A hidden camera coin sting??????
majorbigtime
Posts: 2,937 ✭
Wouldn't it be interesting if someone conducted a hidden camera sting to test the honesty of coin dealers?
One scenario would be to send an elderly woman into a coin store (could be a neighborhood store front or one of the large national dealers) with her recently deceased husband's full set of Morgan dollars averaging MS63 (with a PF63 1895 of course) and ask what she could sell it for.
How many would try to steal them (hmmmmm, these are worth $8 each)??
How many would low-ball her (offer aboout half of grey sheet bid)??
How many would give her a decent offer (say 10-15% less that grey sheet bid)??
How many would advise her of available options for selling, such as auction, consignment, etc.??
I bet it would be a real eye-opener!!
One scenario would be to send an elderly woman into a coin store (could be a neighborhood store front or one of the large national dealers) with her recently deceased husband's full set of Morgan dollars averaging MS63 (with a PF63 1895 of course) and ask what she could sell it for.
How many would try to steal them (hmmmmm, these are worth $8 each)??
How many would low-ball her (offer aboout half of grey sheet bid)??
How many would give her a decent offer (say 10-15% less that grey sheet bid)??
How many would advise her of available options for selling, such as auction, consignment, etc.??
I bet it would be a real eye-opener!!
0
Comments
True, it would be kinda sleazy for somebody to try to rip off an old lady by offering her eight bucks for a proof 1895 dollar, but that's kind of a grey area, as I see it.
You're right, though. It would be interesting to see.
I believe a dealer offering such a blatent "rip" would be subject to legal liability. In fact, I recall seing something about such a case in Coin World awhile back.
There's no regulation on used car offers that I know of. Dealers offer the lowest possible amount that they think you'll take so they can either maximize their profit or flip the car at a lower price if needed. The same i'm sure holds true for all capitalist markets. When prices of my restaurant goods go down (not too dang often let me tell you) I don't adjust my prices but when they go up and stay up I sure do. No one has threatened me with any sort of "lowball litigation".
My father bought gold coins from a woman 30 years ago for face value. Her idea, her offer, all he said was OK here's the money like any collector would do.
The camera trick would be mildly interesting if you're into all the other "reality T.V." stuff out there but I think you'd just see a bunch of businessmen/women trying to get along like anyone else.
If this did go to trial it'd further my opinion that there's way too many lawyers in this country and they're screwing it up.. but let's save that for the open forum.
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I did my little survey to decide who I would deal with. I won't do business with a dealer who offers to buy coins at bid - 70%.
Did your father sleep well after riping gold coins at face??
Forgetting legality, do you beleive it is fair for a professional coin dealer to offer $8 for a coin worth over $25000??
Louis
I think, in any collectable world, there's no chance of litigation based upon conceived value. We have price guides to direct us and give us "guidelines". I for one, as a collector will purchase most my coins below greysheet if possible. I've purchase thousands of dollars of material below greysheet and sometimes at 50% of going prices, this from dealers, and colletors alike. If you're to scrutinize the world of dealers for their practices you'll scrutinize your own for wanting a better deal. I believe mrdq is valid in making the point he did.
And by the way, those paintings are beautiful, and if I do deside to sell them, I will make a hefty profit.
Why step over the dollar to get to the cent? Because it's a 55DDO.
I remember a while back where a forum member just happend into a local pawn shop ( i think that's what it was?) right as a guy was selling a handfull of Morgans to the shop owner. The forum member offered some rediculously low offer to the shop owner and ended up with the coins. Upon looking thru them on the way home he discovered he had purchased a 1893-S.
Did this person go back to the store and inquire about the original owner so he could give the owner more money ? Did the member go back to the pawn shop and offer the shop owner more money ? no and no.....
I don't remember that being part of the forum discussion. If i recall correctly the member gleefully proclaimed his 'rip' for all of us to oooooo and ahhhhhh about. Was it ethical ? Probably not. Would most of us do the same thing. Probably.
My point is that we all tout our ethical standards, and speak to the masses about 'doing the right thing', but if and when it happens to 'you' - it's a different story. I think a shop owner has every right to offer what ever they feel comfortable with. It's up to the seller to be informed and educated as to what they are selling. Do what Eric did and 'test' the waters to see who is honest and who's not. A shop owner must 'live with their conscience' afterwards.
