Learn Lessons from Others
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Sit back, and let me tell you a tale. The story is fiction to protect the innocent and the not-so-innocent, but the core elements of the story quite frequently happen in coin shops around the country.
Ralph is working behind the front counter in his coin shop when a customer presses the button requesting entry into the shop. Ralph pushes the switch releasing the lock and allows the customer to enter.
As the customer walks with a purposeful swagger toward the counter, Ralph says, “Good morning, what can I do for you today?”
George, the customer, pulls a coin from his front pocket, places it on the counter and belligerently replies, “I’ve researched this coin on the internet and found it is worth between $1000 and $1800. I want to sell the coin, but I won’t take less than $900 for it.”
Rather than respond to George’s aggressive tone, Ralph picks up the coin and looks at it, first with regular eyesight, then with a strong loupe. Ralph closely assesses both the obverse and reverse. Then he says, “OK, you’ve got me. I’ll pay you $900 for the coin.”
George takes the money and exits the store. He smiles and thinks, “I showed him. I did my research and got the price I wanted for my coin.”
Ralph waits until George leaves before he puts a big, happy smile on his face. You see, George didn’t do enough research to know that his coin was a rare variety and worth several thousand more dollars than the $1000 to $1800 range he determined his coin’s value to be.
Now, before you get angry at Ralph for “taking advantage” of George, think about this from a business perspective. At no time did George ask Ralph what his coin was worth. George declared the price he wanted for the coin, and Ralph agreed to pay.
Ralph, as a businessman, is not obligated to pay a higher price than a vendor places on his goods. In this case, George was a vendor selling his goods, a coin.
If you’re still miffed about George’s plight, put the shoe on the other foot for a minute. You visit a coin shop and see a coin you want at a really good price, a price much less than you expected to pay. Would you offer the dealer a higher amount of money or would you buy the coin at the price listed? Or, would you try to negotiate with the dealer to reduce his price even further? Be honest with yourself.
Now, let’s get back to the lesson to learn from George’s experience. He actually offers two lessons – one from a good practice and one from a bad habit.
George’s good practice includes research to determine the collectibles’ worth before attempting to sell them. But, George negates his research with the bad habit of thinking he learned and knows all he needs to know. He should have asked Ralph what amount he would offer to buy the coin. And, even if Ralph countered with, “What do you think it is worth,” George should have said, “I’ve done some research, but I’m interested in your offer.”
Coin dealers won’t offer to buy at market rates. They do have to make a profit. But, most coin dealers in their shops and at coin shows offer fair prices for rare coins. The research you do helps you make sure they offer fair prices.
Ralph and George are fictional characters, but many variations of this same story happen frequently. If you plan to sell, do your research beforehand, then ask the dealer what he will pay for the coin(s).
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Mercury Dimes
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At the show Sunday, dealers displayed slabbed 1916D Mercury Dimes.
Interestingly, there’s a story going around coin circles about someone taking Mercury Dimes (not a 1916D, we hope) to a coin roadshow somewhere - one of those that advertizes for you to bring your gold and silver coins and jewelry to sell to them at their rented hotel rooms.
It seems this person with the Mercury Dimes was told that the dimes were not valuable since the “W” mint mark (for the US Mint location in West Point, New York) was not valid on Mercury Dimes. Well, it’s true that the West Point, New York mint did not mint coins during the Mercury Dimes era, 1916 through 1945.
In fact, the West Point location began as a storage facility for silver in 1937 and became known as the “Fort Knox of Silver.” It did mint cents from 1973 to 1986, but it did not become an official mint until 1988. Still a storage facility, today the West Point Mint strikes gold, silver and platinum coins for commemorative and bullion sales.
Oh, in 1996, the West Point Mint did mint a dime, but it was an uncirculated Roosevelt Dime for inclusion in that year’s mint set.
But, why would the hotel buyer claim the Mercury Dimes had “W” mint marks?
Well, today’s coinage generally has the mint mark located very prominently on the front, obverse, of the coin, primarily near the date. For the Mercury Dimes, the mint mark was placed on the reverse near the edge and just to the right of the “E” in “ONE.” Actually, the mint mark can be difficult to find without a loupe or magnifying glass.
