Do collectors deserve to be ripped off?
DesertLizard
Posts: 702 ✭
Today I was in a local coin shop shooting the breeze with a new dealer who just bought the shop from a retired owner. It was a rather slow afternoon and I was pawing through his inventory while chatting. In about 90 min. no less than 4 people walked in wanting to sell their collections. Here's how it broke down:
Seller 1: Totally disorganized mess of well worn Indians, Lincolns, Barbers, Mercs, Walkers, etc. From where I was I did not see a single coin above AU55-58. No slabs of course. The dealer said he was not interested after spending almost 15 min. looking at the dates searching for something of value. The seller was upset and claimed her husband bought the "scare and rare" coins by mailorder over 10 yrs ago as an investment. He had paid $2,500. The dealers sighed and told her no again but then offered to place it on consignment at NO comission!! She said she need money now. He offered her $300 and she could not say yes fast enough. After she leaves we both felt sorry for her. As it turns out she had been there in the past trying to sell and the previous owner told her no while the new owner was in the shop. He told me she is having financial problems and owns tons of Franklin Mint garbage, plates, ingots, etc. Apparently she and her husband thought they were going to get rich selling it down the road.
Seller 2: Young guy comes in with a briefcase of well organized shiny coins. I later find out they were all in 2x2s and almost all cleaned raw Kennedy, Eisenhower and state quarters. Apparently he bought them from a coin shop in Littletown [ahem] and mail order from Coin World. No offer made. He too thoguth they were an antidote for the stock market.
Seller 3: Retired guy comes in with all coins in an album or binders. Mostly gold I saw from where I sat. Hmm, I thought I'll stick around and maybe see something I like. Apparently he bought most of his collection from a telemarketing group in Vegas in 1993-4. He claimed he spent $48,000. Owner had offered him $52,000. Most of his coins were nice MS64s 65s Saints but all common dates. After he left the owner showed me a price chart showing the 1915-s Saint in MS65 I believe, which has not budged in price since the mid 1990s. Ouch! The guy left saying he would think about it. But he did ask why the price was so low as he bought was gold was "low" and gold was now "high".
Seller 4: I was getting ready to leave and pay for my 2 coins when in walks a couple that looked like they were headed to a wedding. Super friendly and wheeling a suitcase filled with coins. I groaned and thought I will be here all night! Well as it turned out it was mostly "packaging". They had proof sets up the ying yang from Marshall Islands, Falklands, Botswana, China, Singapore, etc. No US. Again they claimed it was an investment. Did they know what they were buying ? They said they were told the sets were limited editions and rare. No offer made but they asked for a free appraisal, the owner lied and told them about $10,000 [or about $15k less than they paid]. They were disappointed but after they left he told me if they could find a buyer they would be lucky to get $2000 for the lot. Ouch!
I guess storefront dealers see this everyday. On the way home all I could ask myself was how can people spend hours and hours researching their new minivan or HDTV purchase but not think twice about dropping serious money on a collectible which has questionable investment potential.
Buyer beware? A knowledgeable collector is a "better" collector?
OK, maybe they dont deserve to be ripped off but greed comes into play in many times in these situations. Greed is not good and can cost you dearly!
Now here is an auction where the bidders obviously are hoping to score big [greed] and expect something for relatively nothing.
Sucker Auction
Seller 1: Totally disorganized mess of well worn Indians, Lincolns, Barbers, Mercs, Walkers, etc. From where I was I did not see a single coin above AU55-58. No slabs of course. The dealer said he was not interested after spending almost 15 min. looking at the dates searching for something of value. The seller was upset and claimed her husband bought the "scare and rare" coins by mailorder over 10 yrs ago as an investment. He had paid $2,500. The dealers sighed and told her no again but then offered to place it on consignment at NO comission!! She said she need money now. He offered her $300 and she could not say yes fast enough. After she leaves we both felt sorry for her. As it turns out she had been there in the past trying to sell and the previous owner told her no while the new owner was in the shop. He told me she is having financial problems and owns tons of Franklin Mint garbage, plates, ingots, etc. Apparently she and her husband thought they were going to get rich selling it down the road.
