How do I respond to "It's illegal to melt (US) Coins"?

talkingwalnut2

A friend consigned some coins to me and I casually said "and take this pile to the pawn shop and sell them for as close to melt as you can". He said "I can't do that; destroying US coins is illegal and I don't want to get involved"

So that got me thinking - I honestly believe that it's illegal to melt old pennies and double my money by bringing them to the scrapper because I've heard it here a million times. But we all (you guys and myself) talk about "melting" 90% all the time. So which is it? When we say melt do we mean we're just selling coins to the pawn guys and we don't know (wink wink) what they do with them? Or do they send them out of the country? Or is it totally legal for one denomination but not another? Suddenly I'm confused

MsMorrisine

Cents and nickels, except war nickels, can't be melted or destroyed. Although some allowance is made for an inconsequential amount for things like elongated cents machines.

Similarly, restrictions are placed on export of the two. It's a free for all on the other denominations. Reason: cents and nickels can, at times, have more metal value than face value. The gub'mint doesn't want to coin a bunch of money losing replacements because the populace is melting for their profit.

Selling 90% silver for melt is slang for selling for the metal value. Someone may melt them, but i suspect these days they wind up in $100 face or $1000 face bags.

derryb

selling for melt means placing no numismatic value on the coin and selling it strictly at the current spot price of the coin's base metal. It does not mean that the buyer will be melting the coins. Melt price is calculated using the total weight (content) of the base metal in the coin. Note that this melt price normally includes only the primary metal of the coin and not the sum of all the metals in the coin.

Here's the current melt value for silver US coins

While it is illegal to deface US coins with the intention of committing fraud, melting coins is permissible with the exception of pennies or nickles (the Mint realizes a shortage would occur because the base metal of these coins is worth more than the face value). Also, to prevent you from doing your melting outside of the U.S., you can only carry $5 in nickels and cents out of the country.

thebeav

@MsMorrisine said:
Cents and nickels, except war nickels, can't be melted or destroyed. Although some allowance is made for an inconsequential amount for things like elongated cents machines.

This is true at this time, and has been for about 10 or 12 years.

Selling 90% silver for melt is slang for selling for the metal value. Someone may melt them, but i suspect these days they wind up in $100 face or $1000 face bags.

With 90% at a premium at this time, you are a net loser if you melt it. It isn't always that way however,and is, of course, legal to melt.
There are many misconceptions about your personal use of money. With the exception of cent and nickel refining, you can do whatever you want with your money. Draw a cigar on Lincolns mouth on a five dollar bill, stamp a cigar on a Lincoln cent, etc.....The only time you run into trouble is when you do something with the intent to deceive. Turning a one dollar bill into a ten.....Stuff like that. That would be a no-no.....

TopographicOceans

It is legal to melt silver coins, but it was illegal between 1967 and 1969.
It is illegal to melt cents and nickels (except silver war nickels).

The reason behind this is the effect on the circulating money supply.
There are very few silver coins circulating today so melting them has no effect on day-to-day transactions.

However, melting pennies and nickels removes them from circulation, so it would harm the U.S. economy for people to melt them.

topstuf

Pennies stacked on nickels and put on a railroad track are interesting.

TwoSides2aCoin

The treasury says its illegal to melt cents and nickels...but a bill was not introduced to Congress , to make it law. To my knowledge, it's not illegal from that standpoint.
On that note, is there a scrapper who pays full price for junk (even if it's cold hard cash) ?

PerryHall

Before 1975 when the government legalized the ownership of gold bullion, I used to hear that it was illegal to own gold coins and that they had to be turned in to the government. I would always explain to those that had this mistaken belief that the law exempted collector gold coins.

MsMorrisine

@TwoSides2aCoin said:
The treasury says its illegal to melt cents and nickels...but a bill was not introduced to Congress , to make it law. To my knowledge, it's not illegal from that standpoint.
On that note, is there a scrapper who pays full price for junk (even if it's cold hard cash) ?

under authority granted in existing US Code, there was a regulation created in the Code of Federal Regulations regarding the above mentioned melting.

TwoSides2aCoin

Regulation ? Code ?
Recycler ? Got change ? The discussion never stopped an industrialist before. A hungry man will beg, with a cardboard sign.

MsMorrisine

31 CFR Part 82 - 5-CENT AND ONE-CENT COIN REGULATIONS

§ 82.1 Prohibitions.
https://www.law.cornell.edu/cfr/text/31/82.1

§ 82.2 Exceptions.
https://www.law.cornell.edu/cfr/text/31/82.2

§ 82.3 Definitions.
https://www.law.cornell.edu/cfr/text/31/82.3

§ 82.4 Penalties.
https://www.law.cornell.edu/cfr/text/31/82.4

there is a tab near the top : "Authorities (US Code)" and those are the laws Congress makes. In this case, look under paragraph (d) under the US Code listed.

talkingwalnut2

Thanks, I had no idea but it makes sense to me. And I never really thought to wonder where scrap silver actually goes, but 90% into 100 face bags makes sense. The scrapper in my town drives to NYC and sells it through a hole in the wall in the Diamond District where I assume it actually is melted.

thebeav

@talkingwalnut2 said:
Thanks, I had no idea but it makes sense to me. And I never really thought to wonder where scrap silver actually goes, but 90% into 100 face bags makes sense. The scrapper in my town drives to NYC and sells it through a hole in the wall in the Diamond District where I assume it actually is melted.

No, it isn't melted. At this time, 90 trades at a significant premium. Why would you melt it if it meant you were going to lose 10 percent of your money ? There have been many times when it traded at a significant discount. 1980, for example. At that time, yes, it was melted.

1630Boston

I've wondered these questions in the past, thanks everyone for sharing your info

Icollecteverything

According to their logic it should be ok to melt wheats and buffalos or anything older since it wouldn't effect the small change supply.

MsMorrisine

There are a whole lot more wheats in circulation than war nickels.
plus buffs and wheats are the same or similar composition to jeffs and memorials. how does one say the pour is from cull wheats or cull buffs?

ricko

@MsMorrisine.... Thanks for the post... always better to have the facts. Cheers, RickO