For the Mercury Dime, the artist’s initials are easy to see on the obverse just to the right of Liberty’s neck. Of course, the initials are “AW” for Adolf A. Weinman. Lacking numismatic knowledge, the hotel buyer mistook the artist’s initials for a mint mark. Though, we’re not sure what he thought about the “A” in the “AW.”
Most people who know and understand coins will not take coins they want to sell to a hotel buyer. Hotel buyers are much different from hotel coin shows. Coin shows have many different, knowledgeable dealers with a variety of interests who sell and buy at the show. Hotel buyers, on the other hand, represent a company or companies who only buy. They also only buy at rates where they can make a significant profit even after they pay their hotel, travel and business expenses.
If you plan to visit a hotel buyer to sell gold or silver coins or jewelry, make sure you research what you are selling such that you know an approximate worth and can readily accept or refuse their offer.
Plus, if you spend a little time on your education, the hotel buyer’s comment about the “W” mint mark on the Mercury Dimes would easily be recognized as nonsense.
Oh, by the way, if one (or more) of those Mercury Dimes was a 1916D, then you would want to sell to someone who understands the numismatic values not just the silver melt values. A low-end 1916D could be worth $1000, and a high end could be over $40,000.
The late Jim Rohn said, “Formal education will make you a living; self-education will make you a fortune.” In this case, a little self-education could “save” you a fortune.
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Cleaning Coins – Don’t!
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Another question from the show this weekend came from a novice to coin collecting, buying, selling and trading.
Why do coin dealers and collectors tell us not to clean our old coins?
Let’s say your old coins look dull and dirty, but their design shows clearly with very little wear on the either the head’s design, the tail’s design, the year or the rim. To the untrained eye, the coin doesn’t look pretty and shiny. But, to the numismatist, that old coin without very much wear may be a rare (read valuable) find in that condition.
If you’re selling an old collection, your best customers – the ones who will pay the most – are the coin dealers and numismatists. Numismatists look for coins as close as possible to their original state as when the coins left the Mint. This does not mean they need to be shiny, instead they need their original design clarity.
What happens when you clean coins? Whether you polish them with a brush or abrasive cleanser, you remove metal, thus part of the design clarity gets polished away.
“Oh, but,” you’re thinking, “what about those commercials on TV about dipping coins into liquid cleaner where they come out shiny?” Even dipping coins removes part of their exterior metal – that is the design – as well.
Now, what if your coins are not that nice. They’re both tarnished and worn. In that case, their value resides in their silver content not in their numismatic value. Whether cleaned or dirty, their value exists in their melt value for the silver.
You can save yourself the time and effort for cleaning them. It doesn’t help. Plus, if you are really industrious and clean them too much, the already worn coins may not weigh as much as expected. Therefore, you may not receive as much for the coins’ silver content.
Now, having a little fun…
Do you know how parents get frustrated with their children’s “why” questions and respond “because I said so?”
Similarly, the short answer to the “why shouldn’t I clean old coins” question is “because the numismatists said so!”
Closing on a serious note, do not clean your old coins. At best, you waste your time. At worst, you dramatically decrease their resale value from numismatic rare valuables to just melt (for silver) or to just pocket change (for clad coins).
Just remember, “ugly” is in the eyes of the beholder. It’s not important what you think is pretty, but it is important what the numismatist thinks.
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Rare Gold and Fingers
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He’s done it again.
Several weeks ago, we talked about Glenn Beck using gold coins on his TV show and handling them without protection – either protective holders or gloves.
Congressman Anthony Weiner recently attacked Goldline and Glenn Beck saying that they use scare tactics to get people to buy gold.
That, of course, gave Glenn Beck another opportunity to bring out his gold coins. If he wants to handle his personal coins with his fingers and put damaging body oils and fingerprints on the coins, that’s his prerogative. But, unfortunately, his doing so will give those less educated about coins and numismatics the wrong idea.
