Paul,

The answer to your first question is yes there is a difference. Virtually everyone agrees that it is appropriate to grade chips. Unfortunately nobody agrees exactly on how. Archie Black is preparing a proposed grading system, and from what I have seen I think it is a a very fair and reasonable system. I believe the adoption of a simple grading system is a necessary step to thwarting the slabbers.

People can grade chips without slabbing them. However Slabbing chips requires that the chips be graded.

This is where I have a problem with slabbing chips. Because slabbing chips requires grading and there is no uniformly accepted grading amongst chip collectors as a practical matter the grades assigned by a slabbing company mean absolutely nothing. You and I as chip collectors are not likely to be fooled by the slabbers. But we are not the target market for slabbed chips.

The purpose of slabbing is to create a system where people who know nothing about a chip can invest in chips relying upon a supposedly expert opinion regarding the condition (and thereby value*)of a chip. In other words the slabbers and those who would sell slabbed chips have a target market consisting of people who invest in coins. The idea being that the next time Joe CoinInvestor visits his local coin shop the owner can pull out a fancy slabbed chip and a price guide and sell this chip as an investment. What the coin invester is led to believe is that this is a good investment because the growing hoards of coin collectors will recognize the value of his new chip as being the value assigned by the price guide for a chip of that grade. Of course we know that chip collectors will not all recognize that chip as having that value and most will ignore the grade (and many will not buy any slabbed chip). Thus the underlying premise of chip slabbing is A LIE!

In order to do this the slabbers had to create a grading system. Of course while most chippers use a simple descriptive system (ie. worn, or uncirculated) the slabbers recognized that the simpler the grading system the more likely a person may learn to grade chips on their own. Thus in order to insure that they would be able to justify their services they created a complex grading system based on the complex coin grading system (after all their target market is people who are already familiar with the system used for coins.)

The answer of your question about whether condition or grade effects the value of chips is of course yes it does. Whne others have made the argument that condition does not matter to chip collectors I have immediately thought that they did more harm then good to the anti-slabbing movement.

Between two otherwise identical chips, most collectors will have a prefernce for a chip in "better" condition. Sometimes this is easy to determine. Sometimes two collectors may each have different opinions as to which chip is in better condition. The effect condition has on value will depend on the chip. For example a chip which has a badly faded hot stamp but is one of only a handful of such chips will still be attractive to collectors. On the other hand if the chips are plentiful in better condition the chip with the faded hot stamp may become impossible to sell for any price. The condition of a chip is one of many factors which effects its value.