The Numismatist's "Ethics" Column...
MrEureka
Posts: 24,419 ✭✭✭✭✭
As some of you may know, I contribute to a column on numismatic ethics every month in The Numismatist. In each column, a hypothetical scenario is presented and each contributor to the column is asked to respond with both a pro and a con argument. Naturally, there's some role playing going on, because it's hard to feel strongly both ways, pro and con.
The column needs one more participant. If anyone here wants to join the party, this is your opportunity.
This month's hypothetical is presented below. The person who IMHO provides the best pro and con answers will be invited to join us next month. In fact, we may even use your answer this month!
Here's the hypothetical:
Newbie Norman visits his local coin shop and falls in love with a 1787 "New Haven Restrike" Fugio Cent graded "MS65 RED" by
a major third party grading service. After asking a few questions and haggling a bit, he buys it for $9000, a strong but not unreasonable retail price considering recent auction records.
Two months later, Norman learns more about the history of the coin. Despite the fact that these coins have been called "New Haven Restrikes" since their creation and appearance on the market approximately 150 years ago, they are not really restrikes and they were not made in New Haven. In fact, the coins were created by the Scovill Manufacturing Company of Waterbury, Connecticut, as a custom order for Charles Bushnell, a major collector of the day. In fact, Scovill manufactured the dies and the planchets, so there is nothing "authentic" about
the coins at all.
Norman is not pleased. He did not get the tangible piece of history he thought he was buying. He brings the coin back to the coin shop and asks for a refund. The owner takes the time to explain to Norman that he understands Norman's problem, but he is unwilling to refund the money or even buy the piece back for a small loss. As the shopowner explains, the piece had been on consignment to the shop, and the consignor was paid long ago. But of course he would be happy to take the coin back on consignment from Norman.
Norman will not take "no" for an answer. From his point of view, a counterfeit is a counterfeit, period. It doesn't matter to him if
it's widely collected, or if it has a long history. It doesn't matter to him that third party grading services all certify the coins as authentic
when the coins are in fact counterfeits. Norman wants his money back, now. Is he entitled?
The column needs one more participant. If anyone here wants to join the party, this is your opportunity.
This month's hypothetical is presented below. The person who IMHO provides the best pro and con answers will be invited to join us next month. In fact, we may even use your answer this month!
Here's the hypothetical:
Newbie Norman visits his local coin shop and falls in love with a 1787 "New Haven Restrike" Fugio Cent graded "MS65 RED" by
a major third party grading service. After asking a few questions and haggling a bit, he buys it for $9000, a strong but not unreasonable retail price considering recent auction records.
Two months later, Norman learns more about the history of the coin. Despite the fact that these coins have been called "New Haven Restrikes" since their creation and appearance on the market approximately 150 years ago, they are not really restrikes and they were not made in New Haven. In fact, the coins were created by the Scovill Manufacturing Company of Waterbury, Connecticut, as a custom order for Charles Bushnell, a major collector of the day. In fact, Scovill manufactured the dies and the planchets, so there is nothing "authentic" about
the coins at all.
Norman is not pleased. He did not get the tangible piece of history he thought he was buying. He brings the coin back to the coin shop and asks for a refund. The owner takes the time to explain to Norman that he understands Norman's problem, but he is unwilling to refund the money or even buy the piece back for a small loss. As the shopowner explains, the piece had been on consignment to the shop, and the consignor was paid long ago. But of course he would be happy to take the coin back on consignment from Norman.
Norman will not take "no" for an answer. From his point of view, a counterfeit is a counterfeit, period. It doesn't matter to him if
it's widely collected, or if it has a long history. It doesn't matter to him that third party grading services all certify the coins as authentic
when the coins are in fact counterfeits. Norman wants his money back, now. Is he entitled?
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
0
Comments
Con. Said dealer is going to lose a customer.
Pro. Said buyer will do his homework and learn about what he is planning on buying.
"Seu cabra da peste,
"Sou Mangueira......."
The answers should be from the perspective of an authority judging the case.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
It sounds as though Newbie Norman went into Stacks on west 57th street and dealt with Scott Mitchell.
Stewart
<< <i>this issue is really "above" the dealer and Newbie Norman. If a major TPG holdered the coin, the major TPG is on the hook for the coin's authenticity. The dealer should know that and help Newbie Norman in seeking restitution from the major TPG. The major TPG should take the coin back, cut Norman a check, and eat the loss. That's what the grade/authenticity guarantee is for and that's why TPGs buy insurance. >>
The TPG did its job. The marketing and hype of the coin itself is what led to the confusion.
