10 Ways to Buy Coins: But Not All Are Smart|
July 27, 2011
This article is an excerpt from the 2012 U.S. Coin Digest, edited by David C. Harper.
Coin collecting is not a complicated concept. Collectors want to know what something is. They want to know what it is worth and they want to know how to buy one if it appeals to them. What could be simpler?
Coin Digest is compiled to tell readers the answers to the first two questions. This book helps identify the many coin issues of the United States and it will tell you what each coin is worth on the retail market in many states of preservation by the terms of the official American Numismatic Association grading system that uses a 1-70 scale in ranking quality. Coins that show no wear are at the top end in the Mint State grades MS-60 to MS-70.
It is the final question of how to buy something that will set the average collector off on a lifetime of acquisitions. It also sets off discussions among collectors as to whether there might be other ways of making purchases, or better ways.
Let’s look at 10 purchase methods and see what you think. Most are good. Some are not. Most collectors will use multiple methods to reach their goals.
1. Coin Shops
The first method of buying coins is to walk into a traditional coin shop and talk to the person behind the counter about what it is you are interested in purchasing.
That person would then direct you to a specific tray in the display case, a three-ring binder of coins in 2x2 holders, or a display of slabs (coins graded by a third-party grading firm and then encapsulated in plastic) that the business might have on hand. You might even get a kick out of going through their junk box from time to time, if they have one.
Shops generally have a good working inventory of the popularly collected coin series, but they cannot own everything. If you don’t see what you are looking for, you can ask about it. Sometimes they can get it for you. Sometimes they can’t.
But let’s say you find a few items you want to add to your collection. What then? How do you make a purchase?
Shops generally are the most retail oriented numismatic businesses. Prices are often marked and the purchase process is like checking out at the grocery store. However, depending on the size of the purchase, or whether you have become a regular customer, prices might be reduced a bit for you.
The advantages of buying at shops is that if you are near one, it is quick. You can see what you are buying and you get immediate satisfaction. You might also become a regular customer and that can provide you with valuable noncash benefits.
Knowledge is king in this hobby. The more you know, the better you get at buying right. If you become a regular shop customer, you open the door to many discussions with the owner/employees. These discussions can often be highly valuable educational tools. If a shop operator knows you are collecting a particular series, he very likely will not only sell you coins, but he will serve as a tutor so you can learn the ins and outs of specific sets. You want to know what “FBL” means? The shop owner can tell you all about full bell lines on the Liberty bell on the reverse of the Franklin half dollar.
You get the idea.
2. Coin Shows
Another way of making purchases is to attend a coin show. Most localities have at least one coin show a year. These range in size from 20 dealers in a VFW Hall to hundreds of dealers in a downtown convention center.
No matter the show’s size, the purpose is the same. The dealers who are paying for the privilege of sitting behind an 8-foot table would like to do business with you.
Coins are displayed in glass-topped display cases. You ask a dealer to show you things and he will do so. If you see something you like, know that prices are usually not marked.
You might say something like, “What can you do for me on this?”
The dealer will reply with a price. Because it is a show, some dickering is expected. But if you have never done business with the dealer before, keep your counterproposal reasonable. Valuable lasting relationships are made at coin shows because the larger ones offer the collector access to specialists in various coin series. If you like large cents, for example, you will be encountering a highly specialized community of collectors and dealers who will enrich your hobby experience.
You can find coins at flea markets and antique malls, but the people handling them often have no background in numismatics and may knowingly or unknowingly offer you coins. You have to learn your stuff to be able to spot the difference.
3. Online Auctions
Online auctions sites, such as eBay, are another popular way to buy coins. You can look at as few, or as many of the listed coins as you want and you can participate in the bidding. You can set up alerts for coins posted in your area of interest.
Some people get hooked on the process and enjoy sniping at the last second of bidding before a sale closes.
The advantage of online auctions is you might get a better price on the coin you are looking for. The disadvantage is you can’t see the coin, hold it closely and examine it. You must depend on the accuracy of the description and the quality of the posted images.
Not being able to see a coin first-hand brings up the necessity of return privileges. Don’t do business with someone who won’t let you send a coin back. Even the best descriptions and photos might miss something that you consider important.
eBay has PayPal, which as a convenient payment mechanism also provides an important consumer protection. If a transaction does not go appropriately PayPal can retrieve payments from sellers and get your money back for you.
Online auctions have the benefit of being available to you from the comfort of your own home.
There are pitfalls, but with Coin Digest in your hands, you will likely not fall for sales that pop up from time to time of the rare 1804 dollar of which there are just 15 known. Naturally, the whereabouts of the 15 are known, so the seller is not likely to have a real one.
4. Traditional Auctions
Owners of the great rarities are likely to sell them by the traditional auction method. These bring the highest prices of any sales method on average for top quality coins.
Traditional auctions where buyers gather in a ballroom to bid on lots are still quite popular for this reason, though all but the smallest usually have an online component.