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Now as a business owner, I recognize that educating prospective clients is part of my job and my advice may result in lost business. But I learned in an old Zig Zigler sales book that lost business is only temporary if you're an honest salesman. When you take time to build trust and are willing to share your experise, people will be back to do business with you and they'll remain loyal. This is why dealers should treat people right and offer fair prices. We shouldn't tolerate immoral business practices like lying, coercion or hard sales tactics. The market will eliminate these business or at least restrict them to doing business with suckers.
K6AZ offered a great way to find trustworthy dealers in your area. Sure, this takes a little extra time and effort, but he showed it can pay off. His story is a good example of how capitalism is empowering for individuals, although sometimes you have to be willing to work a little harder to get the best deal. I'm new to this hobby. I want it to grow and I don't want people to get burned. But I don't have much sympathy for people who are not willing to educate themselves or if they are too impatient to do a little reasearch and get multiple opinions.
I notice these ethical questions always involve a little old lady
I don't see much difference between the gold seller to mrdq's dad and the new buyer who overpays for a common cleaned Morgan on a television marketplace. Sounds like she asked if he'd pay a price and he said he would. People who act on emotion make themselves vulnerable to getting a bad deal.
I then overheard the pawn shop owner snickering how I got taken since he was able to convince me that the eagle I bought ($10 face) was in fact, a double eagle ($20 face). I was able to smile the rest of the day.
I then double-checked with concern right in the store that perhaps I did buy a $10 eagle but indeed it was a $20 double eagle. I resisted the temptation to "stick it in his eye" but decided it would be better to return and rip him off some more!
For you fans of raw coins, it will stay raw!
__________
I beg to differ. I think the issues go beyond morality and ethics and cross over into legalities.
To me, an expert dealer who buys a $25000+ item for $8 is a thief. This tanatmount to stealing, and would be subject to both criminal and civil liability.
This is different from a person who has a sharp eye and buys a valuable item for cents on the dollar at a garage sale. In that case the maxim opposite of caveat emptor (i.e., seller beware) applies.
Does anyone recall the Coin World article on this issue where a dealer was on trial for sharp buying practices??
Forget it. I agree with those that say it's not morally correct, but it's not illegal to offer what ever the person will accpet.
The "little old lady" is free to accept of walk out with her coins. No one is putting a gun to her head to accpet the 8 dollar offer on the PROOF 95 dollar.
Start accepting that we have personal choices to make every day, make the best of those and quit blaming someone else for your bad decisions.
To me, that's "tough love"!!!!
I would prefer to be unloved!
Professional: A professional coin dealer should provide business in a reputable manner suitable for both his customers and the goodwill of his store/business. The term "rip" as to rip someone off, would be quite unethical and if the dealer would "brag" about his so-called "deal" he looses face with potential customers and earns a reputation that will preceed him when dealing with other dealers. Yes, if a dealer bragged about a steal such as the one in this thread to me, I'd ooh and ahh over the sale but I would be less likely to deal with him because he has displayed his true self in his story. I know that I couldn't sleep at night knowing I build my business by screwing old widows and less-than-knowledgable people out of a family fortune. As a dealer, you are trusted by the person selling you the coins to give you a fair amount for them. When this burden of trust is placed upon a person, it is their moral obligation to provide accurate information to the person selling the coins. That is what makes it wrong.
Leisure: Leisure is different. If you find a deal at a garage sale, antique shop, ect. The values of these items were not put in your hands to decide. If someone wants to get rid of a $1000 painting for $1, they have set their own price. It is not your moral obligation to volunteer information about the item. Since the burden of trust is not on your shoulders, you are free to buy at whatever price they have set. Now, If I found an 1893-S in a high-circulated, uncirculated grade and bought it for 8 bucks, as a good gesture I would gladly and anonymously send several hundred dollars to the person who sold it to the shop. Anonymously, because if they found out what they sold, it might make them upset and who doesn't like recieving an anonymous envelope with several hundred dollars in it. Everybody wins. Nobody is "taken".
-Brandon K.
Leisure: Leisure is different. If you find a deal at a garage sale, antique shop, ect. The values of these items were not put in your hands to decide. If someone wants to get rid of a $1000 painting for $1, they have set their own price. It is not your moral obligation to volunteer information about the item.