You should NOT touch rare and/or valuable coins with your bare hands. The coins should be in protective holders. If they are not, then use white cotton gloves to hold the coins. And, those cotton gloves should be clean of any chemicals.
Glenn Beck can be scary in what he says and how he says it; however, many times his scary comments have correctly predicted future events.
Is he using scare tactics to get people to buy gold? Well, if he is, then a lot of other people in the investment industry, the gold industry and in the halls of economic education are also scary as they advocate buying gold when times – such as now – get financially rocky.
But, the Beck versus Weiner brouhaha is not the focus, the coins are.
Perhaps the coins Beck handles on his show are lower grade and their value is in the gold content not the coins themselves.
Still, many people watch his show and will deduce that it’s okay to handle any raw coins with bare fingers.
Not good, not good at all. At the very least, it makes all true numismatists cringe at the disrespect for the coins. At the worst, the coins decrease in value, and depending on their rarity and the damage caused by the bare fingers, the decrease in value could be significant.
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Flea Markets & Coins
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Flea markets are curious places. Depending on size and location, the merchandise and the vendors vary greatly. Plus, the prices can be economical, on par or expensive. In other words, remember the saying “buyer beware.”
We visited one this past weekend that is billed as Georgia’s Largest Flea Market. To say the least, it presented a diverse mix of cultures and languages along with a large variety of vendors and goods.
For example, several vendors offered live animals including ponies and horses for rides, dogs, sugar gliders, birds, ducks, chickens, turkeys and peacocks for sale - some as pets, some as food. Other living products included reptiles and live plants from vegetable plants to lucky bamboo to bonsai to landscape shrubs and trees.
Throughout the market, different vendors set up booths with boxes labeled $1, $2, and up with nothing over $5. Some of their goods were interesting, some were obvious knock-offs of well-known brands, and some were Made in China with poorly translated English labels. Other goods without an English label became a challenge to figure out what benefit they provided.
In addition, vendors offered furniture and jewelry and clothing. The clothing displays ranged from G-rated to R-rated to not quite X-rated. Other booths included fresh fruits and vegetables, eggs, canned goods, cleaning supplies and hygiene items.
In the midst of the organized chaos, one vendor offered coins for sale. Display cases held row after row of 2×2 holders with type coins in several grades. In their cases, they offered a variety of US Mint collector sets too.
It’s rare for us to see the retail side of the coin business or to see it as an observer rather than a participant. This business provided a totally different view.
As with many businesses, one wonders how this weekend flea market coin business survives. Is this a hobby for him, or does he also have a brick and mortar shop? Or, does he work at another, unrelated business during the week? Does he get enough paying clientele to pay for the booth along with his and his employees’ time and effort?
This gentleman faces the added challenge of the merchandise being unprotected, other than the showcases, in a busy and high-traffic market. But, of that traffic, only a very small percentage appears to be potential numismatic clients.
On the other hand, perhaps numismatists are not his clients – especially knowledgeable collectors. You see, his prices were not realistic in the current market.
For example, he offered a four-piece Westward Journey set in the original US Mint collectible packaging for $175. But, in today’s market, you can purchase one of those sets for a fraction of that cost. Even the 2011 Red Book, whose value numbers are already out-of-date when printed, shows a value of less than half his number for the 2004 set and less than one quarter for the 2005 set.
Is he not aware of the current market or is he trying to make a profit regardless of the current prices? On the other hand, what does he do when the market goes up? Do his prices increase to follow the upward trend or does he keep his profit margin constant?
Since his coin business was none of our business, we chose just to observe and to keep our curious questions to ourselves.
But, the experience highlights the need for collectors to be careful, especially about impulse buying, and to keep educated about the current market.
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Pocket Change
Today’s post brought to you by: Golden Eagle Coins 100 Gram Gold Bars
Did you know that you can have $1.19 in pocket change and not be able to provide $1.00 in change?
How can you have more than $1.00 but not be able to produce a dollar’s worth in change?
Very simple – no nickels!
Three quarters, four dimes and four pennies equals $1.19. This combination of change also equals the largest set of coins that won’t make a $1.00 in change. The closest you can get with this combination is $.99 on the low side or $1.05 on the high side of $1.00.