For bidders in the room, it is expected that you have examined the lots beforehand during the lot viewing hours and any bids you then win generally are not refundable. However, if you bid online and you did not see anything more than a lot description, you will have a return privilege.
Traditional auctions are conducted by the very largest numismatic firms to the very smallest estate sales.
5. Mail Order
Advertisements in newspapers and magazines are another way to buy coins. Care must be taken. Compare grades in the description with those in this book. Compare prices.
If nonstandard grading terminology is employed in an advertisement, say brilliant uncirculated instead of MS-63, you might want to keep up your guard. If prices of all listed coins are well below price guide prices, you might be on your guard as well. After all, if the retail market enables the dealer to get guide book prices, why would he be offering his coins for much less? In that case, something is likely wrong. The coin might not be what average collectors would presume it is supposed to be. It might be called a grade that is far higher than what it turns out to be.
To protect yourself, look for the return privilege in all ads. Buying a coin you cannot personally examine before the sale makes it extremely important that you can send it back if you are not satisfied when you get the chance to examine it closely.
There are specialty coin publications like the weekly Numismatic News hobby newspaper that make the process of buying by mail easier, but even here it is important to assure yourself of a return privilege before sending in your money.
All terms usually are spelled out. The ads will tell you what the postage and handling charges are, what a minimum order size needs to be if any, how coins are graded, the details of the return privilege, sales tax applicability and what forms of payment are accepted. It is expected that coins must stay in the holders in which they were sent to you in order to get a refund.
The ad will also tell you where to send mail orders, or what number to telephone to reach the firm.
6. Online Retail Advertisements
Online versions of ads have links to coin retailing Web sites that should also spell out sales terms just like an ad in a newspaper. Treat them as you would a newspaper or magazine ad. Look for the sales terms before you do anything else.
Purchases can be completed online, but depending on your payment method, it doesn’t hurt to see if the firm is part of the regular numismatic industry, or is actually operated by someone hiding in Kazakhstan.
The Web site for Numismatic News is www.numismaticnews.com. It is a good portal to learn about coins in the online numismatic world.
7. TV Coin Shows
Another way of buying coins, especially if you like to stay up into the wee hours of the morning, is through television coin programs.
Watch yourself here. The sales pitches are so perfectly made that you can hardly contain your excitement and you will want to telephone the number immediately to get your very rare and unusual coin that will only be available for the next half hour at a very special price.
If you are going to buy through programs like this, keep Coin Digest handy and see how the TV price compares to the retail prices listed in the book.
If you discover that the TV prices are higher, you will at least be aware that there are cheaper coins available elsewhere, but you will just have to wait until you can go online, or to a coin show to get those better deals.
Sometimes higher prices are justified. It is up to you to make that determination. TV time is costly. The coins they are selling might be hard to find otherwise. Know your alternatives before you pick up the phone.
8. Phone Solicitations
Sometimes the telephone can be your enemy. If you get a telephone call out of the blue and the caller wants to sell you coins, hang up. Don’t talk. Hang up. Telephone solicitations that you haven’t asked for are dangerous to the health of your checkbook balance. The caller could just as easily be trying to sell you oil leases in Patagonia. The sales pressure starts immediately and the end result of any purchase is not usually good.
9. Coin Club Meetings
An old-fashioned way to buy coins is at a meeting of a local coin club. There are fewer clubs nowadays, but they are still out there. One of the primary aspects of club meetings is providing a time for members to trade coins among themselves.
Each club is different. Find out what their rules and habits are.
The learning aspect to the social occasions provided by clubs is invaluable. You also might find that you will become a better collector by learning what the other members can teach you for free.
Coin collectors love to share what they know. If you enjoy coins as much as they do, the benefits to you can be large.
10. The U.S. Mint
The final method to purchase coins is to go right to the United States Mint. It produces coins every year for use in your change and it sells collector versions of these coins directly to collectors.
Visit the Web site at www.usmint.gov to see what is available, or telephone (800) USA-MINT. Just remember that the Mint sells new coins for the most part. The older ones you have to find out there yourself.
Beware of firms that put the word “mint” in their title. There is only one official government mint in the United States. It operates minting facilities in Philadelphia, Pa., West Point, N.Y., Denver, Colo., and San Francisco, Calif. These minting plants do not sell coins directly to collectors, unless you happen to stop by the gift shops in Philadelphia and Denver.
Private firms with “mint” in their names might offer you something you want to buy, but don’t mistake them for the U.S. government. There is only one United States Mint and that is its formal name.
There is no great mystery to coin buying for Americans who have been raised on shopping. The process is the same, but the hunt for specific coins might take just a bit longer than the hunt for a new car.
What makes coin collecting so interesting is the challenge that it presents. Some coins are easy to find. Some are not so easy. Some are downright hard and you may only get one or two chances in your lifetime to buy them.
If you get out there and try the various coin buying methods, you will not only find out which methods suit you best, you will also find out how to recognize the difference between contrived rarity and when those very rare coins have genuinely come your way.
Get out there and get started.
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