Most career coin dealers are honest, reliable people who have their customers interests at heart, and understand their fiduciary responsibility.
Whenever there is easy money to be made however, there will always be opportunistic criminals, eager to take advantage of trusting, mostly
elderly investors, many who lack true investing savvy.
Some so-called “coin dealers” are certainly not professional numismatists, nor are they concerned about their customers (victims) best interests. These are con men and schemers who work on the fringes of the business, looking to make an easy buck from the hard work and assets of their victims. Most of them know very little about coins or real markets, but work from a scripted sales pitch offering questionable sales tactics, questionable products and glorified visions of “big profits!
In actuality, victims are left with over graded, over priced and sometimes even counterfeit coins!
The three most important aspects of a coins value are misrepresented in most of these sales pitches. These three are condition or grade, rarity or value, and demand. These are key factors to understand in making a successful investment.
Fine distinctions in condition or grade can make a huge difference in value.
Rarity is important but is not really present in most promotions because quantities are needed to make a successful sales promotion. Quantity does not equate to rarity! Rarity is fairly easy to check with the multitude of resources on the internet today. Auction records are generally available to check for truly rare items. Demand is the biggest factor, because even if you have a rare item, if it has little demand, rarity doesn’t matter, and it will be valued accordingly.
Some dealers use their own grading system. Some use commercial or fringe grading services that have standards that are less than acceptable in the legitimate marketplace. Misrepresentation of condition is an abuse that occurs regularly.
Professional Coin Grading Services (PCGS) and Numismatic Guaranty Corp (NGC) are the two prominent independent services that have wide acceptance as the “standard bearers” of the coin industry. If you are buying certified coins, and you should if you are not experienced, insist on these.
Overpricing and up-selling or “bait and switch” are two methods widely used by unscrupulous marketers to increase their profits. “Churning” is another favorite ploy. Dealers find out what the customer has already purchased, offer them a tidy profit, then convince them they have a “better” product to offer in trade. Then the dealer grossly overcharges the customer for the new product the customer trades up to.
False claims about value, profit potential, and buy back or return privileges round out the “mischief”. Watch out for hidden fees and charges as well.
Get every claim in writing, and always read and be sure you understand the terms of sale or purchase. Be careful however of the guy who is the “closer” because their job is to make sure customers sign or state that they understand they are being cheated or overpaying essentially. Schemers love “fine print”.
Remember, fine print is nothing more than a contract to protect the “seller”!
Research all offers made to you. A highly paid celebrity spokesman does not necessarily mean honesty or great value. Do your homework, check internet sales for similar items or consult your local dealer for an opinion.
Enter a companies or salesman’s name on an internet search engine. You might be surprised how much information is out there about people (yourself!). Check customers experiences on blogs. Don’t be afraid to ask for references.
Take time to study the marketplace and choose your dealer carefully! If you do encounter an issue or problem with a dealer, try to resolve it with them first. You will have done your best, and then contact the proper organization if you don’t get results! If you buy through the mail, the postal inspector can help you. If buying online, the portal you purchase through might be of help, such as eBay or Collectors Corner. If you can’t get results there, contact the Attorney Generals’ office or the Commerce Department in the state you purchased from.
Search for dealers through professional organizations like the Professional Numismatists Guild (pngdealers.com) or the American Numismatic Association (money.org). Look for dealers with at least 10 years experience and a full time office or store.
Finally, never buy from anyone calling you with a great offer, a TV commercial offering free silver if you call right away, or radio ads that tell you what a great deal you can get if you act now. Remember, there is no Santa Claus in the coin and precious metals business. You can find many reputable dealers however if you just do your homework!
Gary Adkins Associates, Inc.
Gary Adkins is a respected national dealer located in the Minneapolis area with over 50 years serving clients with honesty, integrity and reliability. You can contact him at www.coinbuys.com or call toll free at 1-877-264-6383 Mon-Fri 9am-5pm cst.