The Coin Analyst: Don’t Let Frustrating Coin Buying Experiences Cloud Your Judgment
by Louis Golino for CoinWeek ……
Coin collectors tend to have strong views, especially about the mints and coin dealers with whom they do business. After a bad or frustrating experience, they will often decide not to any more business with that particular company or mint. In certain cases that is perfectly understandable. But unless it was a really major problem, like not receiving what you paid for, or a long delay that seems to totally lack justification, it may ultimately prove to be counter-productive to react that way in some cases.
Like other collectors, I am not shy about making sure I receive what I ordered and at a fair price. If I feel there is a problem, I will contact the company or mint in question and see what they can do to resolve the matter. Like others I have periodically had to return coins to dealers that were overgraded, cleaned, or had other problems. Eventually, most collectors figure out which dealers and companies are best suited to their needs, and it is normal to encounter some minor glitches, especially if you are a very active buyer.
But there seem to be a lot of coin buyers who will decide to boycott the U.S. Mint because, for example, they think the Mint makes too many numismatic issues in a year, they are not pleased with the way it handles distribution of limited edition coins, or because the cost of acquiring one of every coin issued in a year is beyond the budget of most collectors.
And some collectors seem to prefer to just vent and complain rather than take action when there is a problem. Some coin dealers that are distributors for foreign mints periodically have to delay shipments because they are waiting for coins to arrive from another country, or because the mint in question is backlogged with production. But rather than contact the company and ask when they expect to be able to ship their order, some people will use the delay as a reason for ending their business with that seller and not even try to work it out.
When it comes to the U.S. and foreign mints, as well authorized distributors for those mints, I mostly have had very positive experiences. And there are many American and foreign dealers I have dealt with that provide exceptional service, quality coins, and fair prices.
But back in 2008, I fell into a trap that I think other collectors also sometimes fall into. After a frustrating experience or two, I decided to skip some of the best numismatic offerings of the U.S. Mint that year, and as a result I almost missed out on some of the lowest mintage modern U.S. coins ever issued.
In 2008, as the economy headed towards collapse, precious metal prices were especially volatile. The U.S. Mint had not yet developed the weekly pricing system it currently uses for numismatic issues with precious metal content. That meant that it had to remove the coins from sale several times during the year for an extended period, and then the coins were relisted at new, lower prices.
The most glaring instance of this concerned the 2008 platinum proof and burnished coins. Platinum declined in price dramatically over the course of the year, and towards the end of the year, the Mint repriced those platinum coins at significantly lower prices than they were sold for earlier in the year.
At the time the Mint had a 30-day return policy, and many buyers of the platinum coins returned what they bought at higher prices, and then re-ordered at the new lower prices. In fact, I did just that. But somehow I was billed twice for the new order, and I was still waiting for my refund on the returned coins. The Mint employees I dealt rectified the situation after a couple of stressful days.
I remember well how throughout the course of 2008 I found myself becoming annoyed with the frequent repricing of gold and platinum coins. I also felt the Mint was issuing too many different coins at the time. Mint officials apparently agreed with that view since they decided to stop producing certain popular numismatic products at the end of the year.
The most important change from my perspective was the discontinuation of fractional (smaller than one ounce) burnished and proof gold and platinum American eagles and the fractional Buffalo gold coins. As it turned out, all the repricing, and economic pressures that many collectors faced, which forced many to sell coins to pay their bills, helped to create a situation that produced some of the lowest mintage gold and platinum eagles ever issued by the U.S. Mint, and many key date coins in those series that remain the keys today. And those fractional Buffalos continue to be one of the most popular modern coin series.
A lot of collectors were frustrated by the decision to stop issuing those fractional coins since so many of them simply can’t afford the one ounce gold and platinum coins that are popular with more wealthy collectors. They believed that if the Mint had to tighten up its product lines, it made more sense to stop making the ounce coins, not the fractionals. But the Mint’s sales reports year after year have shown that the one ounce coins, despite the high price tag, continue to be very popular with buyers, especially the $50 American gold eagle proof coins.
These perspectives and frustrations, which thousands of other collectors shared, led me to curtail my purchases from the Mint, despite the fact that precious metal prices declined sharply towards the end of 2008, as our economy was tanking. For example, gold fell to less than $800 an ounce, and platinum was at the same level.
The low mintages and the lower precious metal prices created a unique opportunity for collectors and buyers of U.S. Mint numismatic products. But rather than taking advantage of that situation to the extent my finances would allow, I told myself I would skip many of these offerings and “teach the Mint a lesson.” Fortunately, I came to my senses after some time and picked up what I could afford from the Mint and some trusted coin sellers before the values for these coins started skyrocketing. In the end, it was I who learned a lesson.
More recently, after the U.S. Mint ended sales of the 2012 San Francisco two-coin proof sets on July 5, it unveiled a new product that includes the 2012-S proof eagle that is also in the sets. The announcement of the Making American Coin and Currency set, which also includes a $5 bill with a serial number starting with 150 to honor the 150th anniversary of the Bureau of Printing and Engraving, resulted in a barrage of harsh criticism about the new product.
Many collectors felt that the Mint should have advised buyers of the set in advance since the Mint has indicated it had always planned to release the coin and currency set. I think that is true, and I too was initially skeptical, but after giving it more thought and examining the item, my view changed. I think it’s actually an attractive and well packaged set with good potential for long-term secondary market appreciation, depending on whether or not the Mint keeps issuing “S”-mint proof eagles, even if it probably would have made more sense to honor the Philadelphia Mint’s 220th anniversary with a coin from that city instead of San Francisco.
With a maximum mintage of between 50-100,000 for the coin and currency sets, a number unlikely to be reached by actual sales, the final mintage of the 2012-S proof eagle should be somewhere in the neighborhood of 300,000, including the roughly 250,000 in the two-coin sets. That would make it the lowest mintage proof eagle after the very special 1995-W, a $3,000 or more coin beyond the reach of most silver eagle collectors, and substantially below the next lowest mintage poof silver eagle, the 1994-P proof eagle with a mintage of a little over 372,168. And the 2012-S mintage could well come in lower than 300K if lots of people cancel their orders for the San Francisco sets, as they have said they plan to, because they were so annoyed by the coin and currency set. All this would stillbe true even if the Mint somehow managed to sell the maximum set mintage, and no one cancelled their San Francisco set order, neither of which is likely.
Certainly those who don’t like the sets should not purchase them, but a lot of the criticism seemed overblown to me. What advantage is really gained (other than saving some money you are not spending) by cancelling an order for a set you want (the San Francisco set) because you are angry about a coin and currency set about which you feel you deserved advance notice?
The moral of this story is it is a good idea not to let relatively minor issues with coin sellers, or your own views, prevent you from taking advantage of opportunities. You may regret it years later.
Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.