Let’s see: three quarters, two dimes and four pennies equal the $.99 with two dimes left over. Or, three quarters and three dimes equal the $1.05 with a dime and four pennies remaining.
Or, taking the half dollar as part of the coinage, one half dollar, one quarter, four dimes and four pennies would yield similar results.
But, what happens when you introduce a nickel to the mix? What is the largest combination that won’t provide change for a $1.00?
How about four pennies, two nickels, one dime and three quarters for $.99. If you add any one of the coins, you will be able to make $1.00 in change.
Now, let’s add the half dollar. With four pennies, two nickels, one dime, one quarter and one half dollar, you will have $.99. Again, adding any one coin yields the ability to make $1.00 in change.
So, quiz your friends. Ask them to give you the largest total money and a corresponding combination of coins that won’t yield change for a $1.00.
Today’s post brought to you by: Golden Eagle Coins 100 Gram Gold Bars
2009 Dimes
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Have you seen the 2009 minted dimes?
Recently, a dealer in Florida went to his friendly neighborhood bank and found nine rolls of 2009 dimes. Now, a roll contains 50 dimes for $5.00 face value.
Knowing the scarcity of 2009 dimes, this gentleman purchased all nine rolls at the bank for $45. Immediately, he sold each roll for $50 – ten times what he paid per roll.
Wow…900% profit!
Some dealers sell individual 2009 dimes for $1.75 each – all because of their scarcity.
Why are they scarce?
Per the US Mint’s 2009 Annual Report, “Our circulating coin production was at a 45-year low with fewer cash transactions because of the slow economy and Americans cashing in coins they’d been saving.”
They go on to show that fiscal year 2009 delivered 358 million dimes to the Federal Reserve for circulation. That’s roughly 33% of their 2008 fiscal year delivery of 1,070 million. But, their FY 2007 delivery included 2,247 million dimes making FY 2009’s production roughly 16%.
But, this is not calendar production as their their fiscal year ends on September 30.
What if we look at calendar year production numbers – 2009 versus 2008.
| Dime Production | 2009 | 2008 | Percent |
| Denver | 49.50 | 637.50 | 7.8% |
| Philadelphia | 96.50 | 413.00 | 23.4% |
| Total: | 146.00 | 1050.50 | 13.9% |
From a numismatic perspective, that’s very interesting.
The total circulating dime production in 2009 was less than 14% of 2008. In addition, it appears the Denver minted coins will be more difficult to find as they minted roughly one third of the 2009 circulating dimes.
Remember, not always, but generally, the law of supply and demand rules. Smaller supply and bigger demand equals higher prices. (Hint: look for 2009 dimes with a “D” mint mark.)
In addition, take a look at another comment by US Mint Director Moy in the annual report, “The Federal Reserve Bank and the United States Mint forecast continued low circulating coin demand for FY 2010.”
Not only will the circulating coins of 2009 be valuable from a collector’s viewpoint, so will the 2010 minted coins.
What fun!
This would be a great time to generate treasure hunting interest in pocket change again. Some people don’t have a strong collector gene, but most folks become easily intrigued by treasure hunting.
Remember, if you find coin treasures in pocket change, make sure you protect the coins from any further wear. Wrap them in protective surfaces (e.g., handkerchief, tissue, note paper) until you can protect the coins properly.
And, throwing them in your coin jar when you get home is not “protecting them properly.” If you don’t have numismatically approved containers, keep them wrapped in chemical-free cotton or paper.
Enjoy the treasure hunt!
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RECALL: Lewis and Clark 2004 Coin and Pouch Set
Today’s post brought to you by: 2009 Proof & Mint Sets
On their Consumer Awareness Hot Items page, the US Mint currently has an article about the 2004 United States Mint Lewis and Clark Coin and Pouch Sets Containing Pouches From the Shawnee Nation United Remnant Band of Ohio.
