Coin Dealer Ethics - The Nasty Practice of Cherrypicking Proof Sets
Wednesday September 19, 2007
The practice of dealers cherrypicking coins from the Proof sets is what I refer to here as a "nasty practice." It is becoming increasingly common in recent years, partly because of the ready market of ill-informed novices who buy from online auctions, and partly because of the great premiums attached to coins graded PR-70.
Most people aren't even aware that the Mint doesn't seal the Proof set packages. The plastic cases can simply be pulled apart, and the coins switched out. If the Mint would seal the Proof sets so that the cases must be cracked to access the coins, it would help put a stop to this fraud. Unfortunately, dealer abuse of Proof sets extends even further! I have had several coin dealers tell me at various times that they check the Proof sets when they come in from the Mint, and return the ones that won't grade PR-69 or 70. Since the Mint takes unconditional returns, these unscrupulous dealers keep sending the 68's back until they are satisfied. Of course, when the Mint gets back a perfectly fine looking Mint set (at naked-eye view, anyway,) it just sends them back out again to another buyer. Why shouldn't they? The sets are perfectly fine by honest standards. But who do you think ends up with these inferior sets? It's gotten to the point where I make my purchase right away when things go on sale at the Mint, since I've found that I get better quality coins that way in the long run, whatever the reason might be. Until the Mint puts a stop to dealer abuse, it is the vast overwhelming majority of average collectors who suffer.
Among the several hundred email messages I get per week, a number of them ask for help or advice in dealing with various dealer situations. Consider this question, sent to me by Rick B. (and edited a bit for clarity):
"Hello, I have a question about a legal versus ethical situation. I have dealt with my local coin dealer for some time now and was, for the most part, happy with my past purchases. However, I recently bought a 14-coin Proof set from him, and when I got home I found that every one of the Mint's coin holders had been opened. All but two of the coins appear to have been swapped out and replaced with lesser-grade Proofs. He even left a fingerprint on one of the coins!
Is he within his legal rights to do this kind of thing and not make any mention of his underhanded tactics? Should I march down there and grab him by his throat and demand one of his own personal Proof sets? Or should I run an ad in the local paper and contact the local news team? It seems to me that he is guilty of fraud. Your thoughts, please?
Thank you,
Rick B."
What do you think Rick should do? Go for the jugular, or give his dealer the benefit of the doubt based on previous experience? Or maybe something in between? Share your opinions via the "comments" link below, and next week we'll have a look at some of them.
Update - Read the Cherrypicking Proof Sets follow-up.
Most people aren't even aware that the Mint doesn't seal the Proof set packages. The plastic cases can simply be pulled apart, and the coins switched out. If the Mint would seal the Proof sets so that the cases must be cracked to access the coins, it would help put a stop to this fraud. Unfortunately, dealer abuse of Proof sets extends even further! I have had several coin dealers tell me at various times that they check the Proof sets when they come in from the Mint, and return the ones that won't grade PR-69 or 70. Since the Mint takes unconditional returns, these unscrupulous dealers keep sending the 68's back until they are satisfied. Of course, when the Mint gets back a perfectly fine looking Mint set (at naked-eye view, anyway,) it just sends them back out again to another buyer. Why shouldn't they? The sets are perfectly fine by honest standards. But who do you think ends up with these inferior sets? It's gotten to the point where I make my purchase right away when things go on sale at the Mint, since I've found that I get better quality coins that way in the long run, whatever the reason might be. Until the Mint puts a stop to dealer abuse, it is the vast overwhelming majority of average collectors who suffer.
Among the several hundred email messages I get per week, a number of them ask for help or advice in dealing with various dealer situations. Consider this question, sent to me by Rick B. (and edited a bit for clarity):
"Hello, I have a question about a legal versus ethical situation. I have dealt with my local coin dealer for some time now and was, for the most part, happy with my past purchases. However, I recently bought a 14-coin Proof set from him, and when I got home I found that every one of the Mint's coin holders had been opened. All but two of the coins appear to have been swapped out and replaced with lesser-grade Proofs. He even left a fingerprint on one of the coins!
Is he within his legal rights to do this kind of thing and not make any mention of his underhanded tactics? Should I march down there and grab him by his throat and demand one of his own personal Proof sets? Or should I run an ad in the local paper and contact the local news team? It seems to me that he is guilty of fraud. Your thoughts, please?
