Coin Dealer Ethics Follow-Up: Out-of-Date Prices
Wednesday June 4, 2008
Last week, I wrote about my experience at a recent coin show, where I encountered several dealers who had prices on their coins which were below bullion value. In the transaction that got me started looking at this more closely, a dealer had several 75- to 120-year-old One Peso coins from Mexico with a .7860 ASW (actual silver weight) priced at $1.50 each! I bought a whole pile of .3930 ASW Fifty Centavos coins for $1 each. Granted, these coins were moderately worn (grades like F and VF) but the prices were so low that I asked the dealer if he had made a mistake in pricing them. Later that day I encountered 4 or 5 more dealers who were selling silver coins below bullion value, and came to the conclusion that some dealers aren't keeping up with the fast-paced bullion market of late. I asked readers the question, "Does the buyer have an ethical responsibility to point out cases where the coin dealer has made a pricing error for some reason?" (You can read the entire scenario on the original Coin Dealer Ethics - Out-of-Date Prices page.)
For some reason, this topic did not resonate with readers as well as most of my other Coin Dealer Ethics columns. There were comparatively few comments, although the ones that were given were mostly thoughtful and articulate. Maybe the column was just too long, with too much drivel in it. Or maybe it was simply a matter of people disagreeing with my obvious pro-ethical bias on this matter of pricing, but not wanting to go on the record to say so. One comment was quite critical of my thought processes during the transactions:
One reader expressed an opinion about buying for the bullion, rather than the numismatic value:
Another reader offered a caution about buying based on bullion value alone:
For some reason, this topic did not resonate with readers as well as most of my other Coin Dealer Ethics columns. There were comparatively few comments, although the ones that were given were mostly thoughtful and articulate. Maybe the column was just too long, with too much drivel in it. Or maybe it was simply a matter of people disagreeing with my obvious pro-ethical bias on this matter of pricing, but not wanting to go on the record to say so. One comment was quite critical of my thought processes during the transactions:
This is not an ETHICS question at all. This about an inexperienced young buyer with a total lack of real life experience in the market place. Why all these strange, variant thoughts should go through someone’s mind while shopping for a commodity item is puzzling.Since I have been buying coins for almost 40 years, I don't think I have any lack of real life experience in the marketplace. I do, however, have a lack of experience seeing coin dealers intentionally pricing their inventory at 20% to 25% of melt value! BB states that these dealers have settled on their prices well before they arrived at the show. Well, this is my point exactly! They priced their merchandise so long ago that they're virtually giving it away by current market standards, and based on my nearly 40 years of experience in the marketplace, I thought there was a decent chance that they had mistakenly overlooked updating these prices. Hence, the subject of this debate.
Every dealer placing merchandise on the bourse table for sale has, by this very action, established exactly what price they want for their merchandise. They settled on these prices well before they arrived at the show... -- BB
One reader expressed an opinion about buying for the bullion, rather than the numismatic value:
I don’t know that I would stop and consider the bullion content. I usually pay attention to the numismatic value of a coin, since I’m not really a metals person. In that sense, I would point out a glaring price error of a collectible coin to my local dealer because she’s given me some pretty good deals in the past. -- Ward AdamsComments like this are intriguing. Does this mean that Mr. Adams would tell his local coin dealer about a pricing error, but not tell a bourse dealer at a show?
Another reader offered a caution about buying based on bullion value alone:
The coins currently are a bargain based upon their bullion value .. only if you sold them now. What’s to say in 1 year the price of silver will be back at $10 or $12. I personally don’t think that will happen, but one never really knows what the price of silver will be in the future. -- Big TOur final featured comment this week is from a collector who can empathize with me... and who also has a theory as to why this dealer might have sold the Mexican coins so incredibly cheaply:
I know what it’s like to feel guilty about getting too good of a deal. It just means you have a good heart.If you'd like to see some of my previous Coin Dealer Ethics columns, here are a few of some of the most popular topics:
I’m not sure why that dealer didn’t take those coins and have them melted for a profit. Perhaps as someone who loves and appreciates coins, he couldn’t stand the idea of knowing they were being melted and being taken away from collectors forever. -- Coin Database
- Coin Dealer Ethics - Name Your Price?
- Coin Dealer Ethics - Who's on First?
- Coin Dealer Ethics - Elderly Lady With a Jar of Coins
- Coin Dealer Ethics - Shill Bidding for Safety
Comments
OK…now I see that I should have commented after I first finished reading this ethics column. A sense of ethics is a good thing to have and works quite well with a clean conscience. However I see the possibility of your’s being slightly overactive. Do you not consider that the people selling coins at the show are well aware of the current silver prices and know they’re business as well as you do? If you were my wife you would drive me crazy with that stuff! I would for sure want to get to those people’s tables before you did! In my mind all is fair at the shows where the dealers have set the prices on the coins, and believe it or not I possess a sense of ethics just like you do. For instance I have this 70 something year old neighbor across the street that mentioned she had a few Morgan and Peace dollars sitting around. Her name is Norma and there is no way in this world that I would take advantage of Norma if she wanted to sell me her old coins. I have another 80 something year old neighbor up the street that is a good friend and we hit the estate sales together and horse trade back and forth a little bit too. Jerry has 64 Morgan dollars that he has been trying to sell me for a couple of years now, but he wants too much for them. He has seen some of the prices I have paid for my Morgans and he thinks his are worth upwards of that just because they are Morgans. I told him “hey Jerry that’s not how it works.” He kinda has this idea in his head that I might be trying to get them for less than they are worth and so I have offered to bring the book down and sit with him and try to evaluate the coins. But my advice to him was to hang onto them because he may need them to buy groceries with before this is all over. And that’s a fact. But I think you see my point Susan…there is no amount of money in this world that I would cheat my cherished neighbors for, and that is the truth. But they aren’t coin dealers sitting at a table in a coin sales show and if they were I would expect them to have their coins priced at what they wanted to get for them. I’m assuming that the good deals you found were just a handful out of a whole table of lots of other coins that were priced at market value…so good grief Susan give me a break. It’s called finding a good deal! But I do want to thank you for the heads up on the foreign coins and the values to be had. I don’t think I have any in my collection but I may start scrounging for some and looking for under priced coins and hopefully getting there before you do!!! I have done all my buying off of ebay so far and now I have to go hitting some coin shows. It looks like they are better yet and I will always think of you if I find an underpriced coin and wonder “What would Susan do?”
Don
Portland, Oregon
Ever notice how the “born again” are just more religious. I think in some sense, Susan has just found “religion” or the moral equivalent of it after her rough start in life.
There is nothing wrong with being moral. I think she could have asked once and then let it be.
Who’s to say that these coins weren’t stolen, sold to the dealer as a bulk item, and the dealer was just pricing them to make a profit, not knowing what such a good deal he had made? Thieves frequently sell stolen coins for a fraction of their worth; maybe the dealer unknowingly marked up the coins to make a fair profit to him, and just didn’t consider bullion value.
Susan, if you felt guilty about the dealers prices you could have offered him more money for his coins.
Robert G.