I have heard plenty of horror stories from readers who took their coins to a local dealer to sell them. Sometimes the offers which are made are are so low as to be laughable; other times the dealer insults the customer by calling their collection "junk." If you collect error coins, there's a very good chance that your local dealer doesn't know much about them, and such dealers are about as likely to sell you fake error coin as they are to sell you a genuine minting error. Many local dealers aren't even coin specialists; they also deal in stamps, sports cards, bullion, and cheap "estate jewelry" (which is a fancy euphemism for pre-owned and/or pawned jewelry.)
Just this past weekend at the Chicago International Coin Fair (CICF) one of the local dealers there told me that when he buys collections, his offer price is based only on the coins in the collection that he feels he can easily resell. He gets the rest of the rest of collection free, so if he finds something worthwhile among that portion, it's a bonus. It is hearing about dealers like this that really gets my blood boiling. There is plenty of profit to be made in the coin business without being dishonest to people! And yet, this dishonesty is an unfortunate reality among the local coin dealers in many areas.
This is why I am a rabid advocate of only patronizing dealers who subscribe to a Code of Ethics. When I first took over this site, it had been my personal practice for many years to patronize only PNG certified coin dealers, especially when I bought investment quality coins. This is what I advocated early on because of my numerous bad experiences through 30 years of collecting coins.
The coin dealer community reached out to me and said, "It's really not fair to advocate only PNG dealers, because the PNG has really tough standards that most perfectly honest smaller dealers cannot meet," (such as minimum net worth requirements and years in the business.) "Also, most cities don't even have a PNG dealer. What are those collectors supposed to do?" So, after carefully considering their views, and doing some research into whether a defrauded customer really had any recourse from ANA member dealers, I have expanded my "find a dealer" pages to include ANA dealers. (The ANA is the American Numismatic Association, the nation's largest coin club.)
It is very important to have recourse should you discover that your purchases are not genuine, or are over-graded. It is very important for the person who is trying to sell a coin collection, and who isn't an expert in coins, to get honest appraisals and/or offers for his collection. It is very important that the coin dealer have enough experience and education to be able to offer you reliable advice about what to purchase for your collection, when asked. These are just a few of the things I explain in my article about how to find an honest coin dealer. I still strongly recommend checking the PNG dealer's directory first, and if you can't find someone local to you there, check out my article about things to think about when you want to find a local coin dealer.