Coin Dealer Ethics Follow-Up: Name Your Price?
Wednesday February 6, 2008
In the latest installment of the Coin Dealer Ethics column, we considered the scenario submitted by reader Jim Bucki, briefly stated as follows: A lady (Mrs. Smith) enters a coin store and offers to sell a collection of Lincoln Memorial Cents. The dealer, (Eddie,) greets her by name and buys her collection after they negotiate a price of $195, essentially paying what the lady asked for. Once she leaves, the dealer's assistant (John) discovers a doubled die cent worth up to $2,000 among her coins. What should Eddie do? (You can read the entire scenario dialogue and view all of the reader comments on the page for Coin Dealer Ethics: Name Your Price?)
This question generated more comments than any previous Coin Dealer Ethics column! It is obvious that this simply-stated but deceptively complex scenario struck a chord with people. Some highlights:
Although I had a pretty good idea of my own feelings about this situation when I first read it, some of the comments were quite persuasive! I wavered a bit in my beliefs about who was right, but in the end I wound up back where I had started, partly after considering Connie's arguments. When people go to a coin dealer in his store (or at his booth at a show) to sell something, they are relying on his integrity and expertise to get a fair price. Just because people don't explicitly state, "I want an appraisal please, and then I'd like an offer for my coins," the honest coin dealer should put himself in the customer's shoes and realize that this is what they really want. Any dealer who plays words games or semantics to avoid this duty is not being truthful.
What made this particular scenario so compelling is that everyone got what they wanted...on the surface. The lady got the price she asked for; the dealer got a great deal in the end (and he certainly wouldn't have paid her price for the collection if he didn't think there was a profit to be made. He is a businessman, after all.) So, on the face of it, everyone should have been satisfied. The real question behind all this was, "Is the dealer ethically obligated to go the extra mile and further compensate the seller?" I believe that he is, when it is possible to do so.
Would you like to see your scenario featured here? Please send your ideas or situations to coins.guide@about.com.
This question generated more comments than any previous Coin Dealer Ethics column! It is obvious that this simply-stated but deceptively complex scenario struck a chord with people. Some highlights:
I don’t think that the dealer did anything wrong here, except make an offer before he had a real idea what he was buying. That may, in part, explain why he is close to going out of business: he may just not be a particularly savvy businessman. -- gdnp
There’s a little blame for everyone here. The woman should have had her coins appraised before attempting to sell them. The dealer maybe should have offered more money. But honestly, the woman came in and named a price. It’s not the dealer’s fault that she was woefully uninformed about the value of her coins. -- Ward Adams
Eddie is a COIN DEALER who has been in that business for all those years. He is supposed to be an expert! Under those circumstances, yes he is wrong. He should make every attempt at contacting Mrs. Smith and offer her more money for that album. She was acting in good faith and he should too. -- Jerry Hastings
Adam Smith, in the Wealth of Nations, pointed out that any transaction benefits both the seller and buyer by necessity. If either party is not happy with a transaction it will not occur.The Comments section turned into a fascinating debate when Connie, a lawyer from California, left an interesting legal analysis of the situation. A (very small) excerpt:
Transactions, then, do not have losers, just winners. To argue over if transactions should only have winners who share the equality of the transaction is to argue against free trade.
Without large wins, owners would not be able to offset the daily loses. It is these “wins” that keep a business running. Just as the US Mint. -- Cold_Hard_Disks
The thing here is that Eddie is a dealer; Ms. Smith comes to his store because he is a dealer to ask him about selling her penny collection. It’s not a garage sale - she went to a dealer who gets a business license from the government. He’s special - he’s a professional coin dealer. It’s all about who he is and where he is (in his store acting as a dealer). Ms. Smith went to a dealer and he took advantage of her lack of knowledge. He was sneaky with words. That’s not OK. -- Connie in CaliforniaSeveral readers responded to Connie's various points, and she, in turn, replied to them. (The discussion was getting so interesting I was tempted to move it to the Forum! However, we are getting a major upgrade to our About.com Forums in a few weeks, and when that happens I probably will try to steer some of our conversations to that venue.)
