A Story About Writing a Personal Check at a Major Show

dragon · February 14, 2011 5:44AM

This story takes place sometime between 1989 and 1990 if I remember. I'm at the ANA Summer Show walking the the bourse floor in my never ending search for cool Morgan dollars. This was a time just after the coin market had suffered a big downturn and many dealers who had huge inventories (especially generic material) were hurting bad, and some had become all but illiquid and cash was king.

So I walk up to the A-Mark table and there's a nice man working the table named Wayne. I am looking through a ton of certified Saints and also many high grade Morgans and one really caught my eye. It was a beautifully vibrant colored 1881-S in NGC MS67. I ask to see it and ask how much, Wayne tells me it's $1850.00 which is a bit more than I had hoped he'd say. I was willing to go like $1650.00 for it and I ask him what his bottom line on it would be. He thinks for a second and looks again at his cost code sticker on the slab and tells me he'll do it for $1700.00 and I agree. I realized I had already bought some other coins at the show and didn't have enough cash on me to cover it, so I ask him if a personal check is ok. He gives me this 'look' and says "are you a dealer?" I say no and ask him why, and he tells me they are not accepting checks from any dealers on the floor right now......no exceptions. He then opens up this small zippered bank pouch and takes out a wad of bad checks and shows them to me. He then says "do you know how much in bullion sales I have to do to make up for these bum checks?" He then asks who I know at the show and I give him a few well known dealers names who know me and would vouch for me. He seems satisfied so I write out the check for $1700.00 and hand it to him. He looks at the the check and then looks me right in the eye and says "are you sure this check is good Howard?" I say yes, it's good or I wouldn't be writing it. He then says "ok, I'll take it because you answered me without looking down or looking away." He still doesn't seem awfully comfortable and as he's writing out the receipt he asks if I have an ID and major credit card. I say "geez Wayne the check is good, if you want you can hold the coin til it clears and ship me the coin." He laughs and says "ok, nevermind, I trust you, it's just if I get one more bum check my boss will kill me."

TexasNationals · February 14, 2011 5:51AM

Unfortunately this has been happening much more since the economic downturn. I was taking to a dealer a few weeks ago and mentioned another dealers name and he says " Yeah, make him pay you in cash, he just burned me for $39k!" I asked who else I should avoid taking checks from and we had a long conversation, too long.

kranky · February 14, 2011 6:04AM

I can imagine that if dealers weren't accepting checks from other dealers, that would only aggravate the liquidity problem. Kind of a death spiral there.

Something on this topic I will never forget... When I first found this board, and was gearing up to travel to the first big show I had ever been to, I asked what I could do to use personal checks at the show to avoid carrying cash. I was just jumping in, had no dealer contacts, no references. All I could cite was a 15-year membership to the ANA. Mr. Will Rossman (a dealer and ANA board member at the time) posted to say he would vouch for my check at the show, just page him if I needed the reference. He had never met me, but generously offered to help me out. Turned out I didn't need the help, but I will always remember his kind gesture.

PerryHall · February 14, 2011 6:14AM

I knew a dealer that got a bad check from another coin dealer. He wrote "BAD" on the check with a red magic marker and put it in his display case. It wasn't long before this other dealer ran up to buy his check back.

BigRick · February 14, 2011 6:18AM

If dealers had better credit and didn't worry so much about giving away 3% or so in fees they'd get credit card merchant accounts.

shorecoll · February 14, 2011 6:19AM

How will it be now with the instant check clearing systems? I wrote a check at my car dealer service department and it cleared by the time I drove 5 miles back to my office.

Staircoins · February 14, 2011 6:20AM

I have taken many checks, large and small, from both dealers and collectors, but only had one bounce once. I was set up at a show in Auburn, MA, and had a gentleman ask me if I'd take a check for a $30 coin. He said that he needed to pay by check because he'd already spent all the cash that he brought with him to the show.

The check was returned NSF. I called him, and of course "there had to be some mistake" because there was "plenty of money in the account". So, after he agreed that he would pay the fees if it bounced a second time, I agreed to redeposit it. Of course, another NSF. That time, he sent me a money order.

That $30 coin ended up costing him $80 ($30 + $25 + $25), plus his money order fees, in total.

Sad.

Staircoins · February 14, 2011 6:23AM

<< If dealers had better credit and didn't worry so much about giving away 3% or so in fees they'd get credit card merchant accounts. >>

I had a merchant account. I took MC, Visa, and Discover.

In over 3 years I think I had 4 transactions. Folks don't want to buy coins on plastic.

BigE · February 14, 2011 6:23AM

I always pay cash when I go to a show, and have only written checks to dealers whom I know, and who know me. What do dealers do when someone wants to write a check, and the dealer doesn't know the person at all? I wouldn't take a check for 1000.from someone I didnt know, seems like this would make for some awkward moments. Do customers expect dealers, or anyone to take checks??-------BigE

coindeuce · February 14, 2011 6:27AM

Usually the problem with dealers writing bad checks is not a matter of retribution, or sloppy bookeeping, or even economic downturn. It is a matter of having the belief in the entitlement to live beyond their means. Many coin dealers that I know and respect are hard working and respectable. There will always be a certain percentage among the ranks who feel they are above reproach and censure. For them, the end rather than the means is justifiable. Only one problem with that though. WE ALL DIE.