I have also believed this myself... and still do. However, there is a current case taking place right now concerning this very thing about yard sales. I do not have the info right in front of myself right now, but was in the newspaper around a month ago. Basically, a church was having a yard sale; people could donate their items, the church would sell them in a yard sale, and keep the proceeds.
There happened to be a donated painting that caught one person's eye. First, he just liked the painting, and wanted it for his home. Secondly, his gut feeling was that there may be a chance that it may have some additional value... but he did not know for sure. The painting was priced at $100? or so at the yard sale. He talked to 2 of his friends to go in with him to purchase the painting.
Sure enough, based on his gut feeling, when he had it checked out, it was by a desirable artist and expected to bring perhaps 50,000 or so in auction.
Meanwhile, the church found out the paintings true potential worth. They are now bringing a lawsuit against the purchaser for 'their share' of the money. AND, since the purchaser is a member of the church, say they will expel him from the church if he does not turn over some of the money. They claim the money is rightfully and morally theirs.
It will be interesting to see how this turns out. If the church wins... this would not bode very well for bargain hunters and cherrypickers. I guess our years of research, expertise, etc. would be for naught if we could not use our knowledge and gut feelings to find those bargains.
I don't see how the church can win this case. It would be a nice guesture to donate some of the money from the selling of the painting but after they sued me I would go tell them to boink themselves. Caveat Emptor. Free Market society. You sell, you buy, you live, and you die.
If I recall correctly, the purchaser may have even made a statement that he was thinking of donating some of the proceeds back to the church... until they raised their fuss about it.
And in my opinion is the church should have no legal claim on the auction proceeds of the painting. They priced the painting in the yard sale, the purchaser scraped up the money, took a chance based on his gut feeling, and purchased the painting at the marked price.
But in our society today, the courts are filled with liberal judges that like to 'write' law as they see fit. So while all common sense would say that the painting is fully the purchasers, don't mortgage the house placing a bet on the outcome.
This whole concept is how pawn shops stay in business. They offer less than what the value of an item and sell it for more than it's worth. If this was illegal, then there wouldn't be a pawn shop in America.
The little old lady can go to 10 different dealers if she wants and see who offers the best deal. If she takes the first/only offer, that is not the dealer's fault.
An $8 offer might certainly be unethical, but there is not anything illegal about it. Unprofessional, yes.
Let's ask this similar question... How many dealers here might have someone come into their shop with a mini hoard of mercury dimes or wheat pennies and offer a flat value for the entire lot then go through looking for key dates? Is this illegal? Also, the answer is no.
Why step over the dollar to get to the cent? Because it's a 55DDO.
Imagine all the services you use in your life. Plumbers, auto repairmen, doctors, and lawyers to name a few. Do you really want your car repairs to cost double what they could have, because you did "not take the time to understand your car and it's needs?". Do you want the plumber to fix things with cheap materials and then charge you as if he was using copper, because you "did not bother" to shop around? Or know your wholesale prices? Or do you expect honesty in these dealings?
How many of you have not been angry at either a personal experience, or reading about a lawyer twisting the law beyond recognition. What he did was perfectly legal in a court of law, but you knew he was being a greasy son-of-a-gun and you wished all shyster lawyers would fall off the face of the earth.
When you sell your house, you are often completely dependent on the ethics of your listing agent. A friend of mine lost $12,000.00 when he asked his agent if the home he was interested in had a certain type of siding. The agent let him know the siding was not the faulty kind and he had nothing to worry about. Turns out the guy was lying (but he got nothing in writing) and my buddy is out a wad of cash to replace the now rotten siding 3 years after he bought the house. He depended on the expert. He was screwed. Do we really want that type of behavior to be the norm?
Is a "rip" only good when it works in your favor?
Now, I have these strong opinions about PROFESSIONAL services. If I go into a coin shop I expect an ethical expert who will help me honestly judge my coins. Dumpster diving and garage sale crawling should be fair game. That whole church thing is silly. You would think the church would have been happy for the guy.
