Dealer ethics
AMRC
Posts: 4,280 ✭✭✭✭✭
The recent Long Beach worked out well for us. Despite the leaking roof which forced us to move our table towards the back of the bourse, we overall had plenty of traffic and decent retail sales. As usual, we had many dealers looking at our cases as well. On Wednesday (before the public was there), a dealer I have had many transactions with in the past, went through my cases with a fine tooth comb and picked out about 6 coins worth around $14,000. I put the coins aside and invoiced him accordingly. When the show was nearly over I noticed his table was packed up and he was gone. When I called him and asked about my payment, he said "I am going to have to work out my money issues and get back to you later in the week."
This guy is no fool. He picked out some of the most exceptional coins in my case, and those that had the highest chance of upgrade. I am sure, had they stayed in the case, one or more of them would have sold.
While none of this is really that big of a deal, I was left with some very nice coins that were taken "off the market" during prime time. It is also dubious that the transaction will ever complete.
The point here is that anyone can experience cash flow issues in this business. It happens, and everyone else gets it. What makes this one troubling is that all he had to do was walk over and tell us before he left, and we would have understood.
What is not acceptable is that I had to call him to find out the deal was "delayed."
Comments
I agree, that was very unprofessional in my opinion.
I used to have a dealer come and pick a bunch of coins out of my case during setup,not come around until a day or 2 later only to buy maybe 10%. 2nd time that happened it was pass or play immediately with coins paid for on the spot!
Things like this were a key reason for founding the PNG (it certainly wasn't consumer protection). Dealers don't like getting played, much less stiffed, especially by other dealers.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
Agree with above.....immediate payment going forward.
What that dealer did is BS!
Cash is KING, especially at a show.
He has no right to tie up your inventory, like that, with doubts as to whether he will ever pay.
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Unprofessional, in my opinion.
8 Reales Madness Collection
Send them in yourself and if they upgrade, send him a Christmas Card.
Well, you had "many transactions with him in the past", so you trusted him and didn't, for example ask for a 10% deposit to hold the coins. Now that this unsatisfactory episode happened, you will have to decide if you'd consider future business with him and on what terms. Certainly, your level of trust in him has changed, the question is, how much, and are there pragmatic considerations for doing this and/or future business, or is he now "dead to you" on principle? What about if he works out his money issues, and completes the transaction as agreed, with sincere apologies for the delay, which could still very well happen? I'd think, based on what you said, that he will complete it later in the week. If so, are you "cool" again?
Liberty: Parent of Science & Industry
Either they made a firm commitment to buy them or not. If they didn't, the transaction ended when they left the show. It's not like you HAVE to have that particular cherry picker to go through your inventory....there are plenty of other worthy people who would probably love the chance. Next time around, I'd give them last "shots" on any new stuff until every other dealer in the place has checked them out....or add 20% to whatever price your originally intended. They'll get the message. I think they "found" a way to increase the size of their inventory w/o buying anything. Meanwhile, they make calls over the weekend and on Monday to Tuesday to see if they can find buyers for those coins.
I agree with RR here. They left the show early, that voided the transaction as far as I am concerned. This scenario is also why I will not hold extremely valuable coins without a non-refundable deposit.
What an awesome business! A dealer can cherry pick another dealer for $14,000 in coins, get a couple of upgrades, sell those coins, pay off the $14,000 to dealer one, pocket the coins and sell the ones that didnt upgrade later -- without laying out any money other than the grading fees on 6 coins!
Geez... I gotta become a dealer! Easy money!
Seriously, why do dealers do this ? Are coins really a Net 30 or even a Net 60 business ?
Sorry that happened to you though.
Has the upgrade game become a sort of dealer disease that is infecting the ethics of the business?
Very uncool in my opinion. Especially that kind of inventory being tied up!
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I understand it as AMRC still had the coins, he just set them aside, as he said!
The price just went up!
Lesson learned. You win in the long run
I have had similar type transactions (not that big though) where someone wanted to buy a coin of mine while the funds are gathered. Up until that time the money is deposited into my account, that coin is STILL available for whoever settles up first. That "dealer" did you wrong in a big way.
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I had this happen to me a couple of times when I was a dealer, and it's very aggravating when it involves prime coins that could easily sell at a major show. What you really have to determine is, has this customer done enough business with you, with high dollar volume, to make it worth the aggravation to let him reserve coins like this again?
With a prime customer with whom I had done lot of business for major amounts, I'd put up with some stuff. For a marginal guy it becomes "cash on the nail" if you want these coins.
At one time I knew a guy, who didn't have much money, who came to many national shows. He would take my coins and run all over the bourse floor trying to sell them. At the end of the show he'd bring them back, but in the mean time I didn't have them to sell, perhaps at a retail level. This really got on my nerves. For that reason he and I parted company.
