Ethics Question. Yes it is on topic! (About Coin Dealers)
fcloud
Posts: 12,133 ✭✭✭✭
I spent about three hours at a coin dealer today where he told me about a youth that found a 1942/1 Mecury in a book that the dealer did not know was in the book when he purchased the coins from a local person. The youth told the dealer about the coin and was given a discount on the coin because the dealer didn't know it was there. So far it sounds fair! Now, the dealer knows whom he bought the coin from, so I suggested he call and tell the original seller and give them their fair share. Isn't it appropriate for a dealer to pay the fair price to a seller after the fact? We recently had a thread where the cherry pickers were critisized for not notifying dealer of varieties. Shouldn't this work both ways? After all the dealer said he knows who he bough the dime from at silver.
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
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Comments
<< <i>We recently had a thread where the cherry pickers were critisized for not notifying dealer of varieties. >>
Really? Why would anyone criticize a collector for not telling a dealer about varieties and cherry-picking him? Nailing the dealer is half the fun of the hunt. If the dealer has set himself up in business, than it's tough tootie if he doesn't know his product.
Russ, NCNE
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
<< <i>but why is it okay for the dealer to pocket the undeserved profit? >>
Before that can be answered you'd have to define "undeserved profit".
To me "undeserved" profit would be if the dealer deliberately mislead someone and thereby paid less for a coin or collection of coins than their worth. "Undeserved" profit would involve deceptive trade practices, theft, or manipulation.
He, as the dealer, has assumed the risk and associated expense by going in to business for himself. By doing so, has he sacrificed all opportunity for fortuitous circumstance - the same opportunity that we all have?
There is nothing "undeserved" about the situation you described since the dealer was not aware of the coin when he made the purchase.
That said, my own personal moral code might require me to split the difference with the individual from whom I purchased the collection. That would depend on their level of sophistication.
Russ, NCNE
Ultimately, it comes down to whether you believe we have a responsibility to "be your brother's keeper" and prevent them from making mistakes that come to harm them. I think we do, and if more people did care about the welfare of others at least as much as their own welfare, this world would be a much better place. Unfortunately, we cannot legislate or force such morality. If only people would treat others the way they would want to be treated, which in this case I believe would prompt the dealer to tell the seller and make them whole.
Thanks for your comments. It makes perfect sense in that perspective. I guess if the dealer wasn't going on and on about stuff I don't want to bring up here, I may have looked at it differently. Basically I felt by what he was telling me--he is a hypocrite!
However, he is taking the business risk--a part of the puzzle I forgot.
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
No, there is no obligation to share the knowledge with the dealer. It's best to not let them know or it will be your last opportunity! People make money off of what they know all the time - coins are no different than cars, collectables, jewelry or professional advice.
If you are a consultant however, you have a responsibility to do what is right for your client. That is far different than cherry picking.
Unfortunately, for some reason there seems to be more than one set of ethichal rules for this dealer. If the dealer is a buyer he has one set, and if he is the seller he has another set.
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
I think a more troublesome ethical question for the dealer would have been if he had known about the 42/1 from the original seller, but when he asks the seller what he wants for it, the seller names a price that is clearly too low. Should he speak up then??? What does our dealer community think?
The facts as stated however, I think make for a done deal. Everyone is happy as is with their transaction...the original seller, the dealer and the kid.
Greg Hansen, Melbourne, FL Click here for any current EBAY auctions Multiple "Circle of Trust" transactions over 14 years on forum
That would have solved the problem!
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
This is why? Not knowing of the coin, he wouldn't have made any profit anyway, and he wouldn't have lost anything because, if I understand the story correctly, the dealer didn't actually pay for the coin. It was a coin that he didn't know about.
And since the kid discovered the coin, the dealer had no right to claim something the he hadn't paid for and then charge someone else.
It would be different if the dealer discovered the coin himself. Then he could sell it. But he didn't.