Seller 2: Young guy comes in with a briefcase of well organized shiny coins. I later find out they were all in 2x2s and almost all cleaned raw Kennedy, Eisenhower and state quarters. Apparently he bought them from a coin shop in Littletown [ahem] and mail order from Coin World. No offer made. He too thoguth they were an antidote for the stock market.
Seller 3: Retired guy comes in with all coins in an album or binders. Mostly gold I saw from where I sat. Hmm, I thought I'll stick around and maybe see something I like. Apparently he bought most of his collection from a telemarketing group in Vegas in 1993-4. He claimed he spent $48,000. Owner had offered him $52,000. Most of his coins were nice MS64s 65s Saints but all common dates. After he left the owner showed me a price chart showing the 1915-s Saint in MS65 I believe, which has not budged in price since the mid 1990s. Ouch! The guy left saying he would think about it. But he did ask why the price was so low as he bought was gold was "low" and gold was now "high".
Seller 4: I was getting ready to leave and pay for my 2 coins when in walks a couple that looked like they were headed to a wedding. Super friendly and wheeling a suitcase filled with coins. I groaned and thought I will be here all night! Well as it turned out it was mostly "packaging". They had proof sets up the ying yang from Marshall Islands, Falklands, Botswana, China, Singapore, etc. No US. Again they claimed it was an investment. Did they know what they were buying ? They said they were told the sets were limited editions and rare. No offer made but they asked for a free appraisal, the owner lied and told them about $10,000 [or about $15k less than they paid]. They were disappointed but after they left he told me if they could find a buyer they would be lucky to get $2000 for the lot. Ouch!
I guess storefront dealers see this everyday. On the way home all I could ask myself was how can people spend hours and hours researching their new minivan or HDTV purchase but not think twice about dropping serious money on a collectible which has questionable investment potential.
Buyer beware? A knowledgeable collector is a "better" collector?
OK, maybe they dont deserve to be ripped off but greed comes into play in many times in these situations. Greed is not good and can cost you dearly!
Now here is an auction where the bidders obviously are hoping to score big [greed] and expect something for relatively nothing.
Sucker Auction
0
Comments
B.
A Tax is a fine for doing good.
With the exception of gold and silver, coins have NO intrinsic value. Coins are worthless.
But because some people are willing to forgo other goods in order to collect coins, and that group of people determines the value of coins by giving up other things so they can own the coin. You’re only going to sell to that same group you bought it from.
So for a collector to be investing in coins should be secondary.
Otherwise you're an investor and as with any investment they need to be knowledgeable about the market they are investing in because you know what happens when a fool has money.
My posts viewed
since 8/1/6
Real shame about those people. Seems only the gentleman with the gold has a chance to come out whole.
However, none of these people sound like collectors. They sound more like accumulators or (poor) investors.
A collector is not buying a coin for resale value down the road, he is buying it for his personal enjoyment, on which no price can be attached.
1. An old lady comes in, the "grandmotherly" type. She's hefting a bag that looks a bit heavy for her, and she sits it on the counter. The dealer opens the bag to find plastic baggies full of coins...he gets the baggies out and we start sorting through them. 6 out of 10 baggies were common circ Kennedys, another two were SBAs that came out of change, and the last bag were quarters and dimes from the 60s and 70s. One single silver quarter came out of the bags. The lady explains that her husband had died and this stuff was in the closet. She said he had spent a lot of time through the years accumulating these, and evidently wanted her to have them to supplement her income after he was gone. In the nicest way possible the dealer explained that all of these coins were still easily available at face value from the bank. The lady was disappointed, but the dealer was nice enough to cash them in for her and she walked away with money that folds. BTW, he gave her over his normal buy price for the quarter just to make her feel good.
2. A guy comes in with a box...not a cardboard box, but a nicely put-together wood box someone would build for shop class. The dealer opens it to find sterling bars of silver. The guy explained that he had been given these from a dead uncle who had subscribed to some service that sent them to him every month. There must have been a couple hundred small sterling ingots - about half an ounce apiece. The dealer added them up, called for spot, and calculated the buy price. The guy accepted, but it was obvious that he thought there would be more value in them than melt.
