but they probably like buy them in bulk. So maybe so maybe they get 700 cards in profit per grader.

SPEAKER_02 25:16

So yeah, but say in one day, so many cards get graded, that's probably enough to buy maybe what a hundred thousand slabs.

SPEAKER_01 25:26

70, um, 700 times 80 is 56,000. And they will open up to their lower tiers, but for now, one grader can make them 56 grand? That sounds really high, but I mean, like, we have the math to back it up. I'm sure there there might be like some hole in that math.

SPEAKER_02 25:49

If they have that much money, they should pay their workers.

SPEAKER_01 25:52

Yeah, they should pay their workers more. Wait, they should pay their workers like at least $30 an hour, or at least $20 for the industry standard. But like, if if somebody finds a hole in the math, please comment it. I feel like that's a little high, but maybe not, because PSA has like a lot going for it.

SPEAKER_02 26:12

I d I d I honestly think, and that's also just for normal submissions. Yeah, a lot of other people get like the pro ones where they get them like in half the time or stuff like that.

SPEAKER_01 26:25

But in half the time, that it probably comes out to the same because they need to like streamline the process.

SPEAKER_02 26:31

Yeah, that's true. So um But they're paying double for it.

SPEAKER_01 26:36

Yeah, they are paying double. So, yeah, it it probably comes out to the pretty much the exact same. But like when I bet they might even be making more money because they're closed.

SPEAKER_02 26:50

Yep.

SPEAKER_01 26:51

Yeah, they may maybe not, maybe so. And that's still crazy to me. They they shouldn't be making that much money. They have a stranglehold on the market.

SPEAKER_02 27:00

And that's also not including all the money they make from Beckett and S and CGC and SGC.

SPEAKER_01 27:08

Yep.

SPEAKER_02 27:09

And also from buying and selling their cards.

SPEAKER_01 27:12

Because since they're technically a vendor, I guess, they can buy 80-90% and sell it at 100%.

SPEAKER_02 27:19

Yep. So that it's just So they're making money out, even though you're also technically making a lot of money, because 90% is really good.

SPEAKER_01 27:27

Yeah.

SPEAKER_02 27:28

They're making more. So that's why they can do it at 90%. They're always because they're making 10%.

SPEAKER_01 27:33

They're always gonna be making more. Like there's no way to be.

SPEAKER_02 27:37

And yet they can't um, they can't, what's it called? They can't pay their workers.

SPEAKER_01 27:45

Yeah, they can't pay their workers. But that's not the only massive, huge, um, huge little I it's not little controversy. So in 2019, some cards looked really good, like exceptional. Now these were sports cards.

SPEAKER_00 28:11

Yes.

SPEAKER_01 28:12

And um and they were being altered. Like, I'm pretty sure the graders even knew that. But they were bought from a company called PWCC Marketplace, and it was like, and there was one person, um Gary Moiser, who was really good at cutting sports cards to make them his his like nickname was um Gary Scissorhands Moiser. Because he was ridiculously good at making cards look good, but they were sold on PWCC, which, by the way, shame on PWCC for letting them sell that, and um, and PSA graded them just normally. Here is the statement that PWCC um put out. We are obviously very aware that the issues surrounding the cards submitted to us by Gary Moiser. First, we want to apologize to all those who have been affected by the purchasing of trimmed or altered cards. We are not disappearing or burying our heads in the sand about this. Next, we are presently working with PSA and law enforcement to ensure that all affected cards are brought to light and this information makes its way to our customers. We understand that we are responsible for this part in the mess and will do all that we can to make it right in connection with Moise or submitted cards, as well as other submitters who might have altered cards of which we auction. We understand how difficult it is to be patient through this process, but we are working through as quickly as we can at the direction of counsel and appropriate authorities. Finally, in response to these recent findings, we are no longer selling any Moise or submitted cards. So PWCC put out a statement saying that they were wrong. Everybody they were wrong, um, they made the mistake. PSA did pretty little. They um, oh right, and then they also put a um I mean they apologize. Yeah, they also put a footnote. We are very sorry for the trouble that have for the trouble that has occurred and will work to regain your trust. They are very open with it. PSA didn't do much. Like if I search PSA PWCC statement, let's see if they put one out. Huh. So yeah. So it actually they actually did put something out, um, saying that they um that they're conducting a private investigation and working with law enforcement. But I don't think anything actually came out of that, and it was a little bit more, trust us, bro, we're doing it.

SPEAKER_02 31:03

Which is not enough.

SPEAKER_01 31:05

No, it's not even close to enough. It should be they they should they I'm I'm pretty sure that PWCC actually didn't sell any more Moisers submitted cards and made and actually improved. PSA just kinda looked the other way. And in PWCC's own words, we they did bury their head in the sand about this. So it is there are definitely a ton of controversies. And again, some of this information might be wrong, because this is all controversial. Controversial. And um, and if you have any more information, like maybe something after that happened after this episode was recorded, please put it in the comments. Yeah, put it in the comments because everyone deserves to hear the full story on this, and PSA can't just keep hiding about this. Well, that was quite the episode.

SPEAKER_02 32:00

Yes, but we spend a lot of time studying and researching, so please share this with your friends.

SPEAKER_01 32:06

We really hope you enjoy. Well, I'm Theo. And I'm Judah, and we'll see you, traders, later.