I personally would have given the kid the coin. Regardless of what it was worth. It's the right thing to do.
As far as cherry picking, if a dealer charges less for a coin than it is worth, that is his problem. Just as if I over pay for a coin, that is my problem. I have over paid in the past. But i have also bought some so cheap that it should been illegal to get deals like that. I would never tell a dealer that he isn't charging me enough, except in one situation.
If I saw some mislabeled coins that I wasn't going to buy or that was the difference of hundereds or thousands to the dealer for a coin. Then I would. My conscience would eat me up. I'm mostly talking about minor amounts of money.
Just my opinion.
This is my 2 denarii worth,
Doug
<< <i>I think he should have given the coin to the kid for free >>
Doug,
That's an interesting philosophy. How far does that extend? What other things in life should businesses give away for free?
Russ, NCNE
No, I am not a Dealer but without some of them that have been met over the years the coin knowledge would be very limited. Seeing coins and reading about coins are two different things. Good dealers will show you and help you, bad dealers will sell you a book and thats it.
Guess this hit a little nerve. I sometimes do not understand why dealers are always put on the Hot Seat when obviously the seat is not warranted.
Ken
I guess it depends on the dealer. There is nothing wrong with making a profit, but when a dealer braggs about someone finding a coin and paying good money for that coin, why shouldn't that dealer share back with the original seller? A dealer has the same opportunity to purchase as the next dealer, if they are afraid a coin may be counterfiet, they should pass, on the other hand if someone brings in a Whitman coin album of Mercury Dimes shouldn't the dealer at least open the book to see if the holes are filled? A 1942/1 is not a hard coin to spot! And when it is in it's proper hole in the album--what does he need a house to fall on him?
How would you feel it you took your coins to a dealer and he only wanted to pay MS60 prices for those knock out coins in your Mercury collection? Should they at least look at them before making an offer?
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
The nerve was hit because of what I saw today at a local coin shop. Went in and looked over the dealers wares and bought a Merc Dime and a Franklin. We talked for a little while and then he pulled a nice looking AU55 1921P Merc out and showed the coin to me. He paid a collector some decent money for the coin when it was bought within a collection. Sent the coin to PCGS and it got bagged. Fake as hell. From what I understood the collector he bought the coin from knows its fake and has not attempted to give any money back to the dealer. Examples like this just show a so called collector can be just as under handed as a dealer. Its a two way street if you ask me.
Personally it would be nice if a example you gave and the example I gave were worked out in a just way for both the collector and the dealer. But as we both know I am in Fantasy Land when wishing for this.
BTW. In the last year or so I have offered some coins to National Dealers when trying to upgrade the Mercs and got Low Balled. I have a much bigger problem with large Dealers than will ever have with a small local dealer.
Ken
Too bad about the '21, but a dealer can take a seller to court to try and recoup. After all dealers are professionals, and when someone whom does not know about the coins they are selling, this should not give the dealer a license to (well you know).
Also, I do not feel all dealers are the same. I am sure the majority of dealers are fair and honest. Thake a dealer in the next county from me whom treats everyone the same, makes sure to take the time to go through what ever someone has brought into them, and I think pays a higher price than any other dealer in the area. Good businesses earn the consumers trust!
Thanks for your input! I appreciate your point of veiw.
Tony
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
If the kid doesnt say anything and the story ends up that the kid got the dime for virtually nothing, everyone would be congratulating the kid for "his" find. But the kid was either inexperienced or was just plain honest and the dealer took advantage of him.
The dealer should have compensated the kid by giving him the coin at just over cost, say 10-20%. Otherwise, he didnt treat the kid fairly and ended up ripping him off.
As for the person who sold the coin to the dealer.. too bad. You should know what you have when selling it.
WWQ
So when I die, my wife should get ripped off by a coin dealer because I didn't sell my coins before I die?
Do we really expect heirs who have to sell coins to know everything their family members took a lifetime to learn? I think the dealers owe the sellers at least the right to look at the coins. Not everyone who sells coins has a numismatists' knowlege.
