Dealer Etiquette
ChetLemon
Posts: 12 ✭
I'm not sure how to proceed in this situation.... looking to tap the minds of the coin gods here for any advice.
I recently inherited a coin collection as the result of an estate settlement. I did some basic research to educate myself on the collection, and last Fall I took several of the coins to a local dealer to thin out the collection.
At that time, the dealer purchased several of the coins I brought in, and made me an offer of $2200 for an 1893-S Morgan that I also had brought in that day. Mind you the dealer took his time and looked over all the coins I had, including the Morgan, before making me any offers. I was very honest and up front that this collection was an inheritance, I knew nothing about the coins, and that I trusted the opinion of the dealer to also be fair an honest. He advised me that if I didn't want to sell the Morgan, I should send it in for grading (he had concerns that it might have been cleaned). I sold the dealer several coins that day, but I did not sell the Morgan at that time.
A few months later in mid-December, I had decided that I was ready to part with the Morgan. I never did explore getting it graded. I went back to the same dealer, who remembered me from before. He took his time looking over the Morgan again, doing his due diligence. He said the offer of $2200 still stood, so I parted with the coin.
Fast forward to a week ago, where I receive a letter in the mail from that dealer. He had written to let me know that he sent the Morgan to PCGS for grading, and they had determined it has an altered mint mark and "is therefore nearly worthless." The dealer is "hoping I do the right thing and return the $2200."
I don't think I have any legal obligation to reverse the sale, but I'm looking for opinions.
Comments
Welcome aboard.
I'm not a dealer, but I agree with you. However, though there is no legal obligation and perhaps no moral obligation to do so, I'd start by asking myself how I'd want to be treated if I were in the dealer's shoes. Essentially, he has nothing to lose by asking you to make him whole, but he likely has very little expectation that you'd do so.
I'd expect the board to resoundingly say, that's the risk the dealer takes being the "expert" in the field. I also agree with that. (It'll be an interesting discussion...prepare yourself for extreme opinions from either perspective.)
You owe him NOTHING! He is the coin dealer.
Or...mail him $1100. He can use the money to educate himself.
I owned my own coin business for a number of years and would never ask anyone for a refund because I made a mistake. IMHO any dealer markets themself as a professional and therefore is responsible for their bad buys. It’s part of the business.
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Interesting...for the sake of the argument, lets assume that the dealer is telling the truth and that the 93-S has been sent to PCGS and it has come back as described.
1) I don't think that you have a legal obligation though it is more of a moral question.
2) The dealer is the expert and is the one taking the risk in the transaction. He had a profit potential in mind. It would have to be a pretty low grade coin to be worth $2200, like really low which makes me believe his story of an altered mintmark. At $2200 it would be pretty tough not to make money.
3) If this was a dealer to dealer transaction, I would expect the seller to refund the buyer based on integrity and reputation.
4) If I as a collector sold a coin with a problem like this to a dealer I do business with on occasion I would refund them. As you are a novice, I see you having no implied knowledge nor obligation.
Now, lets be cynical....do you trust that the dealer has not switched the coin?
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The dealer should know his coins. He gave you his informed offer. You accepted it. He took the risk and(accepted the risk) when he bought the coin from you. It is his loss and you should feel ok about the deal as you did nothing wrong.
The "ol' switcheroo" came to mind. I would think that the dealer has enough savvy to know what to look for, especially key dates, to make an offer on a coin.
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As a dealer, I would never attempt to reverse a deal. If there is a question of authenticity, I will usually tell the customer that (for example) I'm offering $2000 because I'm afraid it may not be good but that if he lets me send it in in his name, I'll pay him $5000 if it comes back good. There is always a "risk premium" in offers for coins that could have problems. Most dealers will pay less for S-VDB cents and 16-D dimes raw than slabbed because of that - unless they are supremely confident in their ability to detect any and all counterfeits.
I usually side with the dealer - it's a harder gig than people think - but in this case, I would tell you to never do business with that dealer again and find someone you can trust.
