Although I'd bet few people have seen it, The Chip Rack has a grading system! Look at page "X" in the front matter and you will see the terms used in the book explained. They are:

NEW
VGD
USD
GD
WRN

There are also 3 modifiers listed:

CAN
DAM
ERR

All value estimates in The Chip Rack are based on the condition listed for that chip. However, there is only one listing per catalog number, so I guess it's for the chip the cataloger happened to see when he decided to pick the value range.