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
<< <i>
<< <i>I think he should have given the coin to the kid for free >>
Doug,
That's an interesting philosophy. How far does that extend? What other things in life should businesses give away for free?
Russ, NCNE >>
It depends. I think most people have a sense of good judgement. Sadly not all.
The kid was honest. The dealer made a profit from something which did not belong to him. It was rightfully the kids coin. It isn't his fault that the original seller wasn't careful to check or that the dealer hadn't noticed. This kid should be commended.
Maybe collecting modern coins is different than ancients. I know I wnat the best bargain I can get. Face it, I'm not rich as alot of people. I won't blatently rip someone off. But I want the best for my dollar. As most people do.
It is no different than the dealer wanting to make as much money off a coin as he can. If he makes a few dollars more than what it is worth. I don't think he will be upset about it.
Although I think ancients are alot different as there are no set prices. Unlike moderns. So it is starting to dawn on me while writing this, I am used to dealing in a different manner.
I don't want to be misunderstood. People who collect ancients would never do anything to devious to another. In the few years I have been collecting. It is a very tight nit and very honest community. As have been all the facets of coin collecting.
But in ancients there is room for bargaining as price is based more on personal view than a set price by some one else.
Some coins I have I would pay $100. Yet 90% of other collectors would probably only pay $20. Neither price is wrong. Luckily I have never had to pay that much.
I think modern coin collectors, correct me if I'm wrong, can go into a shop and know what the price should be of what they are looking for and can make a call on a price. Where as ancients, I can only know what the average price is by the dealers that I buy from regularly. Big difference.
To sum it up.
It can not be considered giving it away free if the dealer did not own it. He charged for something he no right to do so or ownership on. A percentage, on the fact that he charged the kid , should have gone to the original seller.
I feel that the dealer was dishonest in this situation.
Doug
Good point about heirs. But what DOES one do when their heirs sell their collection.. rely on the dealer? NO WAY.
Dont the dealers eyes light up when an unknowledgeable person walks in with a bag of coins to get rid of? Why is that?
Personally, I have instructed a very responsible numismatic knowledgeable person to liquidate my collection upon my demise and he's not a dealer!!
I see no problem with the second dealer keeping the money from the sale. They did nothing wrong. There is nothing morally or ethically wrong with keeping the money or cherrypicking a dealer. The only problem comes when someone lies or intentionally deceives another to get the big deal. Now, from a relationships and goodwill point of view, it would be nice for the second dealer to give some money to the original seller of the coin. It makes for a happier situation and would be generous. But there is nothing unethical or immoral about keeping the money from the sale.
Neil
I will give mine away and make someone or a few people very happy.
Doug
If one of you guys called me and told me you found a rare variety in some coins I sold you and that you wanted to give me some more money I'd just laugh and say well aint you lucky. Keep the change.
When lathmach & lazeroo post their eBay Seated Dimes & Quarters cherry picks here like the $500 coin they get for $50 nobody ever tells them to send the seller more money. Everybody says good find!!
Bulldog
No good deed will go unpunished.
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A little Estate Planning can save the heirs a ton of trouble/risk. If you know you don't want your heirs to have to dispose of your collection in the event of your death before liquidation, plan in advance how your holdings will be liquidated.
Greg Hansen, Melbourne, FL Click here for any current EBAY auctions Multiple "Circle of Trust" transactions over 14 years on forum
In sumation, I believe dealers should at least take the time to go over the coins a person brings into his/her shop and make a reasonable offer. I do understand that a dealer is in business to make a profit. They need to profit or they will go out of business. However, some of the same people who cry foul, when someone cherrypicks obscure varieties, think it is okay to pay $1.90 x silver value for 1953 proof sets (sorry I didn't want to go there).
I would venture to guess most (high 90%) dealers are honest, but like everything in life it only takes a few bad apples to ruin a bushell basket.
