U.S. Mint's Direct Ship Program a Wild Success!
Friday July 4, 2008
On June 11, 2008, the U.S. Mint announced a new program meant to promote the circulation of Presidential Dollar coins. Customers could purchase the coins directly from the Mint at face value, in lots of $250 or $500 worth, with free shipping. Savvy collectors quickly jumped on this amazing offer, using their 3% to 5% cash-back credit cards to make the purchases, further lowering their costs. Although you couldn't select which Mint the coins came from, (they're all coming from Philadelphia according to reports I've heard and my own experience,) they do come in wrapped rolls similar to the ones the Mint sells at a substantial mark-up (but with a different paper wrapper on them.)
Following numerous reports from collectors that the coins were sold out, I contacted the U.S. Mint to find out how many Presidential Dollars were sold under the Direct Ship Program, and how quickly. Here is the statement I received from the U.S. Mint Office of Public Affairs:
The Circulating $1 Coin Direct Ship Program, which the United States Mint introduced on June 11, 2008, has experienced unexpected demand for the John Quincy Adams Presidential $1 Coin. In less than three weeks, the United States Mint has had to place the program in "sold out" status after more than 6,500 boxes or an estimated 1.6 million John Quincy Adams Presidential $1 Coins have been sold to date. The aim of the Direct Ship program is to facilitate the use of these coins for general circulation. The United States Mint is examining other options to make additional Presidential $1 coins available through the Direct Ship Program.
An estimated $1.6 million dollars worth of John Quincy Adams Dollars were snapped up during this sale! How many of those do you think will really enter circulation? How many were bought by coin dealers who used their cash-rebate credit cards, rather than going to their local banks? (After all, it's much more convenient to have the FedEx guy haul those heavy coins in, rather than having to do it yourself from the bank!) How many of these coins sold through the Direct Ship Program do you think were bought by collectors rather than merchants? According to the collectors and dealers I've interviewed about this, most of them searched the coins for errors and then took the majority of them to their local bank and cashed them in. A couple of dealers kept them for stock.
I hate to be the party-pooper here, but if the Mint's intention was to promote circulation of the $1 coins, I don't think this program, the way it is set up now, is the way to do that. I wholeheartedly applaud the Mint's efforts at trying new approaches, but the only thing that will promote circulation of these coins is to eliminate the paper $1 banknote.
However, there is a slight modification that the Mint could make to eliminate the abuse of this program by collectors and dealers. Just make sure the coins they send out are from mixed circulated returns! Neither collectors nor dealers want circulated coins, so the only people who would order them would be merchants and others who didn't care about the coins being in Mint State and from a particular president. To provide a disincentive to those buying primarily to garner the cash-back reward on their credit cards, add a small shipping and handling fee, or require e-checks and direct debits, rather than allow credit cards. I think this program has some potential, but the Mint needs to work some bugs out of it first.
Did you take advantage of the Direct Ship Program? What did you do with your coins? Are you circulating them, or did you just haul them all to the bank and cash them in? Share your experiences in the comments below.
Following numerous reports from collectors that the coins were sold out, I contacted the U.S. Mint to find out how many Presidential Dollars were sold under the Direct Ship Program, and how quickly. Here is the statement I received from the U.S. Mint Office of Public Affairs:
The Circulating $1 Coin Direct Ship Program, which the United States Mint introduced on June 11, 2008, has experienced unexpected demand for the John Quincy Adams Presidential $1 Coin. In less than three weeks, the United States Mint has had to place the program in "sold out" status after more than 6,500 boxes or an estimated 1.6 million John Quincy Adams Presidential $1 Coins have been sold to date. The aim of the Direct Ship program is to facilitate the use of these coins for general circulation. The United States Mint is examining other options to make additional Presidential $1 coins available through the Direct Ship Program.