The Shawnee Nation United Remnant Band of Ohio made some of the Handcrafted American Indian pouches included with the 2004 Lewis and Clark Coin and Pouch Sets. Though they were a member of COTA (Circle of Tribal Advisors) when selected to make the pouches, they were not officially recognized by federal and state authorities as an official Indian tribe. Furthermore, their artists were not recognized as official Indian artisans. As such, their artistry cannot be marketed as handcrafted by an American Indian under the Indian Arts and Crafts Act.
A limited number of the 2004 Lewis and Clark Coin and Pouch sets were sold from September through December 2004. The pouches were made by a number of different Indian artisans, and their names are included in the set. The tribe of the artisan can be found on the included Certificate of Authenticity.
Only those 2004 Lewis and Clark Pouch Sets with pouches made by Shawnee Nation United Remnant Band of Ohio artists are being recalled. On their web site, the US Mint offers two different types of returns for the pouches not officially American Indian handcrafted.
You can return the whole set – coin, pouch and packaging showing the Shawnee Nation United Remnant Band of Ohio made the pouch via the following US Mint instructions (COA = “Certificate of Authenticity”):
“Members of the public who own a 2004 United States Mint Lewis and Clark Coin and Pouch Set containing a pouch produced by the Shawnee Nation United Remnant Band of Ohio may return the set, along with the COA, to the United States Mint. Those who return such sets to the United States Mint will receive a payment of $130.00 for each set, representing the original sales price of the product ($120.00), plus $10.00 for each set to defray shipping, handling, and insurance charges.”
If you want to keep the coin, but want to be re-imbursed for the pouch, you must include the pouch and certifying paperwork:
“The Owners of a 2004 United States Mint Lewis and Clark Coin and Pouch Set who desire to keep the Lewis and Clark Expedition Bicentennial Silver Dollar may return the pouch, along with the COA from the Shawnee Nation United Remnant Band of Ohio, for a prorated refund of $90.00, representing the prorated sales price of the pouch ($80.00), plus $10.00 for each pouch to defray shipping, handling, and insurance charges.”
They also add pertinent shipping instructions and remind you to include your own information in the package:
“To receive a refund, send the 2004 United States Mint Lewis and Clark Coin and Pouch Sets, or pouches, along with the COAs indicating that the pouches were made by a member of the Shawnee Nation United Remnant Band of Ohio, by insured mail or overnight delivery to United States Mint, ATTN: Indian Arts & Crafts Return, 801 9th Street, N.W., Washington, DC 20001. Inside of the shipping package be sure to include return address mailing information for the refund, along with a note indicating that the item is to be directed to the Indian Arts & Crafts Return.”
This detail and more can be found on the US Mint’s web site: 2004 United States Mint Lewis and Clark Coin and Pouch Sets Containing Pouches From the Shawnee Nation United Remnant Band of Ohio.
Today’s post brought to you by: 2009 Proof & Mint Sets
Bait and Switch
Normally, you hear about bait and switch tactics being used by merchants. However, in the coin collecting world, bait and switch can be used by customers as well.
What is bait and switch?
In general terms, bait and switch occurs when a merchant advertises a great deal on one or more products to interest buyers. When customers attempt to purchase this great deal, the merchant is out of the special but has an alternative you can buy. The alternative may be more expensive or it can be lesser quality, either way, the merchant gains a bigger profit margin.
The “baiting” grabs your interest; the “switching” provides greater benefit to the seller.
Now, you’re thinking, “How does this work with the customer doing the baiting and switching?”
Well, it’s simple really, and it’s frustrating, too, for the sellers.
Let’s look at an example between Dealer Jim and Numismatist Bill. Jim can be a large dealer with a store and staff, or he can be an individual seller on eBay. Bill, the buyer, can be another coin dealer buying long distance from Jim, or he can be an indivdual collector.
Either through the internet or other marketing vehicle; for example, cable TV shows or coin magazine ads; Bill buys a coin from Jim. Per the agreement, Jim ships the coin to Bill.
Time passes, Bill decides he is unhappy with the coin and returns it to Jim. Upon receipt of the coin, Jim notices the packaging is different from what he sent Bill. Looking more closely, he notices the coin is not the same coin.