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
Selling customer brought product into shop and left with money in his/her pocket. I do not recall anyone stating whether selling customer asked for a set amount or the best that the dealer could do. Ask for a set amount and if the dealer figuires "OK worth that much at least I will pay" or seller asks for the best the dealer can offer and the dealer has to carefully examine every worn dime, the majority of which appear to be worth 35 cents each...retail. Either way the seller left with a payment made in good faith.
Then buyer, who obviously has a relationship with dealer or wants to establish one, comes in and says this coin is worth more than you are asking or are you sure you only want that much I think it is worth more... etc. How much is your fair price? Dealer makes offer to buyer at a good price and remembers that this a good person to deal with and worth showing / offering some of his better stuff that is not readily available or even visible to the general public. Both buyer and dealer feel good about the sale.
Next time the dealer has contact with the seller he/she will remember and probably make compensation in either a greater offer on current items or a gratuity on previous sale.
Dont think that this is how it works? It is in more times than not.
Still there ... still doing that.
Heirs selling their inheritance often receive consideration beyond normal customers. There is a simple fact of life though. I have evaluated several hoards &/or collections and have yet found one worth what the holder/accumulator thought that they were worth. A few were worth more and a sad majority were worth far less.
Also, the kid did not want the coin for free. He wanted it for a fair value and probably will get more in future dealings than if he had simply took the find an ran.
Try this one, a real story. A old man sells his collection for 18K. He's thrilled becauses he has made about 100% on his investment. The dealer flips it quickly for a quick 20% profit - not bad for one phone call. A knowledgable collector selects ONE coin out of the collection and sells it for 50K. It's a rare pop. one variety. Every one seems to be happy.
Does anyone owe anyone else anything at all??
<< <i>Does anyone owe anyone else anything at all?? >>
In a word "no"
The definition of a good deal is: that every one left the deal happy.
Every one earned the knowledge that allowed the to make their deals. It was not given to them. The old man generated an increase that made him happy. Did he think that the dealer would not make a profit? The dealer sells to a collector that has the time to examine each piece who then turns a tidy profit and will likely buy from the dealer in future. Every one left their deal happy with the outcome.
That sounds like a win-win-win situation to me.
The original seller knew what he should get, the dealer made a resonable profit, and someone who took the time to educate themselves made some money, too. My main concern is a dealer so lazy that they don't take the time to look at the coins, pay silver price for an easy to spot key (it was even in the correct hole in the Whitman album), and expect the consumer to point out their error and pay them for the key as if the dealer found the coin and labeled it as such. I don't have problem with the dealer making a profit, I just think some dealers have more than one set of ethics, one for buying and another for selling.
Tony
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
<< <i>It can not be considered giving it away free if the dealer did not own it. He charged for something he no right to do so or ownership on. >>
Doug,
Did you read the original post wrong? The dealer did own the coin and therefore had every right to charge for it. Or, am I missing some part of your point?
Russ, NCNE
obviously,the dealer had not taken the time to educate himself about 42/41 mercury dimes and should look at this deal as a learning experience...
as far as going back to the original owner of the dimes and fessing up to his ignorance,i say no...
it would been good enough and highly ethical of him to say "good for you" to the kid without charging him another dime...and a word to the kid from the dealer about his forthrightness in telling the dealer of his find would have been the icing on the cake for the kid...
i have never felt obliged and don't consider it unethical to tell a dealer "what i know" about a coin either before buying it or after buying it...
Great spirits have always encountered violent opposition from mediocre minds.-Albert Einstein
<< <i>
<< <i>It can not be considered giving it away free if the dealer did not own it. He charged for something he no right to do so or ownership on. >>
Doug,
Did you read the original post wrong? The dealer did own the coin and therefore had every right to charge for it. Or, am I missing some part of your point?
Russ, NCNE >>
Am I correct in the fact that the book was purchased. But the Dealer did not know the dime was in there.
Doug