An estimated $1.6 million dollars worth of John Quincy Adams Dollars were snapped up during this sale! How many of those do you think will really enter circulation? How many were bought by coin dealers who used their cash-rebate credit cards, rather than going to their local banks? (After all, it's much more convenient to have the FedEx guy haul those heavy coins in, rather than having to do it yourself from the bank!) How many of these coins sold through the Direct Ship Program do you think were bought by collectors rather than merchants? According to the collectors and dealers I've interviewed about this, most of them searched the coins for errors and then took the majority of them to their local bank and cashed them in. A couple of dealers kept them for stock.
I hate to be the party-pooper here, but if the Mint's intention was to promote circulation of the $1 coins, I don't think this program, the way it is set up now, is the way to do that. I wholeheartedly applaud the Mint's efforts at trying new approaches, but the only thing that will promote circulation of these coins is to eliminate the paper $1 banknote.
However, there is a slight modification that the Mint could make to eliminate the abuse of this program by collectors and dealers. Just make sure the coins they send out are from mixed circulated returns! Neither collectors nor dealers want circulated coins, so the only people who would order them would be merchants and others who didn't care about the coins being in Mint State and from a particular president. To provide a disincentive to those buying primarily to garner the cash-back reward on their credit cards, add a small shipping and handling fee, or require e-checks and direct debits, rather than allow credit cards. I think this program has some potential, but the Mint needs to work some bugs out of it first.
Did you take advantage of the Direct Ship Program? What did you do with your coins? Are you circulating them, or did you just haul them all to the bank and cash them in? Share your experiences in the comments below.
Comments
My order was backordered and expected to ship on July 15th, according to an e-mail on June 30th.
When they arrive, I’m planning to search them for errors and high grade specimens, and spend the rest. They work great in vending machines, self-checkout lines, and fareboxes.
I’ve been slowly dropping coins from my order into circulation. Of course, I did search for errors and high grades first.
This program has to be cutting into the US Mint’s bags and rolls program. I’m sure a portion of Direct Ship sales are collectors who would have been purchasing the more expensive bags and rolls.
They finally do something for the little guy instead of the greedy dealers and big money collectors and you have to go and try to ruin it. You have shown you don’t really have the small, individual collector in mind. The rich get richer and the poor get poorer thanks to the ingrained special interests. You’re just another shill for the big money interests. Thanks for nothing.
Tony L.,
I appreciate your taking the time to share your views. I realized that people might take my opinion this way, but the fact of the matter is that there is a lot of dealer abuse of the Mint and its programs going on. Not only does this hurt the average collector, it hurts the taxpayer, another group that we all belong to.
Dozens of coin dealers have told me about how they abuse the Mint’s systems, everything from placing and then cancelling (or returning) large orders depending on how well things sell, to picking the best coins out of Proof sets and then returning the rejects for someone else to end up with. Some dealers were actually gloating about how they bought thousands of dollars worth of these Direct Ship coins below face value (with their cash-back credit cards), searched them for errors, and then took them all to the bank to cash them in! One dealer comment I heard included remarks about “how much stupider is the Mint going to get?”
The Direct Ship program sold out quickly because of dealer abuse, not because of collector demand. In fact, the program was sold out before I even received the issues of Coin World that announced the new program! My post here wasn’t an attempt to get the Mint to stop the program, it was to make the program fair to everyone and to end the abuse.
Susan Headley
Coins Guide
I ordered my J Q A $s online, June 18, 2008. On June 19, 2008 I received ack.(backordered) exp.shipping date of July 3, 2008. Did not receive them. Again on July 3, 2008 I received another ack. exp. shipping date of July 18th. 2008. Received none yet.
I ordered the $250.00 box as soon as the program was announced. Although it hasn’t arrived yet, I fully expect it to. The mint has delivered everything I have ever ordered over the years, including the 3-coin 20th Anniversary 1-oz. Gold Eagles, even though I was on the post-sell-out “waiting list.”
Perhaps I’m in the minority, but when the dollars do arrive, I will put them ALL into circulation. I think the paper dollar has long outlived it’s usefulness.
I do not collect the presidential dollars in any form, –not uncirculated, rolls, nor proofs. They’re supremely trashy-looking coins (from this collector’s standpoint) and the ten-roll box is not worth the time to “search through” looking for errors, etc.