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Ahrensdad · February 14, 2011 6:33AM

<< I always pay cash when I go to a show, and have only written checks to dealers whom I know, and who know me. What do dealers do when someone wants to write a check, and the dealer doesn't know the person at all? I wouldn't take a check for 1000.from someone I didnt know, seems like this would make for some awkward moments. Do customers expect dealers, or anyone to take checks??-------BigE >>

In the few instances where I am set up at a show and someone that I've never met wants to write a large check with no references, I ask if it's okay to mail the coin AT MY EXPENSE once the check has cleared. They get a receipt and all of my contact information. I have never lost a deal because of it. It should be noted it's not a common occurance.

Coinosaurus · February 14, 2011 6:57AM

I think there are also cases where banks send checks back NSF and it is a bank mistake, not a low balance problem.

So don't assume all NSFs are deadbeats.

I had a case where a guy's check came back NSF, I won't say his name here, but I think everyone on the board would universally agree that this guy would NEVER write a bad check, his reputation is that good. He wrote another check and there was no problem.

truthteller · February 14, 2011 8:05AM

Wayne Pratali was the dealer representing AMARK back in the late 1980's, early 1990's. He is a good, honest man. I believe he is retired and living in Texas.

Bounced checks are a sign of either VERY GOOD business or VERY BAD business. I knew of several dealers who were doing so much business from 2003-2006 that they couldn't keep their checking accounts balanced and a few of them bounced a check or two. In general, if a dealer bounces a small group of checks, the bourse never hears about it. But if the dealer starts bouncing $10K+ checks, then it spreads like wildfire.

I remember in 1990, when Safra bank took certified coins from dealers as collateral for loans. SOOOO many dealers were using SafraBank to leverage deals, that often when you bought a coin, the merchandise came from SafraBank's vault, not the dealer's inventory. I would be very nervous right now if I took certified coins as collateral for any large loan.

TRUTH

DieClash · February 14, 2011 8:15AM

Interesting OP and responses. Very educational.

500Bay · February 14, 2011 8:30AM

<< Folks don't want to buy coins on plastic. >>

Interesting. I always prefer to pay with plastic - no large wads of cash, and it protects the buyer.
I usually find the price goes up about 5% if you try and pay with a credit card.

skier07 · February 14, 2011 8:43AM

I bought a coin at Long Beach ( unfortunately it wasn't a Dahlonega ) and I paid by check. I really wasn't planning on any purchases, plus I prefer not carrying cash with me especially in Long Beach. The dealer looked at me sheepishly as we had never done any business together before. I told him to deposit the check in his account and when the check clears he can send me the coin. About 10 days letter I received the coin in the mail and the next day he called me thanking me for my business.

Bruce

hiijacker · February 14, 2011 11:25AM

How comfortable do you feel selling coins at a show and receiving a check from a dealer?

bidask · February 14, 2011 11:33AM

Just after the downturn and they were still asking $1800 for an 1881 s in ngc 67 ?

Constantine · February 14, 2011 11:50AM

Working in the financial services industry for a number of years, and in my earlier days handling phone calls at a brokerage firm on clients whose funds came back as NSF, I can tell you that there are dozens of reasons why a check will not clear that do not pertain to the client not having the funds nor desire to have made good on the transaction. That does not mean you should not accept checks without scrutiny, nor be concerned when there is initially an issue as clearly that is good business practice. However, not jumping to conclusions and keeping an open mind at least in the beginning is a wise thing to do.

I have always felt sheepish in using a credit card at a show. In a few times I have asked if they take it or whip it out to pay, I feel like I am scoffed at and they think I have no money. But the reality is there is protection on both sides of the transaction, albeit there is a fee to the seller. I wonder if "bumping" iPhones with Paypal at a show will ever take off? Or something similar to that where you can pay the transaction at the dealer's table with a small netbook he or she may have for the purpose to log into Paypal?

BAJJERFAN · February 14, 2011 12:18PM

<< How will it be now with the instant check clearing systems? I wrote a check at my car dealer service department and it cleared by the time I drove 5 miles back to my office. >>

I write checks at the local P.O. and Sam's club and it takes several days to post to my account.

dragon · February 14, 2011 2:10PM

<< Just after the downturn and they were still asking $1800 for an 1881 s in ngc 67 ?

>>

Yes......as I mentioned, it was a very nicely toned piece with vibrant greens and reds, etc.

illini420 · February 14, 2011 2:28PM

<< How comfortable do you feel selling coins at a show and receiving a check from a dealer? >>

If it is someone I've dealt with and trust, then I'm cool with it. Of course cash is better though!!