3. An old couple comes in, each hefting a small suitcase. We open the suitcases to find roll after roll of each denomination. This bunch took nearly three hours to sort, with the help of the dealer's employee and two regulars. After finishing, we came to a total which they didn't really like. It was basically melt stuff, common circ wheaties, a few buffalos, and a hoard of Jeffersons, one single 1950D in the pile. They thought these coins were old enough and they had been saving them long enough that they could send the grandkids to college on the money they reaped from the sale. They spoke of having remembered his father doing the same thing about 20 years ago, and he made a fortune on it. What happened is, his father had saved all his change for a number of years, and when the Hunt Brothers thing was going on, he cashed in and made it off big. They were just pulling a monkey-see monkey-do. Unfortunately their outcome wasn't nearly as fruitful. For two suitcases full of relatively beaten silver and wheats, the dealer paid just over $1,000...not even a single semester worth at a junior college. They would have been better off buying stock in the good ole days!
The Lincoln cent store:
http://www.lincolncent.com
My numismatic art work:
http://www.cdaughtrey.com
USAF veteran, 1986-1996 :: support our troops - the American way.
It's really sad because the books are out there (as are coin clubs). I guess the best we can hope for is that more folks will find sites like this one where they can get some honest advice.
Check out the Southern Gold Society
<< <i>would u really call them collectors? i mean yes they own coins, but they know next to nothing about them and they are using them as an investment. i would call them rare coin/ precause metal investors, and yes they deserve to be ripped off, because they did not spend time researching their investment. >>
That statement is brutally true...but as a business person it's hard to explain to the ignorant that you're not trying to rip them off. You're just buying what they have at fair market value. It's really hard to do with the right amount of tact, I've been standing behind the counter helping out with dozens of these acquisitions.
The ones who really get ripped are the ones who answer the ads in the magazines and the shopping channels on TV for "rare 100 year old silver dollars in VERY GOOD condition for ONLY $29.95". Most of the people who sucker into those deals are the ones who wouldn't know how to look it up...the older generation who were raised in a time when telling the truth was paramount to doing business and staying in business. They are the only ones to really feel sorry for. But alas, they are not "collectors" either. Anyone serious about collecting coins is going to buy at least the Red Book to get started. Although not a very good guide, it's better than listening to the ads.
The Lincoln cent store:
http://www.lincolncent.com
My numismatic art work:
http://www.cdaughtrey.com
USAF veteran, 1986-1996 :: support our troops - the American way.
But according to some people on the Reg set board, coins are a better investment then stocks!
You are right however, I really have a hard time feeling sorry for some of these people (like seller #1). This is a typical case of being greedy, buying things they think will make them alot of money, not learning up on the topic, etc, etc.
JJacks
If the buyer will enjoy the coin(s) and they like your price, then that's fine. If you tell them something that is not true in order to sell it to them, then that's where the line is crossed.
Not all sellers (of anything, not just coins) are ethical.
Stupid is as stupid does.
Coppernicus (Mike)
Lincoln Wheats (1909 - 1958) Basic Set - Always Interested in Upgrading!
The art of deception in business can be found in every business, with the coin industry being one of them. I own a payroll company and do the payrolls and benefits for hundreds of business's of all types. All industries and business's are susceptible to con men and fraud.
People hype multi-level schemes, investment opportunities, land, stocks, bonds....coins are another vehicle the unscrupulous use to part the trusting and ill informed of their hard earned money.
I bought my wife a .67 Diamond for $1200.00 (can't remember the color or clarity, but it was good) the diamond fell out and we decided to replace it with a pretty zirconian and sell the diamond for something useful. Well... seems the diamond has a $1200.00 value when you want to buy one with your money, but try and sell it to anybody in the know and good luck amigo trying to realize a small fraction of what you paid (I hear it is at least a 220% market-up after the wholeseller sells to the retailer).
I may still buy diamonds, but I will buy them knowing that a hardened turd I find on the ground has as much value, and that the diamond purchase is for enjoyment only.
Damn diamond monopoly!
Tyler
For the Morgan collectors - The Morgan and Peace encyclopedia by Van Allen and Mallis
What would your slabbed coins be worth if the grading services went out of business? What would your coins be worth if the Internet was taken offline for good?