"picked out about 6 coins worth around $14,000. I put the coins aside and invoiced him accordingly. When the show was nearly over I noticed his table was packed up and he was gone. When I called him and asked about my payment, he said "I am going to have to work out my money issues and get back to you later in the week." "
This is a bit confusing to me. Did the dealer walk away with a signed invoice in hand stating the payment terms, etc. at the time he left the table? If so, there is nothing to talk about. He owes the money as agreed. But, on the other hand, if the dealer left the table with no Invoice and no clear agreement on exact payment terms, then what he said about working out the money issues and getting back later in the week may be perfectly fine.
Just my two cents.
Wondercoin
I hope that you get paid. I would never do any business with this person again.
Not right! if he told you to hold them he should of bought them if not let you know he change his mind. That is why I never hold anything only if I know they will stick to there word. Other then that I tell them if some one else come with cash in hand I need to sell them. It happens and most of the time they do come back I bet if you sold them and he did came back he would of been PO at you. What are they? post some pic.....
Hoard the keys.
Seems to be the way several dealers operate... walk around during set up time and have other dealers put a few coins aside for them with the promise of coming back and paying for them by the end of the show.
Happens to me at every Long Beach show and so far I've been paid every time. But there have been a few times where I've had to chase dealers down on Friday afternoon to make sure I get my check... I know better than to wait until Saturday as there would be a good shot they wouldn't be at the show. Can be a bit stressful having some of your best stuff sitting in the back case and wondering when (and if) that payment is going to come.
When I see coins I want to buy, I just pay for them right then and there... but I'm still fairly new... so maybe I'm doing it wrong
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I can see why this is confusing. We do a lot on handshakes in this business. If I ask you to hold a coin for me, I owe you the money for it and it is assumed it will be paid for it before the end of the show. But that is why I am with illini420. The longest I ask anyone to hold a coin is for me to go get the checkbook.
At first, when I read this I thought the dealer had the coins "on memo" and hadn't paid. However, I now see you held the coins and good thing you did!
For you dealers, how standard is it that someone will take coins from you "on memo" and pay later? Any issues with this?
"Got a flaming heart, can't get my fill"
As a collector way back, Once in a great while I would ask a dealer to hold a coin for 1 hour. Some cringed and did it. Some were happy to do this. Almost always I came back in that hour window and bought the coin. If the small chance I didn't buy it I came back again in that hour window and told them thanks for holding but I'll need to let this one get away.
this is really not dealer ethics but poor business. If you want to play dealer, know who you are dealing with or shame on you. In a full bourse floor ask around! You would be amazed at what "name" dealers are horrible to get checks from.
That is kind of low.
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One of the first big shows I ever did, I had a nice 1909-S VDB, 65RD PCGS if I recall correctly. Guy a couple of booths over wants to take it to his table and "take a better look at it." OK, fine, I know where you are. I am walking the show later and he has it on display in his case. Marked up with a higher price than mine.
Not only did he ensure that I wouldn't sell it, he ensured that he wouldn't sell it either by marking it up too high. Total lowlife. And I told him so.
Kind regards,
George
Same thing happens to me on the BST boards... someone emails ill take it send me a paypal invoice. Invoice sent never hear back.. not mom and pop places either .. usually the big dogs.
Amrc... I certainly understand handshake deals, but my point here is I am not sure the dealer did anything wrong Yet. He never said he was not taking the coins. He even didn't write a bad check like some of dealers do from time to time. The post might have been premature if the dealer works out the payment issue this week. Do you see my point? Or, perhaps the cash flow of modern coin dealers is always horrible and I now expect as a matter of course many modern dealers to need a week to figure out their cash flow. Lol. Wondercoin.
I would be done with that guy for good, cash flow issues or not.
Supposing you bought some stuff on anticipation of a check from him?
Now you're the one with cash flow issues.
Wondercoin... The dealer left without settling up and paying for coins that he had selected while enjoying what amounts to having first crack at them. And you don't see a problem with this??
Really??
Experience the World through Numismatics...it's more than you can imagine.
Many years ago when I was just a "pup" in the business I setup with a friend at a show in Gatlinberg TN. On setup night the promoter came to the table and set aside some coins he "wanted". As the show was closing I sought him out to settle his account. He told me he put some coins aside at new dealer cases to assure they stayed to the end of the show. Then he wanted an additional discount! Guess where I never went to again......
A: The year they spend more on their library than their coin collection.
A numismatist is judged more on the content of their library than the content of their cabinet.
I find this behavior totally unethical. Not only did he not buy the coins, he prevented anyone else at the show from buying them, too. So much for professional courtesy.
I understand "handshake" deals.....what I don't understand is making assumptions on when they will be paid for......
If I were a dealer, I would be asking "when do you plan to pay and pick them up?" each time. I wouldn't do it rudely, but I think setting expectations on both sides is a good thing.
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Coinkat... you don't see a "problem" with not giving a regular good customer a few days to figure out how he is paying for $14k in coins? Did I miss the part that the dealer backed out of a deal? Wondercoin.