$2200 is about the lowest price you could get for a 93-S that doesn't have major damage. I don't know what grade the coin was, but I would assume that part of the $2200 offer was "risk premium". If the dealer made no contingencies in his original offer, it is his error and he'll need to live with it.
IMHO, of course.
By the way, this is a silly story by comparison, but...
When I first got back into coins about 25 years ago after a hiatus of more than a decade, I started filling holes in albums. I would go to all the local coin shops and, since I didn't have a lot of money, buy inexpensive hole fillers. At the time, there were 3 main coin shops and I frequented them all evenly.
Right before Christmas, I went into one of the shops and bought a little over $40 worth of VG/F Barber dimes. They were individually priced and in the store's "50% off bin". [50% off double Redbook, by the way.] NYState has 8% tax on coins and I didn't deal at the time, so the purchase should have come to closer to $45. The dealer added them up and said $40. I paid him and left, assuming he cut me a deal as I had been frequenting him twice per week for months.
A week later, I went back and as I walked in the dealer said, "You owe me $3.60. I added it up wrong." Now, I don't know how he would even have figured that out later as he hadn't recorded the individual coin prices. But I paid the man, walked out and never went back into the store. I just felt I couldn't trust him anymore because it seemed like transactions were never final.
Just one question. How was the dealer able to contact you? I mean why would he know your mailing address? IDo you exchange Xmas cards?
I sure wish I could see an image. If the coin is XF-AU, he stood to make a killing on it. Would he have sent you a letter saying, coin came back AU53 and I owe you 10 grand?
Assuming you aren't just joking:
In some states, like NY, transactions over a certain amount require paperwork.
Do you think he would have called you if he made a big score on the coin asking where to send you the extra money? I doubt it.
He is the expert, he made the offer and now he has to live with it.
JMHO, Donato
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I am in the camp you owe him nothing.
If it had straight graded was he sending a check when he sells it for 7k? Didn't think so.
He took the risk and could have made it contingent upon grading. he did not do that and plus I would be afraid of a switch. If he was suspect in any way he should have made it been graded as part of the deal. He also looked at it on a couple occasions, remembered the coin, so it seems he really wanted it.
I would assume this situation has happened to most dealers at one point or another. Bad mistake but we all learn and move on.
If any dealer I've bought from knows my last name I'd be surprised. If they wanted my address I'd be out the door without another word.
Obviously buying online or over the phone where the item is being shipped is different
The dealer had my address because he copied it on the receipt at time of sale. He will not be getting an Xmas card from me.
The dealer gave good advice - get the coin graded. This is a key date and the dealer knows it is often faked.
In the absence of getting graded, the dealer took on the risk of whether it was genuine or not. He could also have agreed to get the coin graded and made an offer based on the result. He didn't. Instead, he likely gave a lowball offer commensurate with the risk he was taking.
The dealer then gets the coin graded, which is what he should have done in the first place. Now he wants his money back from the original owner who admitted to knowing nothing about coins.
If it were me (assuming I knew nothing about coins) - I would decline to reimburse the dealer. You have no legal obligation to do so. Morally, that is up to you, but if I knew nothing about coins, I wouldn't lose any sleep over it.
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Appreciate the continued input, and I have issues with simply handing him $2200 to fulfill a moral obligation.
In the first place, the coin was sold to cover some expenses, so the cash is long gone.
Also, how will I even know that the coin he returns to me is the coin I sold him? I have to take him on his word for that I suppose. I just don't want to risk ending up in small-claims court...
However I am able to continue to bring him business, and have other items that I had planned to bring in and sell that I would be willing to give him a better deal on moving forward to help him recoup some of the loss.
This dealer seems like a young, decent business owner but I don't feel that I should be blindly reversing the sale just because it didn't turn out the way he expected.
*An no, I did not alter the coin in any way. Everything I brought to him was still sealed up in individual coin cases - just as they were when we received the collection. I was very up front with him about what I had and what little I knew about it.
