The simple answer is no. It does deter it somewhat as it is more expensive to accomplish the fraud than it was before card grading became popular. Simply put, card grading makes the counterfeiter manufacture the encasement and flip after creating the fake card itself.
It is quite difficult to break open an encasement without leaving evidence of the procedure. When the plastic is bent in any significant way, is cut, or melted, proof is usually seen. The plastic “snows up” when bent or cut, and when melted, it warps (as all plastics do).
But what happens when an individual or group goes through the process of creating both the card, the flip, and the encasement. In this scenario the encasement is an actual help to the counterfeiter. It stops potential buyers from feeling the card stock to see if it’s inconsistent with the cardboard used in the original manufacturing of the card. The encasement also gives the buyer a false sense of security which usually leads him to pay less attention to the details of the card.
Two factors led to the popularity of graded cards. The first was to quell any debate between the buyer and the seller of a card. No more arguments on whether a card is Excellent or Near Mint, the grade is on the card encasement for both parties to see. The second, and more important factor, was the internet and online sellers such as eBay. Now collectors had a whole planet of dealers to buy cards from but with the inferiority of images compared to directly looking at a card with ones own eyes (and perhaps a magnifying glass), there was no assurance the grade a card seller was espousing for a card he or she was selling was the actual grade of the card. Grading cards eliminated that problem (or so the grading companies wish you to believe).
The main target cards for counterfeiters are the cards that have reached the high hundreds or thousands of dollars, but are not rare enough to raise suspicion when they show up online or at card shows. Cards from the late ’60s onward. Nolan Ryan’s, Rickey Henderson’s, and Cal Ripken Jr.’s rookie cards would be some good examples.
The card manufacturers are mostly letting their customers down when it comes to battling against counterfeited graded cards. What is the point of a serial number on the card if not to identify its owner? It obviously can’t be to stop counterfeiters as they just copy the same serial number for their fake encased card. Who cares if you can look up a serial number because unless the counterfeiter is an idiot his counterfeited card will come up as existing in the company’s database.
How to properly combat counterfeiting is to encourage people who own graded cards and submit cards for grading to register their cards on the company website so the company knows who owns what. Personal information doesn’t need to be made public, just that a serial numbered card is at present owned by someone. If they decide to sell the card they can show it on the company website as being sold on eBay or COMC etc. When another person decides he wants to buy the card he can contact the person through the auction site and also through the grading company website to make sure the card is authentic.
The result will be that if the buyer puts the serial number into the database it will come up as existing. He then can contact the owner through the website asking if he is selling the card and then contact him on the auction site to see if it’s the same person. This will reduce the sale of counterfeited cards enormously. At present none of the grading companies offer this service. Some offer a serial number look up as well as a registry you can join, but none offer what I have described in the last few paragraphs. It is a shame that the grading of cards was to counteract counterfeiting, yet it did nothing of the sort. It just added a new layer of cost to the pricing of cards. Hopefully the grading companies get their act together before the counterfeiting of graded cards becomes as prevalent as ungraded cards are.