In some cases, Jim confronts Bill with the fact that the returned coin is not the same as the one sent. In other cases, he puts Bill on the “do not sell to this person” list. And, in still other instances, Jim takes the fight public (in chat rooms and forums) to alert others to Bill’s perfidy.
Jim’s actions depend on the situation. Is the dollar value lost worth the cost of the time to fight the issue? The Bills of the world gamble that the Jims will just let it go. But, sometimes, the Jims of the world get fed up with the Bills and fight the good fight to get either their coin or their money back.
If you are a buyer and do this bait and switch with coins, shame on you. Remember the adage, “What goes around comes around.”
If you are a seller, technology helps you especially with small quantities. Yes, the effort adds time to the process, and whether you do it or not depends on your risk tolerance and how much you’ve lost in the past.
What technology? The digital camera.
Before Jim sends the coin to Bill, he takes pictures of the coin, obverse and reverse, and of the box and certificates. He copies the photos to his computer and names the files with identifiers pertinent to Bill, the coin and the date. He can include these pictures with the coin in the shipment to Bill, he can send Bill the pictures via email, or he can note the filenames along with a short description of the pictures on the packing slip to Bill. In all cases, Bill is aware that Jim has photos of the coin.
The deceit of the Bills of the world exists. Sometimes the extra effort to stop them, either before or after they try their dishonest tricks, just isn’t worth it. Other times, the extra time and effort of preventative measures can save you from a large loss.
A Cautionary Tale
Among the coin dealer community, comments occur more and more frequently about people coming into their shops presenting coins they want to sell that were purchased on eBay. Unfortunately, the coins are counterfeit.
Due to the current popularity of gold, and to a lesser degree, silver, many of the counterfeit coins replicate popular gold and silver coins. As technology advances, the counterfeit process becomes more difficult to detect at first look. Some coin copies contain the right metal, just not enough of it. Others have gold plate over a non-precious metal. Still others have minute, but telling, signs that to an expert indicate the coins are not real.
Now, this is not to say that every coin presented on eBay is counterfeit. Many ethical coin dealers use eBay as a sales channel along with many ethical numismatists.
However the anonymity of the Internet makes it much easier for counterfeiters to take advantage of the unwary and to prosper with their illegal activities. (Take a look at our article Buying Coins on the Internet.)
Another important point to remember, other countries do not have the same counterfeit laws as we do. This means the counterfeiter can legally make and sell copies of US coins on the global realm of the Internet. However, those counterfeit coins will not be valuable, and not worth what you paid for them, in the numismatic or investor market.
Regrettably, the eBay rules, identified with good intentions to protect both the buyers and the sellers on their system, make it difficult for the ethical buyers and sellers to get coin counterfeiters removed.
What can you do to protect yourself?
Well, perhaps the easiest, though not the most practical, is not to purchase any coins via eBay or the Internet. That seems drastic considering the many ethical Internet coin marketplaces. However, coin shows and coin shops offer the opportunity to view coins closely with your own eyes, and a loupe if you desire, before you purchase the coins.
The next option requires research – lots of research – to determine the reputation and ethics of the coin seller. First, you can research the internet to see what, if any, comments people have made about the seller. But, be careful here, too. The Internet allows people to make comments either true or false. That’s why you need to do lots of research.
Ask other numismatists, such as coin club members, if they have bought anything from the seller. Visit coin forums on the Internet and ask what people know about the vendor.
Check the seller’s memberships in the coin collecting community.
Determine if they are a member of any best business practice groups, especially those on the Internet.
What if you cannot find much information, and you still want to pursue the coin that interests you?
Determine your risk tolerance. Are you willing to gamble the money for the coin? It is gambling in that you don’t know if you will receive value for your money or a counterfeit.
If the value is beyond your risk comfort zone, but the coin calls to your collector gene, purchase a coin of lesser value from the seller as an experiment. This won’t prove beyond a shadow of a doubt that the seller is ethical, but it will give you an example of their wares.
Basically, the Internet offers many wonderful opportunities in the comfort of your own home. But, you need to be constantly vigilant for possible bad experiences and loss of money as well.