Did he offer to return the coin to you? If so would you recognize it as the one you sold?
Just curious , but if you are not knowledgeable about coins you couldn't really be expected to know what was wrong with it or if it was even yours .
I'd toss the letter in the trash and forget all about it.
don't do more business with him ever . He will take the $2200 out of his buy prices and you are going to get hosed
Well then you can't buy anything over $1000 in NY State... We don't make the rules, we just live by them.
@ChetLemon
Based on the details visible on your coin, which image below looks the closest.
sounds like a terrible place to do business . You should move to another state
I suppose next you will say if I want to buy an ounce of gold and hand you cash for it you are going to write out a receipt
That is the law. The transaction is not immediately reported to anyone, but records are required if law enforcement asks for them. [Anti-money laundering laws passed after 9/11.]
And, if you buy 1/2 oz of gold, you're going to pay sales tax.
based on those examples, it was an XF-40 at worst. Clean and crisp with very little wear.
K
Well then I would say the dealer wasn't very generous in their offer and you owe them nothing.
They took a gamble and lost.
They should of sent it in for grading and then made you an offer if they weren't sure it would grade.
You owe the dealer nothing and you should avoid dealing with him again. If your coin was even close to XF it would have been worth at least $5K (and maybe up to $10K) so he was either planning to rip you off and/or he discounted the price to account for the risk.
The only way I can imagine feeling some moral obligation is if you were an expert in the series and he trusted your judgment.
Do not deal with this dealer again. Regardless of if you realize it or not, it will not end on a positive note.
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I will add that contacting you to let you know as a warning (so you can check your other coins) seems reasonable to me. However there is absolutely no way he should have asked for any money back.
I agree with the others. It's his risk. I'm actually surprised he couldn't tell on a 93-S, they have enough diagnostics to make them kinda easy to authenticate.
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This.
bob
I should probably add 2 comments.
1. Welcome
2. Learn by reading and join PCGS as a collector and send a few for grading. But, reading is first and foremost.
bob
The dealer should be sent to Guantanamo Bay.
I appreciate the feedback thus far. I don't think there needs to be any water boarding of anyone in this situation, I just want some piece of mind that there are no legal obligations on my end. I understand the moral quandary.
Or be the next candidate for the upcoming head of the FBI.
It amazes me that a knowledgeable dealer could be fooled by an 1893-S Morgan Dollar with an added mint mark. The real thing has two markers on the obverse, a die scratch through the “T” in “LIBERTY” and the placement of the “1” date relative to the dentils below it, that are diagnostic for the genuine coin.
I don’t think that you owe him any money. The $2,200 price paid was low if the coin was a sharp as you say it is.
Do not refund the money and do not do business with that dealer again. He could have sent it in for grading prior to the deal - he did not. The coin he now claims has an altered MM, may not be the coin you sold. He could have contracted with you on condition it graded - he did not. There is a very wide window for fraud here....do not do business there again. Your coin could well have already sold for multiples of what he paid you .... and now, playing on your lack of knowledge and pity, he is trying to even recoup his lowball investment. Run..... Cheers, RickO
In agreement with all the general thrust of advice you've gotten here, OP.
1) Don't deal with this dealer again, it won't end well for your pocketbook, whether he's lying about the coin and trying to pull a switch, or even if he did honestly miss on correctly evaluating the coin. His mistake and as a pro he needs to deal with it.
2) You owe this dealer nothing, certainly not legally, and not morally, either.
3) The only thing I'd be bothered by is that he has your address. Knowing this is the law for selling most any numismatic material of significant value, but still. I would simply not respond, and ignore 100% any more entreaties from him.
Of course it is easy to pass judgement on one side of the story, as we do so often here. Who is the dealer?
What Bill said. His offer was not low. It was way, way low.
I have bought counterfeit gold coins before. Not often, but that was my bad, part of my numismatic education. No way I would expect people who brought them to me, knowing nothing about coins, to refund that money. The same applies for a dealer who offered you an extremely lowball offer on a coin he should have known how to authenticate.