I've never understood unwillingness to communicate, to avoid misunderstandings. Deposits should be forfeited if you have deals where one side backs out unless they reach an understanding.
once heritage-yes the big heritage left a show early and did not drop checks off. it may have hurt a few smaller people. however everyone knew they would be paid immediately and were.
again, its bad business not to know who you are dealing with. shame on you for not asking others. sorry, I still say poor business judgement. Does not matter if the guy is a bozo, this is business.
Depend on relationship.. here is the dealer holding up salable coins from someone else's inventory.... for his own benefit.. the offending dealer has no decency not even to tell dealer, he doesn't have the money, before he packs up and goes
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When I used to set up at shows I have always wrote a check for my purchases before I leave the dealer's table. This is common courtesy.
Wondercoin... Sorry but a dealer needs to have the cash flow to pay for what he selects under the circumstances AMRC described. If a dealer is unable to commit to pay and pay before leaving a show, then he really should not be extending himself further to commitments he is unable to meet.
Experience the World through Numismatics...it's more than you can imagine.
Maybe it's my OCD.....but I don't like loose ends, neither as a buyer nor as a seller. I try to settle things, as quickly as possible, and if I'm going to be late or run into issues, then communication is essential. I can't believe how cavalier, irresponsible and assuming some people are. But that's just me........
Sometimes, it’s better to be LUCKY than good. 🍀 🍺👍
My Full Walker Registry Set (1916-1947):
https://www.ngccoin.com/registry/competitive-sets/16292/
I suppose you could make the argument that it was unethical if he did it intentionally to stop you from selling the coins. Otherwise it seems that to me it is a bad business practice that many dealers follow. Yes, everyone has cash flow issues in this business, but when I have cash flow issues I stop buying coins until resolved. I don't think Heritage would be ok with you just bidding in their auctions and calling a few days later and saying oops sorry. Why should it be any different in a dealer to dealer transaction.
Maybe next show you should print out a terms of sale contract for every dealer that asks you to hold a coin to sign so there won't be any misunderstandings on what should have been an obvious transaction.
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Often, the set up period of a show is fast and furious. We make a habit at the major shows of taking all open invoices and the checkbook back to the hotel room each night, writing all checks and dropping them off the next morning of the show. This allows us to be efficient during the day, make sure everyone has received checks, and stay on top of the checkbook and cash flow on a daily basis.
We have had dealers (from small guys to the biggest of the big, it happens) forget to drop a check off at a show, and its normally not a big deal. They just put a check in the following Monday's mail.
The most important thing is just good communication. The buyer and seller need to both know when a coin is considered "sold", when a coin is "on hold," when a coin is "on memo," when a coin can be shown around and when it can't. And if someone needs a little "time" to pay for a purchase, they should ask that on the front end.
If I am at a table and said "I'll buy that" or "invoice that," it's a done deal, cut and dry.
If for some reason, I would like someone at a show to "hold" a coin, I make a point to ask nicely, be specific on the time of the hold (i.e. "Can you hold this for an hour"), and specify the reason I'm asking for a hold (i.e. "I need to call a retail customer, check to see if I still need this date, etc).
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As Bestday states - it depends on the relationship. I'll give you an example... a dealer who sets up at Long Beach all the time met me in the dealer lobby at PCGS a few weeks ago and handed me a $12,500 coin to consider buying. He told me to give it back to him "whenever". He handed it to me with no Invoice. The coin did not work for me and I made it a point to get the coin back to the dealer as the show opened up on Wednesday afternoon, even though the dealer was not necessarily expecting to see the coin then or possibly during the show at any time. The flip side is HIS cash flow was such that the $12,500 coin was no big deal, one way or the other, for the show. But, I still wanted it back in the dealer's hands as quickly as possible. So ...
I have though about this a little longer and it is clear that the OP (AMRC) is very disappointed with the dealer's conduct in this case. That dealer did tie up the $14,000 in inventory for the entire show and has yet to pay for it. It appears he has not treated AMRC as AMRC expected to be treated and that is bad in itself. I hope the dealer is reading this AMRC and decides to pay you as quickly as possible at this point.
Wondercoin
AMRC---How many PM's have you gotten asking for the name of this dealer?
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
He may have done this with a few other dealers on the floor that weekend. Maybe he doesn't have enough cash to cover all the invoices.
As a dealer, I never broke a confirmation. Even if it was a mistake, I took my lumps. If you broke a confirmation with me, we didn't deal anymore. Did it cost me money ? Probably a small fortune over a career.......but, then again......I'm not eating pork and beans tomorrow for dinner.....unless I want to.
Letting a dealer cherry pick your inventory is pretty generous, but once the coins have been put aside and the price determined you needed to get the payment terms defined.
His behavior was tacky. If you can't meet your obligation at least inform the seller within a day or two whether you are going to pass or play so the dealer can put them out for sale. To leave the show without getting back in touch is just tacky and RUDE to boot.