Varnish is a softer and therefore more flexible finish material. While there are for some players, generous tonal advantages to the varnish finish, this option is not for everyone. Unlike lacquer, the process for applying varnish is not conducive to "finish touch-ups", meaning the builder cannot control minor imperfections such as small pinholes, bubbles, or sinking. While Collings takes great pride in their exceptional standards for fit and finish, it is very challenging to apply and buff varnish to the level of cosmetic "perfection" consistent with their lacquer finish instruments. The varnish finish has a beautiful, rich luster, and resembles the color of a well aged vintage guitar (without the finish checking).
A varnish finish is not as hard as lacquer, so one could argue it is not as protective as lacquer finish. The alkyd resin-based varnish finish is very slow to cure and can be relatively soft on new instruments. The finish will continue to harden as the instrument ages, though new varnish instruments can be more vulnerable to light scratches and imprinting. By its very nature, varnish can shrink, wrinkle, and/or dull over time and is not likely to maintain a "new" appearance as well as lacquer instruments. With that said, the varnish finish allows the instrument to vibrate more freely and can produce a more responsive instrument with a greater depth of tone.