Hello Tim,
Thank you for the information and I am happy to answer.
This may depend on the original image quality and the Image compression type you selected in W3 Total Cache Image Service options.
If you selected lossy Image compression type – Quality may degrade with a higher ratio of compression that can go up to 95%
If you selected lossless Image compression type – No loss of quality however the compression ratio is slightly lower.
I hope this helps!