Thank you,
Rick B."
What do you think Rick should do? Go for the jugular, or give his dealer the benefit of the doubt based on previous experience? Or maybe something in between? Share your opinions via the "comments" link below, and next week we'll have a look at some of them.
Update - Read the Cherrypicking Proof Sets follow-up.
Comments
Have you discussed this with him first and let him know if he doesn’t correct the situation … “you will contact the newspaper? If he doesn’t, then call in the news, help protect others wallets! How can you tell they are opened? I have some sets that look like they were taken out but I looked at the outside case looking for any kind of indication they were opened but not even a scrape, but the plastec where the coins rest inside are peely, shredding.
I’d give him the benefit of the doubt: he may have purchased the set that way. I would return the set to the dealer and ask for my money back, explaining the reason. If he refuses, I would find another coin dealer.
A fine example of “buy the coin, not the holder”.
I would ask for my money back and then find another dealer. Best of all get a subscription from the mint for all you mint purchases. A fingerprint means they were opened! L
Does Rick know for certain that the coin dealer actually switched coins or perhaps bought the sets over the counter? He should have checked the coins before purchasing, though I can see where he would have trust in his dealer to provide him with a nice set, and not bother. Since he was going to inspect them anyway, why not then and there? At any rate, give the dealer a chance to make it right, and if he comes through and does the right thing, fine, but make certain that you check each and every purchase in the future before leaving his store. If the dealer refuses to make it right, then not only should you stop dealing with him, but you should at least alert your coin buying friends to be on guard whenever dealing with this person.
The only other thing I could add would be to let the dealer know, in person, that you don’t plan to do business with him in the future if he doesn’t replace the set, or adjust his price downward. Assuming the dealer is a retailer properly schooled in the “customer is always right” doctrine (and that you have been a loyal customer) he should do the right thing. If not, Hasta La Vista, Baby!
I don’t believe that getting a refund or exchange is enough. The dealer should be required to explain the situation and maybe to provide some evidence of his lack of involvement or prior knowledge. I he was involved or had prior knowledge, he is guilty of fraud. Maybe his is innocent though!
Don’t let him just sell the coins to another unsuspecting customer. If he does, there is no accountability.
Hello And thank all of you for your suggestions.As for the questions about have I brought this to his attention .I wish he keeps very odd hours ,He is sometimes gone for 3 out of 4 weeks each month.It is like you won a prize when you do catch him there.So I sit and get mad .I do get all my proofs from the mint as a rule .I was getting a friend this set who has just started collecting.I have had the sickness most of my life .No doubt each of the holders has a very visable pry mark on the corner of each.And he told me that he had just recieved them from the mint just the day before so .I should have got a clue by all the single proof silver qurters he had for sale at top end prices .I am still leaning towards grabing him up by his throat ,He would just push the alarm and some rookie cop would put a bullet in me so I guess that is out.Anyone on the legal aspects Dose the Mint have no rules about a agent for them defrauding the public for his own personel gain at every one that he takes in this manner, anyone? thank you Rick B.
The guy sounds a bit “Shady” to me & for this reason I would try to let him rectify the situation first. Getting physical or running ads in the paper may get your own butt in trouble as well. Assault charges & being sued for slander may not be the road you want to travel. In short you may just have to cut your losses & move on chalking it up to experience. Karma has a way of taking care of folks like him, trust me!
Good Luck.
Why not contact the mint,see what they say.You could always put a brick through his window,without the finger print ,like that was on your coin.
Find out what his store policy is on returns. Then return your purchase for a full refund. Save the violence for more importent events. If your paying him a premium for the coins you bought, you surely would pay less of a premium at the mint. Unless those coins aren’t available through the mint. Then take your business elsewhere.
As for items going back to the mint,
even “Lowe’s” and other retailers, have procedures for constant “returners”. The Mint should stop doing business with these people,
and watch how fast it stops.
As to open sets, with a finger print;
how about asking the local authorities to check it, as it is a crime to defraud some one. It will clear him or
or hold him responsible, which will
end up in the paper, without you fearing reprisals.
found a 1967 yellow penny no mint mark this coin is in mint condition.it looks better than any 2007 I have around the house. where could this mint,yellowish gold coin came from.I’m not a dealer or collector
How is this fraud???
He sold a proof set, the coins inside were all proof coins.