By Louis Golino for CoinWeek ............
West Point set shipments
Last year when the Mint launched the 2012-S San Francisco two-coin American silver eagle set on a minted to demand basis, the fulfillment of orders took several months from the time sales ended in early July. That caused a lot of collectors to cancel their orders out of frustration with the shipping delays, and in many cases because buyers wanted to have sets that would be eligible for first strike and early release grading labels.
Unfortunately, it’s déjà vu all over again as far as the 2013-W West Point eagle sets. Once again many buyers are facing extended delays in the shipment of their orders even if they placed their order on the first day of sales, although orders have started to ship.
Reports that some major dealers received large shipments while smaller buyers had their anticipated shipment dates pushed back several times has increased anxiety among many individual buyers. One major dealer posted a photo on its web site last week that showed pallets of sets that had been delivered from the Mint.
On the PCGS discussion board and similar coin forums, collectors have been voicing their anger and annoyance at how slowly orders have been shipping and speculating about whether large dealers were getting special treatment.
Given that it was obvious this year’s sets would be very popular because of the new enhanced uncirculated coin, and that many sets were produced in advance of the start of sales, the shipping delays are hard to understand.
From what I have been able to determine, the facts do not support the notion that dealers are getting special treatment. Orders for these sets began shipping on June 19, and that included both dealers and collectors. By the end of last week an increasing number of individual buyers were reporting that their orders had shipped, though a large number of other buyers keep having their ship dates pushed back, in some cases to sometime in September.
In my case, I placed two orders on the first day of sales, May 9, one about 30 minutes into the start of sales, and the second one a couple hours later. My first order shipped on June 28 and will arrive this week. My second order now has an expected shipment date of July 19. Like other buyers I am going to see how the sets perform on the market during the coming weeks and decide whether or not to cancel the second order.
During the New Orleans ANA convention in early May, one buyer reportedly placed an order for 6,000 sets. That is believed to have been placed by a dealer and that company is probably one of the couple that received early fulfillment of their orders.
The Mint is committed to a first in, first served policy on order fulfillment, as explained on the Mint’s web site: , yet the experience of many buyers of the West Point sets shows that this policy is not being followed as closely as it should be. A lot of people have reported, for example, that orders placed later during the sales window are actually shipping sooner than those they placed on the first day of sales.
It is widely believed that the Mint plans to issue more coins on a mint to demand basis. If so, the Mint will have to figure out a way to adhere more consistently to its first in, first served order fulfillment policy. It is also important for Mint officials to recognize that even when a one-month ordering window is used, many buyers and dealers will still order on the first day to ensure they receive coins that are first strike-eligible. That means a lot of stock should be made available early in the process to fulfill the large number of early orders.
Another consideration to bear in mind is that if it does turn out that many buyers cancel orders, whether due to frustration with shipping dates being pushed back repeatedly, or because of falling silver prices or other reasons, the final mintage for this set could be adjusted downward to a significant extent, as happened last year.
I suspect that those buyers who are patient and wait for the real market value of these coins to be determined, which could take several years, will be rewarded.
I will discuss the prospects for the secondary market value of these coins, including in particular 70-graded sets in a future column, after more information is available.
As of July 1st, 69.2% of West Point reverse proof eagles submitted to PCGS received a 70 grade, while 73.1% of the enhanced uncirculated eagles received the top grade. This appears to be an early corroboration of expectations that this year's sets would have more 70's, but the data is subject to change as more sets are graded. I do not yet have the NGC data.
PCGS cut-off date
Since the Mint began shipping the West Point sets on June 19, PCGS has established the cut-off date for first strike-eligible sets, which is July 19. Orders must either be received by PCGS by that date, or they must be sent in an unopened box with a postmark of no later than July 19.
NGC has not, as far as I know, announced the end-date for its early release period, but I expect it to also be July 19, which is one month from the date shipments began from the Mint.
Silver coins may be repriced
The fact that the U.S. Mint uses a much more nimble repricing system for gold and platinum coins than for silver products has been a key issue for buyers of U.S. coins this year as silver prices have declined sharply.
To reprice silver coins the Mint has to remove the coins from sale, usually for about two weeks, evaluate whether the change in spot prices justifies a change in retail coin prices, and then it has to publish the new prices in the Federal Register, which is where U.S. government regulations are published.
As a result of this system prices of silver coins have at several times in the past year been substantially higher than consumers believe they should be based on the decline in spot prices.
However, the Mint is trying to be more proactive within the constraints of the system in place.
Last week the Mint removed the launch date for the 2013 Great Basin five-ounce silver America the Beautiful coin that was slated to be released on June 27. The coin will be released after the Mint decides whether to reprice silver coins.
The current extreme volatility in silver prices once again shows why the Mint should move to a weekly repricing mechanism for this metal too. The chorus of buyers calling for it only grows louder every day, and silver prices are expected to remain very volatile for the foreseeable future.
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.