The leather sheaths on both the San Mai III and the SK5 versions all scratch up the sides of the blade. My SMIII is all scratched up on both sides of the blade from the sheath. If you got it to collect, then maybe you want to return it (but then you should not ever use the sheath when you get a new one). If you're going to use it, then it's not a big deal. The 420J stainless on the outside of the blade is very soft and gets scratched up like crazy from almost anything. My advice is to use it. It's just a knife, and you only live once. Use and enjoy!