I am spending money (and time) buying supplies and books to evaluate a bunch of coins I recently inherited. Several of these coins may be worth a bit of money (to me anyway). I don't know yet. I will not even approach a shop with these until I have evaluated each and every coin. Because I am afraid of being taken. Of being "ripped". The fact that I have to do this makes me sad. I want to trust people more than that.
Zulan
<< <i>I think, in any collectable world, there's no chance of litigation based upon conceived value. >>
As in everything, there is a chance of litigation. Anybody can sue. I think the outcome of that suit would likely depend on the individual circumstances, and weigh heavily on the representations made by the buyer.
For example, if the proverbial little old lady brings her dead husband's coins to a professional coin dealer and said dealer rips her off while at the same time specifically telling her that the price offered is fair relative to market, I find it likely that a strong legal case could be made against him.
If, on the other hand, he simply asks how much she wants and pays her asking price without comment, he'd probably be in the clear from a legal standpoint.
Russ, NCNE
<< <i>I think he was a little upset when I stated it depended on the year and condition and started naming years and mint marks to be especially watchful for. When I went back Friday he told me the set was sold - Sorry.
Ooh, yeah. He's not going to like that.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
K S
David
I dont even have a shop and my overhead runs about 10% on everything I sell. If it's a coin I buy to "flip," I wont even buy it unless I THINK I can sell it for 20% more than what I paid. That means that I'm really think I'll profit about 10%.... and I RISK not making that much... or losing money. I will say that I mainly deal in coins in the $50-$500 range. In the $1000+ range, the % could be cut thinner.
As far as greysheet goes... unless it's a raw coin, I dont even look at it. I watch prices realized in auctions, dealer stock, and prices asked at shows to figure out what the going rate for particular coins are.
If I'm buying a coin for myself, I'll often pay 120-150% what the going rate is.
David
I gave my girlfriend several of my absolute best toned PCGS dollars........ textiles, incredible vibrant rainbows, wild end rollers, and so forth. I told her to walk in, act like you don't know what you have, and ask how much they would pay for them but of course NOT to sell them under ANY circumstances, LOLOL.
These were the coins I gave her:
1882-S PCGS MS64, incredible textile obverse toning.
1881-S PCGS MS66, superb vibrant obverse bag toning
1885-O PCGS MS66, same as above.
1886-P PCGS MS65, wild vibrant end roll color on obverse.
1880-S PCGS MS66, incredibly nice vivid obverse bag toning w/textile.
So she takes the coins and walks in.......she comes out about ten minutes later and tells me she got to talk to the owner! She says the owner told her they were all very common date coins and that he would do her a favor and buy them even though he would have a very hard time reselling them for a profit. She said he then took out a current Bluesheet, yes Bluesheet, and offered her about 60-65% of current Bluesheet prices for all of them.
I later sold those coins to private parties and dealers, and one went to auction. They mostly all went for between 8X - 25X Greysheet bid.
dragon
I dont even have a shop and my overhead runs about 10% on everything I sell. If it's a coin I buy to "flip," I wont even buy it unless I THINK I can sell it for 20% more than what I paid. That means that I'm really think I'll profit about 10%.... and I RISK not making that much... or losing money. I will say that I mainly deal in coins in the $50-$500 range. In the $1000+ range, the % could be cut thinner.
No law says you can't mark em up way over ask like lots of dealers do!!
'Antiques Roadshow' dealer told to repay $830,000
Friday, July 12, 2002
By Joann Loviglio, The Associated Press
PHILADELPHIA -- An antiques dealer was sentenced to one year in federal prison and ordered to pay $830,000 in restitution for staging phony appraisals on the PBS series "Antiques Roadshow" and defrauding Civil War collectors.
Russell Pritchard III, 39, of Bryn Mawr, pleaded guilty to making the bogus TV appraisals as well as to charges he defrauded artifact owners, getting items for far below their value and then selling them privately and pocketing the profit.
According to prosecutors, Pritchard made between $800,000 and $1.5 million on the fraudulent transactions. He had faced a maximum sentence of 135 years in prison and more than $5.2 million in fines, prosecutors said.
U.S. District Judge Petrese B. Tucker sentenced Pritchard to one year and one day because of his cooperation in a related case against his father and his work with civic and community groups, his lawyer Eric W. Sitarchuk said.
Further...