Kind regards,
George
@david3142 said: "You owe the dealer nothing and you should avoid dealing with him again. If your coin was even close to XF it would have been worth at least $5K (and maybe up to $10K) so he was either planning to rip you off and/or he discounted the price to account for the risk. The only way I can imagine feeling some moral obligation is if you were an expert in the series and he trusted your judgment."
First off, the OP knows nothing about coins and nothing about their grade of value. Secondly, the dealer is a dunce. Fortunately, he did notice the coin was cleaned - not original. UNFORTUNATELY, we can find coins that range from lightly hairlined all over their surface to POLISHED in holders labeled as cleaned SO: Therefore, it's my opinion that there is not enough known about the coin in this thread (before it was declared to be altered) to discuss the validity of the dealer's offer.
@BillJones said: "It amazes me that a knowledgeable dealer could be fooled by an 1893-S Morgan Dollar with an added mint mark. The real thing has two markers on the obverse, a die scratch through the “T” in “LIBERTY” and the placement of the “1” date relative to the dentils below it, that are diagnostic for the genuine coin. I don’t think that you owe him any money. The $2,200 price paid was low if the coin was a sharp as you say it is."
Keyword: " knowledgeable."
I would not be surprised at the number of members who did not know these diagnostics until you posted this.
Some day, the actual story of how the diagnostics used to authenticate these coins came to be will come out. I read all about it decades ago in a defunct publication "Insight on Coinage." BTW, it had NOTHING to do with the date placement because the base of the dates on two of the coins was worn away.
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I agree with TOMB not to deal with him again as the future offers you will get would not be very generous.
Perhaps you should take some pictures and post them in the pcgs forums on the BST (buy sell trade). Ebay might be another good source.
Until the rest of the true* story is heard from both sides, any conclusion made is pure speculation.
*may be an impossibility, so I stand by "speculation." (people do exaggerate, stretch the truth, spin a story, and finally, lie).
The dealer doesn't even need to be knowledgeable about that particular coin itself, just smart enough to google the die markers. Took me 5 seconds to find it:
coinauctionshelp.com/1893-sauthenticateID.html#.WnjGJ1SnHIU
I strongly agree with this. The wild speculation that the dealer was pulling a coin switch is baseless.
Thanks for all the input and spirited opinions.... You have all the facts from my side, but I doubt the dealer will provide me any further details. To clarify, the dealer never said the coin was valued at $2200, merely that's what his offer was. After his first offer a few months prior that I did not accept, I did my own research and knew that the value of the Morgan was potentially well beyond that. I also know that he has to make money on it, was (presumably) more educated on that particular coin than I was, and that he was taking a risk by purchasing an ungraded coin. I made no promises, speculations or claims to the coin I was offering for sale.
You owe the dealer nothing. I would not go back to this dealer because he will definitely make up for the losses on the rest of your collection. I will say you got lucky to (unknowingly) sell an altered coin for a decent amount of money. Count your blessings and move on.
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We dealers have to eat our mistakes. If that's a windfall for the heirs, that's okay. The fact that it is all a windfall for the seller is a bonus. The fact that the dealer is out a couple grand by his own doing is a testament to his frustration, asking you to make him whole. That's not a legal issue. That's a moral one. In essence, you do not "owe" anyone reimbursement. However, it is unlawful to peddle counterfeit items.
Etiquette vs. Ethic
Waterboard him !
There is so much information on the net that one has to be blind and helpless not to be able to determine the authenticity and value of said coin w/in ~90% degree of confidence.
For the other ~10% again search the net and any honest, experienced dealer will be more than happy to provide the information especially on a key date Morgan dollar coin, and you give them first crack at buying it.
Something is amiss here and I just don't get it (isn't the first nor the last time).
edited to add ~ & http://coinauctionshelp.com/1893-sauthenticateID.html#.WnjPT02ouic to cma.