Pro: Yes he is entitled. The dealer did not clearly state his return policy and mentioned nothing about this being a consignment piece. If consignments have a different return policy than buying store inventory it needs to be disclosed at time of purchase. In this case the dealer made a mistake and should at the very least offer to refund the buyers money minus a small restocking fee. The coin is "highly collectible" the dealer should have no issues finding a new home for it.
-Paul
Newbie Norman should be happy that the owner is willing to take the coin back on consignment. The coin was properly labeled. There was no deception in the sale. The term "New Haven Restrike" is in common use and has been for a long time; it is incumbent upon Norman to know what it is he buying. If I purchase egg plant from my grocery store, I am not going to be successful in my endeavor to return it because I learned to my regret after my purchase that, contrary to my ignorant guess, the vegetable has no eggs in it. Similarly Norman's dealer has no reason nor any duty to accept the return of the "New Haven Restrike" because of Norman's ignorance of a common name.
Pro:
The coin was called a "Fugio cent." It is far from that--it is merely a copy made well before the Hobby Protection Act. Were that coin made today, it would be required to have the word "copy" on it. Norman's dealer is taking advantage of a new collector's ignorance. Morally Norman's dealer must refund the money because there was no true meeting of the minds; what Norman thought he was buying was much different than what the dealer knew he was selling. Norman, however, is being unreasonable in insisting on his entire $9,000 returned immediately. He should meet the dealer halfway and accept the dealer's consignment offer.
Andy:
Above are my attempts to argue both sides. I expect you can see that my heart was in the Con side. One weakness of The Numismatist column for me is that the writers never reveal which side they actually favor. I wish they would; often I'd like to know what is the "majority" opinion about an issue.
<< <i>Norman wants his money back, now. Is he entitled? >>
No. Assuming the "few questions" he asked were accurately answered by the dealer, when Norman bought the coin, he got exactly what he was entitled to. The fact that he didn't understand what he was buying is nobody's fault but his own.
<< <i>Con:
Andy:
Above are my attempts to argue both sides. I expect you can see that my heart was in the Con side. One weakness of The Numismatist column for me is that the writers never reveal which side they actually favor. I wish they would; often I'd like to know what is the "majority" opinion about an issue. >>
This is a good point. While it should be obvious I sometimes get confused as to the difference between right and wrong in the scenarios.
Actually, the ANA mediators only voice their honest opinions at the end of the column. Surprisingly, they often disagree with each other.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
A woman walks into a store and picks up a "Gucci" handbag the owner say's that they are copies.Two months later she returns and wants a refund because it's not the real Gucci..........
Brother, without reading any of the other responses, I will say Newbie Norman is NOT due a refund. No fraud was commited. Newbie Norman didn't know what he was looking at and didn't take the time to do any research on the coin. Now he's suffering from buyers remorse.
The coin "is what it is", a coin that was minted in the 1860s by a private company. Private minted coinage isn't anything new in American newsmatics, hard time tokens, many private issuers of gold coin, civil war tokens, and Lesher Referendum Dollars are a few that come to mind. All of these coins are widely collected and are graded by the TPGs.
Newbie Norman is now declaring that he "didn't know" about the coin and that's no one's fault but his. Sorry Newbie Norman.
<< <i>Brother, without reading any of the other responses, I will say Newbie Norman is NOT due a refund. No fraud was commited. Newbie Norman didn't know what he was looking at and didn't take the time to do any research on the coin. Now he's suffering from buyers remorse.
The coin "is what it is", a coin that was minted in the 1860s by a private company. Private minted coinage isn't anything new in American newsmatics, hard time tokens, many private issuers of gold coin, civil war tokens, and Lesher Referendum Dollars are a few that come to mind. All of these coins are widely collected and are graded by the TPGs.
Newbie Norman is now declaring that he "didn't know" about the coin and that's no one's fault but his. Sorry Newbie Norman. >>
I was about to respond to this thread and then read Curly's response and found that he wrote pretty much what I was thinking (except the part where he began with 'Brother').
1. The coins are not authentic Fugio cents, and, as such, counterfeit coins, once revealed, are deserving of a refund by any ethical dealer and, per code, by any ANA member-dealer.
2. The dealer should have educated Norman on the history of the coin and made it clear to him that the restrike was not, in fact, a "genuine" restrike. An ethical dealer should educate a consumer, especially an unsophisticated one, of the nuances of esoteric numismatic items before selling them an item.