I was really only uncomfortable taking a check from a dealer once as it was a pretty big dollar amount from a dealer I've never dealt with before. But I still did the deal because the bank was a major bank that was in the area and I knew I could take the check to the bank the same day and convert it to cash. I did just that and then took the cash to my bank. If I would have had any problems doing that, there would have still been time to return to the show and confront the dealer.

djdilliodon · February 14, 2011 2:44PM

I have never wrote a check for coin(s) purchases ever. If im buying online its either paypal or plastic. If im buying in person its always cash and boy have i saved alot of money in taxes that way

PerryHall · February 14, 2011 10:44PM

<< I have never wrote a check for coin(s) purchases ever. If im buying online its either paypal or plastic. If im buying in person its always cash and boy have i saved alot of money in taxes that way

>>

How do you avoid paying taxes?

lkeigwin · February 14, 2011 11:21PM

<< How will it be now with the instant check clearing systems? I wrote a check at my car dealer service department and it cleared by the time I drove 5 miles back to my office. >>

"Instant check clearing" has been around for a dozen years. I don't know of anything new except that some banks allow you to shoot images of checks and send them by phone. But I think that merely substitutes for delivering physical checks to the bank, and not instantly moving funds.

Is there something else new?
Lance.

golden · February 15, 2011 6:42AM

A lot of dealers will not charge sales tax on cash purchases.

Greeniejr · February 15, 2011 6:49AM

<< 

<< How will it be now with the instant check clearing systems? I wrote a check at my car dealer service department and it cleared by the time I drove 5 miles back to my office. >>

"Instant check clearing" has been around for a dozen years. I don't know of anything new except that some banks allow you to shoot images of checks and send them by phone. But I think that merely substitutes for delivering physical checks to the bank, and not instantly moving funds.

Is there something else new?
Lance. >>

Instant check clearing is available but the cost is similar to that of a credit card, maybe a little better. People ask us about it all the time and we tell them that it just doesn't make sense for us to pay the 2-3% (which we would pass on to them) for the service.

coindeuce · February 15, 2011 10:20AM

<< 

<< 

<< How will it be now with the instant check clearing systems? I wrote a check at my car dealer service department and it cleared by the time I drove 5 miles back to my office. >>

"Instant check clearing" has been around for a dozen years. I don't know of anything new except that some banks allow you to shoot images of checks and send them by phone. But I think that merely substitutes for delivering physical checks to the bank, and not instantly moving funds.

Is there something else new?
Lance. >>

Instant check clearing is available but the cost is similar to that of a credit card, maybe a little better. People ask us about it all the time and we tell them that it just doesn't make sense for us to pay the 2-3% (which we would pass on to them) for the service. >>

I think the initial comment referred to the "Check 21 Act" which was authorized by the 108th Congress in the fall of 2003. No more check kiting AKA floating paper.

Lakesammman · February 15, 2011 10:31AM

Collecting seems harder these days. I've had 2 deals fall apart in the last month and 2 others where I've agreed to wait 1-2 months for final payment.

atarian · February 17, 2011 4:00AM

how often and comfortable are sellers ( non dealers) feel about taking checks from dealers? Im not talking major shows ( I would think most of those would be good for it) but the smaller shows and such. I guess even at major shows dealers may be good for it but how many times you try to sell something cause they have the best price and you might never have seen them before but they have alot of nice coins and stuff

ChrisRx · February 17, 2011 4:11AM

I only write checks to dealers I know and have done business before.

All other dealers I use cash, but if I don't have enough on me at the time I do not have a problem writing a check and letting the dealer mail me the coin when it clears.

Trust is earned.

shottaker · February 17, 2011 1:27PM

<< If dealers had better credit and didn't worry so much about giving away 3% or so in fees they'd get credit card merchant accounts. >>

Its not a matter of credit. Its a matter of the visa/mc rules. You cant pick and choose which items to sell by cc. Way back a lot of gas stations charged less for cash transactions then cc transactions. The card companies cheerfully yanked their card machines back and put a lot of station owners in financial trouble as a lot of sales there even in the 80's were by cc.

Think bullion. You cant charge more for cc transactions (or I dont know of the company that lets you do that without threatening to revoke the machine). The only way you can get around it is by pricing everything 3% then giving a cash discount. Then what about the fact that most oter businesses that deal with cc's have a much higher profit margin. If you sell/replenish/sell a couple hundred ounces of gold in a month and are still waiting to get paid by the cc co. it hurts a lil.........

Credit cards can work for dealers if you deal only in higher margin numismatic items and NO bullion or net priced stuff that youre really close on.
OR
My buddy takes his machine to major shows and makes a killing charging 5% just to run the transactions for other dealers and cut them a check. Takes a little horsepower and having a good rep is all.

Plus a LOT of retail customers will beat someone down on the price only to whip out the card after. Some of them know the rules and try to strongarm the merchant into a losing deal on bullion (think discover card when they had real cashback....). Someone tried it with me years ago, and I was fed up with the cc garbage and handed him the phone and said he was welcome to file a complaint I didnt want the machine anymore anyways..............

Checks are cool. Only bad check I have EVER received from the public (dealers are another story theres a few turds out there), was for a $3 ebay transaction....................

scottgardener · February 17, 2011 4:11PM

JJ Teaparty took my check at a show, but waited for the check to clear and then mailed the coin. We both thought it was a fair solution, as many of the vendors were not taking checks from strangers, and this was my first big show in recent times, about three years ago.

A Story About Writing a Personal Check at a Major Show

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