Although I had a pretty good idea of my own feelings about this situation when I first read it, some of the comments were quite persuasive! I wavered a bit in my beliefs about who was right, but in the end I wound up back where I had started, partly after considering Connie's arguments. When people go to a coin dealer in his store (or at his booth at a show) to sell something, they are relying on his integrity and expertise to get a fair price. Just because people don't explicitly state, "I want an appraisal please, and then I'd like an offer for my coins," the honest coin dealer should put himself in the customer's shoes and realize that this is what they really want. Any dealer who plays words games or semantics to avoid this duty is not being truthful.
What made this particular scenario so compelling is that everyone got what they wanted...on the surface. The lady got the price she asked for; the dealer got a great deal in the end (and he certainly wouldn't have paid her price for the collection if he didn't think there was a profit to be made. He is a businessman, after all.) So, on the face of it, everyone should have been satisfied. The real question behind all this was, "Is the dealer ethically obligated to go the extra mile and further compensate the seller?" I believe that he is, when it is possible to do so.
Would you like to see your scenario featured here? Please send your ideas or situations to coins.guide@about.com.
Comments
I re-read the scenario & it appears as though most have over looked an important ingredient in favor of both parties. She was offered to leave the set at his shop on consignment. She denied this offer wanting immediate results for the collection. I call this haste. Had she agreed to consignment, the buyer would have had to evaluate the collection more closely to insure the proper selling price. It is also apparent that she had some idea of what the collection was worth (maybe had it looked at by someone else) hence her counter offer of $175 PLUS the cost of the album. hmmmm?
I again see nothing wrong, except the fact the seller was in too big a hurry to get some fast cash. Well, she got it.
It’s not always the dealers fault.
Well … We all had our opinions about this one.
I had a tendency to waiver back and forth my self.
When Connie the attorney brought up fraud on the dealers part, i mis-used a term my self.
I wasn’t thinking fraud.
Since that is a possible case.
Here is another legal term that holds true in federal cases.
Not that it is the case here.
Mis prison of a feloney.
If a crime has been commited. And no one says anything, then the partys who witnessed the crime take place can be as guilty as the guilty party commiting the crime.
There are people in prison for exactly that.
Two people witnessed this take place.
Where it would go from there is any bodys guess.
coiny
I think the question of fraud here is way out of bounds. If the dealer offered $195 knowing that it was worth $2000, then you could question fraud, but he offered what he thought the coins were worth and the seller accepted. What if the 1972 Doubled die had not been discovered until days or weeks later? Was he still obligated to give the woman more? What if he had discovered that one of the semi-key dates had a scratch on the reverse? Or if he bought it at the MS67 price and it only graded MS65? could he legitimately have requested a refund? I don’t think so.
If you buy a painting at auction and discover an original copy of the Declaration of Independence hidden under the frame, you don’t owe the seller anything.
Bottom line: he made a good faith offer, and it was accepted. This was not done on consigment, or on approval. Done deal. No backsies.
I have to agree with post #3. I think fraud is way out of bounds. I also think that the post from “Connie in California” (a lawyer) commenting on the dealer as being “sneaky with words” is a bit ironic. C’mon, lets face facts. A lawyers entire career is based on just that.
Given that he was a dealer, he should have made a closer inspection of the coins, and offered her a fair price for the coins and album. Instead, he had the her loss my gain attitude.
Decades ago when I was a boy and collected coins, there was an unspoken rule of integrity. A dealer would sell a coin in the condiion shown, and the purchaser paid. The “buyer beware nonsense” did not apply but the unspoken rule of mutual integrity applied. Integrity was a quality that one could expect from coin dealers and coin collecters.
In this era, coin collecting has become a scam. TV hucksters sell current coins claiming rarity and using the scam of coin grading of common coins to create rarity. The reality is overpriced junk.
As just mentioned, grading is a scam. Coins now become rare because a coin is graded and may be a few of that grade. A 1960 Jefferson Nickel in MS-70 sold for $30,000 because it was the only one ever graded at MS-70. Come on! The nickel is a 1960 nickel that had a large mintage and even today is worth a nickel.
Dealer scamming, the US Mint overcharging for current collector proof and mint sets, dealers cheating people–like your old woman, and the grading scam have turned a great hobby in to another venue for crooks.
You did the right thing by telling the old woman that the coin dealer intended to con her. Doing the right thing, as you did, is not always easy. Honesty is mocked in this era of where cheating is accepted as being all right.
Thank you for doing the right thing.