3. The dealer not accepting the return will sour the relationship between Norman and the dealer. An unhappy customer will likely not return to do more business. This is not an ethical point, but a practical concern.
Cons:
1. Before making an expensive numismatic purchase, Norman should have done the small amount of research required to discover the history of these pieces. Three minutes with the Redbook and/or five minutes searching online would have been sufficient for Norman to learn all he needed to learn so as not to be surprised later.
2. These restrikes have a long collecting tradition and are recognized as legitimate collectibles by authorities such as the authors of the Redbook, catalogers of major auction firms, and the principles of PCGS and NGC.
3. Norman paid market value for the item; he was not overcharged for something of little value or "ripped". He was not deceived by the dealer in any way.
4. Sight-seen in person transactions typically do not allow a return privilege. Most dealers will not take such returns at 60 days and are certainly not bound to do so.
5. The dealer never owned the coin, so his duty to vouch for the authenticity of the piece can theoretically be assigned to the TPG and/or the consignor.
Solution: The dealer offered Norman to take it on consignment. To be fair to Norman, in light of the misunderstanding and to help repair the relationship, perhaps the dealer could reduce or eliminate his usual and customary consignment fee. Strictly speaking, the dealer does not owe Norman a refund.
<< <i>
Newbie Norman visits his local coin shop and falls in love with a 1787 "New Haven Restrike" Fugio Cent graded "MS65 RED" by
a major third party grading service. .......
Two months later, Norman learns more about the history of the coin. Despite the fact that these coins have been called "New Haven Restrikes" since their creation and appearance on the market approximately 150 years ago, they are not really restrikes and they were not made in New Haven. In fact, the coins were created by the Scovill Manufacturing Company of Waterbury, Connecticut, as a custom order for Charles Bushnell, a major collector of the day. In fact, Scovill manufactured the dies and the planchets, so there is nothing "authentic" about
the coins at all.
Norman will not take "no" for an answer. From his point of view, a counterfeit is a counterfeit, period. It doesn't matter to him if
it's widely collected, or if it has a long history. It doesn't matter to him that third party grading services all certify the coins as authentic
when the coins are in fact counterfeits. Norman wants his money back, now. Is he entitled? >>
Sorry Norman. No money back. The coin was genuine in that the TPG labeled it for what it was. Norman's first mistake was knowing nothing about the coin when he bought it. The dealer didn't misrepresent the coin. It is exactly what the label says. The information about the history of the coin was available as he found it after two months. In this case, buy the book before you buy the coin would have saved Norman some money.
A number of coins have names that are not exactly literal. A $50 slug is not a slug at all (A small metal disk for use in a vending or gambling machine, especially one used illegally) but rather a bullion piece.
Norman, you received what you paid for and that is all you are entitled to.
Planchet
Yes, he sounds like he has a bad case of "entitled"!
Check out the Southern Gold Society
Con: Newbie Norm is not entitled to a refund. Newbie Norm paid a fair price for and received a 3rd party authenticated and certified re-issue. If he doesn't know the issue he should be asking lots of questions about returns and determining who he can talk to about the issue before purchase. The dealer did nothing to mislead Newbie but was trying to move the item on consignment for another customer. If the dealer wanted a happy customer he would take the coin back on assignment or at a small loss and offer to located a genuine issue of is liking for a fixed percentage.
David
In order for the dealer to give Norman the refund he would either have to go back to the consigner and retrieve the $9,000 (a very embarassing situation!) or buy back the coin himself in which case he assumes all risk of owning the piece. Both of these options are potentially problematic for the dealer. Offering to take back the con as a consinment seems like a very fair compromise---whatever loss Norman incurs could be considered the price of his numismatic education.
Presumably Norman did not discuss any terms of sale with the dealer prior to completing the transaction.
"If you ever want to sell that coin, please let me have first shot at it" he's probably selling something he NEVER wants to see again.
``https://ebay.us/m/KxolR5
(1) Major auction houses include the history of "New Haven Restrikes" in their auction descriptions, stating that although the coins are called "New Haven Restrikes" in actuality they are not restrikes and not from New Haven. While it may be common to call these counterfeits "New Haven Restrikes," it is also common to inform prospective buyers of the misleading nature of the phrase. While the dealer may not have engaged in illegal behavior in selling a counterfeit US coin using a common name, the dealer also did not engage in using the commonly accepted practice of explaining the term.
