My "Coin Dealer Ethics" column is easily one of the most popular features on my site. This column explores ethical issues related to the buying and selling of coins. I pose an ethical question or dilemma, or lay out an event I witnessed, and readers are asked what they think about the way the coin dealer handled the situation. Occasionally I cover topics other than transactions, but the columns are always related to the ethics involved in some aspect of coin collecting.
I watched a coin dealer about to rip off a little old lady at a local coin show and it made me heartsick. I intervened on her behalf, only to learn that I had violated the etiquette and unwritten "rules" of coin shows - that you don't interfere with someone else's transaction, no matter what. I got thrown out of the show as a result!
What should happen when a coin dealer buys a collection from a regular customer, at the price the customer asks for, and then he later finds an extremely valuable coin in the collection that the customer overlooked? Should the dealer pay the seller some additional money once he gets a chance to appraise the collection more fully, or is the matter a "done deal" no matter what?
A major coin dealer admitted that he has melted down thousands of recently-struck
First Spouse gold coins, plus significant numbers of other collectible coins. He does the melting to make a profit from the gold or silver
bullion the coins contain. Isn't it an outrage that someone who deals in coins for his livelihood should profit from destroying them?!
Counterfeit coins are a problem as old as coins themselves, but now counterfeiters are copying the
slabs, or coin-holders, that graded and authenticated coins are encased in. The two top
grading services,
PCGS and
NGC, have taken nearly opposite approaches to combating the problem. PCGS is withholding the details that allow collectors and dealers to authenticate their slabs, while NGC is making this information freely available. PCGS doesn't want to educate the criminals, but NGC figures it only takes one person to educate them anyway, why not empower us all to authenticate slabs for ourselves? What do you think about this thorny issue?
One coin seller thinks he has figured out a nifty way to maximize his eBay profits. Since many buyers don't like auctions that have a hidden
reserve price, and the seller is tired of "giving away" coins at the low opening bids, he solves the problem by having a friend
shill bid for him if the coin is about to close too low. In effect, he buys the coin back himself, and because he pays the eBay fees, he isn't doing anything wrong. Is he?
A coin dealer who makes a mistake in attributing an ancient coin discovers after the auction closes that the coin is worth closer to $1,200 than the $130 it sold for. The dealer claims to have "lost" the coin and refunds the high bidder's money. Several months later, the dealer puts the same coin up for auction again, properly attributed and with an opening bid of $1,000. Does the original buyer have any claim to the coin?
Among all the sleazy things that coin dealers have bragged to me about doing, the practice of cherrypicking Mint sets is one of the most pathetic. The way this works is that dealers order coin sets from the Mint, and then they open them to remove the best coins, replacing the ones that won't
grade 70 with lesser-quality rejects. Then they send all of the rejected coins back to the Mint for a refund or replacement. Since nothing is usually wrong with these coins (to the naked eye, anyway) the Mint just sells them to someone else, like you! Sometimes the rejects don't get sent back to the Mint, they get sold to unwitting collectors instead...
Ethics recipe: Combine one coin dealer with a bad attitude, a small box of low-value Morgan Dollars, and two customers who want to buy them. Mix well, separate, and be grateful you ended up with one coin, even though you got there first and had the box in your hand when the other customer arrived. Beware, this story has a nasty twist at the end!
We always expect coin dealers to be honest with us, and pay us fair prices for our coins when we sell them. Is this a two-way street? With the sharply rising bullion prices we saw in early 2008, I began encountering dealer stock that was more-or-less priced correctly, just out of date. What obligation (if any) does a customer have to be honest with dealers about coin pricing errors?
The sort of pick-box I am referring to is the kind where all of the items are the same price. The customer must hunt through the box (of mostly junk, usually,) and pay X amount per coin. But what should happen if the customer finds a valuable coin the dealer overlooked?