In the early '90s, the city of Harrisburg, Pa. began building a Civil War museum. Harrisburg's mayor was spending millions for swords, uniforms and other artifacts, buying much of it from American Ordnance Preservation Association (AOPA), Juno and Pritchard's company.
Enter George E. Pickett V, a descendant of the man who led the ill-fated charge at Gettysburg. Young Pickett owned a trunkful of his famous ancestor's mementos, but told ABCNEWS he had little interest in them until Pritchard contacted him in late 1995.
Pritchard, armed with a letter saying he represented Harrisburg, convinced Pickett to sell the collection for $88,000. "He said the museum was paying top dollar," says Pickett, "and that he was under an obligation to the museum to appraise these items for fair market value."
Almost three years later and entirely by accident, Pickett learned the real value of the trunk's contents. Pickett found himself seated next to Jerry Coates, an expert in military uniforms, at a Gettysburg seminar. Coates estimated that the general's cap alone was worth $50,000 to $100,000.
Within days, Coates and Pickett learned that Harrisburg had actually paid AOPA $880,000 for the memorabilia — 10 times what Pickett had been paid for the mementos.
ABC News coverage of the "fraud"
--Severian the Lame
I probably have a price for my conscience, but i've never seen numbers that give me pause.
When we are planning for posterity, we ought to remember that virtue is not hereditary.
Thomas Paine
<< <i> I did this at five shops. Four offered fair money on the coins. The fifth shop offered about 30% of greysheet bid. I've done business with the four shops that offered a fair price. The other shop I have never been back to. >>
Although rather perverse, did it occur to you that the lo-ball buyer might sell for less??
<< <i>There is no legal requirement for the coin dealer to offer a fair price. I'll give you $5 for anybody's car, especially if it's a Lexus or BWM. Any takers? If someone takes me up on my offer, did I do anything illegal? Nope.
An $8 offer might certainly be unethical, but there is not anything illegal about it. Unprofessional, yes.
>>
Don't be so sure about the legality.....
The approximate value of a nice car is "common knowkedge", not so with a rare coin. I beleive a professional dealer will be held to a higher standard that a lay person, and has an obligation to offer a reasonable fair value (yes, a wide berth). The seller is relying on the dealer's expertise, not so with the auto. Only a deranaged person would sell a hi-value car for $5.
In the case of either sale, I beleive there would be legal recourse against the buyer.
<< <i>Only a deranaged person would sell a hi-value car for $5. >>
Unless he was trying to avoid a large sales tax liability
Not quite true. If you go to a dealer and ask him for a appraisal or advice as to what the coins are worth, then you are engaging him in a professional capacity as an "expert" and I believe he DOES have a legal obligation to provide answers to the best of his ability. To do otherwise could be construed as a fraudulent betrayal of a confidence. On the other hand if you ask him "How much will you pay me for this?" then he is under no such obligation and can offer whatever he wants. or thinks you will take. How you ask your questions can be of supreme importance.
These people who are unaware of the value of these sets that have been put together by a lost one's labor of love over the years are going to the people who are professionals and believe will give them correct information. Just look around and see all of the hobby membership symbols displayed on the door and the walls and at the cash register. "Lifetime Member ANA, Member PNG, Member of State Club, Member of City Club, etc, etc." All these clubs have ethics codes that are guarantees to the public of fairness in all dealings. ANA Line 2.
It is so sad that so many members of our hobby accept this unscrupulous behavior as "OK" because the seller should simply know better. Remember, this person took their collection to a "Professional", and did not offer it for sale to some guy on the street or put it in a garage sale. They knew better and took it to the right place.
Just like you would look for a CPA for a financial issue or a Lawyer to handle your legal problems. So, based upon what so many have said here, I should now expect the CPA I have chosen to rip me because I don't know squat about accounting.
i say great "paint my house"
<< <i>Hooker walks up to me and says " ill do anything for 200 bucks" !
i say great "paint my house" >>
Q: Do you know how to make a hormone?
A. Don't pay her!
LM, It's not grey to me. I say it's wrong.
-KHayse
<< <i>If the proverbial old lady sells material to the local coin guy and gets ripped, quite honestly both parties are at fault. It's just that one happens to be more at fault than the other. >>
Why is the 'ol lady at fault, other than sutpidity or misplaced trust??