(2) The Fugio cent is a US coin issued under the authority of Congress. A "New Haven Restrike" is a counterfeit US coin. It is unethical to sell a counterfeit coin without disclosing the counterfeit nature of the piece.
Con: Norman should not get a refund from an ethical perspective.
(1) If said dealer would sell an Omega counterfeit as an "Omega Restrike" then the dealer should have no ethical issue selling another counterfeit as a restrike such as a "New Haven Restrike."
(2) The term "New Haven Restrike" is common in the coin collecting community. There is nothing unethical with selling undisclosed counterfeit coins.
Is the proper term for these "Scovill Fugio Counterfeits"? I think it might be more appropriate but "New Haven Counterfeits" may be more useful in alerting people to the true nature of these pieces.
What if the transaction is mail order instead of at a show or shop? With a mail order it is that much clearer--no refund. Now, if the dealer wants to bend over backwards and make some kind of arrangement, that is up to the dealer. The only special case would be if the dealer represented the coin as an investment, and that is clearly not the case in this hypothetical.
The other point is how much education can a dealer do? What if it is at a busy show, and the buyer has been waiting in line for a chance, and only has a few minutes to make their purchase, because the crowd at table is three deep? What if the dealer explains it clearly, but the buyer misunderstands? That is common with newbies because they hear what they want to hear, and leads to a deeper hole because the newbie swears up and down about what the dealer said. Do coin dealers need to start issuing waivers and disclaimers to avoid these kind of situations? A lot of good that would do, other than slow everything down and raise costs. The fool and their money will still find a way.
There are three scenarios possible:
1) The coin was represented by the dealer as a Fugio cent. In this case, Newbie Norm is clearly entitled to a refund because the coin was misrepresented.
2) The coin was discussed at length, and the dealer explained that New Haven restrikes are not genuine Fugios, but instead are copies. However, the copies are considered highly collectable in today's market. In this case, Newbie Norm is not entitled to a refund as the dealer made a full disclosure and Newbie Norm made an informed purchase.
3) The dealer simply handed the coin to Newbie Norm and quoted a price. The dealer honestly answered all of Newbie Norm's questions, but Normie wasn't informed enough to ask the right questions. In this case, I would argue that Newbie Norm is not entitled to a refund. Transactions are assumed to be caveat emptor, and anyone dropping $9K on a coin without understanding what he is doing or even understanding enough to ask the right questions is only the victim of his own ignorance.
To complicate the matter further, let's suppose that all of the discussion between Newbie Norm and the dealer was verbal, that there is no record, and it is not possible to prove which of the above scenarios actually occurred (this is likely). I believe that the most likely scenarios are 2) and 3), and I believe the proof of that is in the behavior of the dealer who offered the coin at a price appropriate for a New Haven restrike - in other words, the dealer's price is evidence that the dealer was not intending to mislead. Unless Normie can prove outright fraud as in 1), he is not entitled to a refund.
Finally, let's examine the possibility that Norm was defrauded on the description and therefore what his damages should be. I believe that Norman has suffered no damage at all - he purchased a coin at an appropriate market value, and the coin can be resold for approximately the purchase price. If the dealer wants to do Norm a favor, he can offer to buy the coin back at his appropriate bid/ask spread for such merchandise.
Other people have opined that Norm could be entitled to a refund because he was sold a counterfeit coin, and counterfeits are always refundable. Because the coin was labeled "New Haven Restrike" I think that is sufficient disclosure of the counterfeit, and that the ANA rules on counterfeits don't apply here.
Bottom line: I don't see any justification for a refund for Newbie Norm unless the dealer wants to give him one.
http://www.shieldnickels.net
Perhaps the dealer will offer Norman a complimentary copy of Eric P Newman's new Fugio book when it comes out.
Actually, it's out! Saw it last week in LB, and Charles Davis should have them for sale at Baltimore.
Lots of great answers here! We're going to use a couple of them this month. They're being selected mainly on the basis of providing angles not yet covered by the current contributors, so nobody should take offense at being left out! Not sure how next month will play out, but I'll post those details later....
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Depends on the questions.
If by the questions, the dealer realizes that the customer does not "know" anything about what he is buying, especially about the meaning of "New Haven Restrike", then I feel that the dealer has an obligation to make sure that the customer knows what he is buying.
IMO this is similar to the ads in non-coin arenas that used to say that they are selling fine silver dollars where the general public did not realize that fine has a numismatic meaning and was not exactly "fine" by definition. They have tried to put laws in place to curb this abuse but many advertisers still get around the laws with their crafty wording.
Joe.