One of the most intriguing and lucrative ways to make money with coins is by playing the “crack-out” game.

Simply put, buyers identify coins that are encapsulated in grading service plastic holders (“slabs”) but that, to their eye, are undergraded. They break or crack open the slabs to send the coins to a grading service again. These buyers hope that the freshly freed coins will receive a higher grade upon resubmission to a third-party grading service.

This plays on two truisms; in some coin series, there are serious spreads in prices for coins just one grade apart; and, since grading is subjective, sometimes graders seem to “miss” determining the “true” grade, as determined by the crack-out artist.

Connect with Coin World:  

Sign up for our free eNewsletter
Like us on Facebook  
Follow us on Twitter

It’s a medium-risk activity that can have a huge reward.

Ways to play the game

There are two ways to play the game, according to Scott Travers, author of seven books on coins, including The Coin Collector’s Survivor Manual, and a consumer advocate for the coin-buying public. 

The less common approach is to merely submit a coin that is still encased in its holder and seek an upgrade, either by way of what’s called a regrade (where a coin is submitted to the same grading service that previously graded the coin) or as a crossover (where the coin is sent to a different grading service).

“The most obvious type of crack-out — and the one that gave the crack-out game its name — is to pry open a grading-service holder, remove the coin inside and resubmit it as a ‘raw’ coin, as if it had never been graded in the first place,” Travers writes at USgoldexpert.com. “My personal experience suggests that this is the best way to maximize many potential upgrades.”

But how does one liberate a coin from its plastic tomb?

The goal is to get the coin out of the holder without damaging the coin. In real life, damage translates to disappearing dollar signs. 

So, I set about trying to learn how to play the game — not from the standpoint of making money, but just figuring out how to do it safely. (The money part will come later.)

At the American Numismatic Association World’s Fair of Money in Anaheim, Calif., I found four modern replica coins encased in slabs. At $2 each, these were the perfect pieces with which to learn. 

Have you ever seen these replicas? You know, the ones with the stylized design that is close enough to fool many laypersons, but upon basic inspection reveals itself to be a close replica. All four of the pieces used in this exercise bear Proof finishes and all are marked COPY so as not to deceive. In many cases, replicas of these kinds are sold in slabs from nontraditional coin marketers. Since the fields of these perfectly polished Proof pieces are reflective, damage from the crack-out process would be readily apparent. 

Choose tools wisely

The first lesson you’ll learn is to choose the tools wisely that you’ll use to break open the slab.

Slabs are normally so tight that they may as well be welded shut, but the label portion of most slabs would seem to provide an entry point to twist and pry at a safe distance away from the coin. These replicas, however, already had the label portion of their slabs cut off. The remainder of the slab was still sealed tight by the heat generated when creating the cut.

I grabbed an X-ACTO knife and started slashing and prying at the plastic, trying to wedge the blade enough to loosen the tray with the embedded coin.

I quickly found the tiny knife to be no match for the sturdy, impenetrable plastic case. If I were to continue to use it, I would jeopardize the safety of my digits. 

My fingers are my livelihood, so I abandoned the X-ACTO knife and considered other options.

I angled a corner of the slab at 40 degrees against my work desk and pushed. 

Creeacccckkkkk, the plastic chimed. A fissure developed, but would not rupture. Craacccckkkk, the object hissed, bending but still not succumbing to the pressure. 

“This is going to be harder than I thought,” I allowed, before setting the slab down to consider my next move.

I had to admit it might be time to bring in some professional help, and so I next convened with my friend Larry, who invited me to his garage where a bevy of weaponry was assembled. 

Spying the circular saw, my eyes widened. 

“Maybe we should use that?” I questioned.

“You want me to cut right through the middle of the coin?” my friend asked, chuckling.

The smaller jigsaw was deemed too much as well, but the drill was deemed a possibility, if another, preferred option would fail us. 

The preferred tool, a Rockwell SoniCrafter, uses vibrations to drive the blade attachment in cutting whatever it may encounter, in this case the tough plastic shell entombing our “coins.” 

Don’t get too antsy

One can easily equip the SonicCrafter tool with an appropriate blade as a variety of blades and sanding attachments are available with the tool, the choice depending on the project. 

Once a blade was chosen and locked in place, it was time to grab one of the “coins” and start cutting.

Larry — an experienced practitioner with the SoniCrafter — made the first cut. Uhh yinnnnn yin yin yink, the machine sputtered, creating a chorus with the vibrating table while the pungent smell of burning plastic released. 

Without enough pressure on the tool the blade would barely make an impression, but apply too much pressure and the machine would shut down. 

Any tools like this will generate melting plastic from the friction, but I found that the heat dissipated quickly and the melted plastic was barely viscous, certainly not runny like, say, melted wax. 

Larry completed one cut through the plastic slab and a chunk fell away, revealing the geologic strata map that is a slab sliced open, layer of protection on both sides of the tray encircling the “coin.” 

A few more minutes, a few more cuts, and the replica was removed. 

The formerly entombed “1776 Continental dollar” looks as good as the day it was made (because it was probably made in the 2000s!).

The process isn’t laborious, but it does take time to be precise and avoid cutting too close to the coin. 

The fake 1804 Draped Bust dollar was our next item for removal. 

This proved a little more tricky, because its encasement had received my X-ACTO knife treatment. But Larry handed me the SoniCrafter, and it was my turn to know what it feels like to play with power tools. Just two cuts of the more appropriate blade helped free this fake.

Protect those fingers

To protect our fingers as best we could, we had decided to use a clamp to secure the slab during cutting.

Though the clamp we used was not optimal (the head on the clamp slid around a little bit), it did a fair enough job on the two pieces that I removed from their holders. 

A “1794 silver dollar,” our next quarry, was easily secured after 10 minutes of cutting. 

The final “coin” in our collection of modern replicas was an “1870-S Indian Head gold $3 coin” of uncertain composition, but its smaller size (when compared to the big would-be silver pieces) allowed more room to cut the slab without having to be as careful. 

Not all slabs are the same, and Travers offers insight at his website on what tools are most useful. 

According to Travers, a Numis­matic Guaranty Corp. holder should easily separate after a solid hit by a flat hammer on each edge followed by two twists.

Professional Coin Grading Service holders, he says, can be opened with sheet metal nippers, a pliers-type tool with a cutting edge perpendicular to the handle. Cut the holder on the edge, and the holder breaks in two. The insert ring with the coin then slides out.

In addition to these methods of removing coins from any type of slab, a band saw can be used.

With a band saw, you’d be able to leave the coin sandwiched in the holder, and not have to handle it. Persons who use this method make a few straight cuts, leaving squares of plastic on each side of the coin, which can be lifted off.

We achieved the same effect, however, with the SoniCrafter, a much safer tool than a band saw. 

Final thoughts

Once my final cut was made, I took a few photographs, the tools were put back and debris was thrown away. 

So what did I learn in the 90-minute “slab surgery”?

The whole exercise was elucidating — even if thousands of dollars weren’t at stake. If I ever doubted the resiliency of those plastic encapsulations, I learned firsthand how strong they can be.

Several precautions can reduce the potential for damaging a coin in this process, but the risk is real and should not be taken lightly. 

The wonder of whether the plastic would yield its bounty, and how quickly, was sheer entertainment for this coin nerd, but I’m going to leave real “slab surgery” to the professionals.

One final note — the reason everyone does this is to make money, right? 

With a little luck, during the next coin club auction, I think I can double — or maybe triple — returns on my initial investment.