I wouldn’t pollute my collection with any of them. My favorite local coin dealer won’t even keep them in his shop (although, he will order them for any customers who pay upfront).
If these presidential dollar coins are going to circulate, it helps to be as ugly as these coins are. And, of course, the paper dollar need to be pulled.
If they don’t circulate, it won’t be because this citizen hasn’t done his part.
Ms. Headley,
Thank you for taking the time to specifically address my earlier comment. I see your point and understand your desire to address the abuse by the dealers and others who may thwart the intent of the Mint. I believe we share this goal and are actually on the same side now that I have reconsidered your position.
One thing that I think contributes to making the abuse by the dealers worthwhile is the high limit the mint has put on a single purchase, i.e., 500 coins or $500 worth. If the individual purchase were limited to say, for example, four rolls or $100 for any one individual or business, then there would be less of an incentive for dealers and the unscrupulous to abuse the program. At the very least, this would reduce the volume absorbed by a few abusive individuals. This would allow more individuals, such as myself, to get a couple rolls to put away for their kids and put the others into circulation.
In a somewhat related matter, the limits put on the Presidential Spouse coins also illustrates a problem with dealers and speculators. The very first coin in that series had a much higher limit on it than subsequent coins — five coins for the Washington spouse versus one coin for later spouse coins. As a result, the Martha Washington coins sold out early and few people were able to get even one coin. Later, the Mint instituted a limit of one coin so fewer dealers/speculators bought the coins as there wouldn’t be sufficient volume. Consequently, the most popular coin, the first in the series, was unobtainable at Mint cost for the individual collector such as myself while the subsequent coins were made less desireable as the individual could no longer get the complete set at a reasonable price without paying a dealer/speculator premium for the first coin in the series. In my opinion, the limit of one per person should have been instituted from the very beginning or left at five per person for subsequent issues. One thing I think the mint could do to correct this problem would be to reissue the coin with another 40,000 (or fewer) of the Martha Washington coins so that individuals can fill out their sets. Of course, this whole series was negatively impacted by the rising price of gold which has made each subsequent coin more expensive than the first coin in the series. Once again, the dealers/speculators make out and the individual is dealt another negative blow. C’est la vie.
All the best to you and keep up the good work.
Tony L.
Im not rich by any means,nor am i greedy like the rich. I have had to scrimp
I will take my 500 coins (when they come), counterstamp them with one or two of the various counterstamps I currently use, and then spend or deposit them. I am not sure where they will end up (I suspect most end up back at the bank anyway), but I will get them out there, outside of their wrappers and in “spendable” condition.
I wonder about the collecting of any of the presidential coins in the first place. It seems to me that so many of the coins are minted that they will never be worth more than their face value. (At least, not for a hundred years or so–by which time current collectors will receive no benefit from such appreciation.)
I ordered and received 250.00 of the coins. I was glad to get them and also receive a discount on my credit card. I have asked the bank for rolls when I go by but can ususally only get a roll once every 5-6 times I go by because they are “out” . I check the coins briefly for errors (how many am I looking for?) and then spend them. I always leave them for tips on meals and it seems they are excited to get them. It may take a while to go through the 250 !
They went directly into circulation. I use them in the office snack room, and whenever I drop on in the change box, they are scooped up within minutes. Store and restaurant cashiers take their wallets out and “buy” them whenever I put them on the counter. Americans want them, but it just hasn’t hit mainstream yet.
The paper dollar (and penny for that matter) need to go the way of the Dodo and I applaud the Mint’s grassroots approach to encouraging the circulation of dollar coins. Despite collectors’ abuses, I will continue to do what is best for the American taxpayer and do my part to promote the dollar coin.
Hi! Ms Headley, well I guess the program is really being abused now. On ebay you can find these rolls of coins being sold for $35 and up with free shipping on all the Presidents and Sacagawea’s to poor unsuspecting buyers. Your idea of rolls of mixed circulated coins is a great idea and would stop the greed of these dishonest people.
Please if you can publish an article on this.
C Hunter