By February 22, 2012 35 Comments Read More →

ModernCoinMart Responds to “Troubling” Guest Commentary

This is an open letter to the coin collecting and dealing community in response to a guest commentary by Richard Francis recently published by a major weekly coin publication entitled;

“Firms’s acquisition of 2011 sets, while legal, is troubling”

I am going to simply take the approach of answering allegations and presenting information one item at a time. Then I will make additional comments and observations, and finally I will point you to a thread on Collector’s Universe where you can read over 100 posts from a mix of mostly collectors but some full time dealers. I think it’s important that each reader gets multiple perspectives, not just mine.

  • Rules are rules, laws are laws and they are not always one in the same. The U.S. Mint establishes rules or guidelines for purchasing items from them. If you fail to comply your order will be identified and rejected. The “rule” in question here was a “five set per household” limit. We did not break this rule.
  • One common method of obtaining more than 5 sets is to set up many PO boxes and use many different credit cards. A single individual could end up with say 100 or more sets this way without too much difficulty. ModernCoinMart (MCM) did not do this.
  • Other methods involve soliciting entire businesses with 100’s of employees to have each employee buy the limit then sell to the pre-determined buyer.
  • Others have “friends and families” networks that routinely buy for them when the quantity desired exceeds the household limit. This is the most common method and I estimate it has been used by thousands (not hundreds) of U.S. Mint customers going back a decade or more but mostly starting with the 2006 20th anniversary coins.
  • Church groups are a popular network. Yes, you heard me right. Trusted members of various congregations of varying denominations are being used to pass along opportunities to their members.
  • Many Coin Clubs have organized efforts to buy items from the mint for various reasons and in some cases I am sure it allows others in the club to get more of something that is limited by household.
  • Dealers routinely use dealer only trading networks to buy items that are expected to sell well before the U.S. Mint actually begins selling them.
  • Some, including ModernCoinMart, contact their own customers via email and ask them if they would like to purchase the item (s) and then sell them to us at agreed upon terms. We’ve been doing it for about 5 or 6 years now and within the past year or two I estimate another dozen or so companies are using the same strategy. I’ve personally seen a half dozen or so offers to buy in my email boxes from dealers for products that have not yet been released. While some of the companies, like ModernCoinMart, offering to purchase coins by email actually have the buyers that want the sets (in most cases graded), there are others that are just looking to make a fast buck by “flipping” anything they can acquire.
  • With regard to the A25 25th Anniversary sets, our first offer was $60 per set over US Mint cost. We were not the first dealer out there making offers and this offer was about $10 higher as I recall. Every few days new buyers would come into the market and the offers were increasing. Almost immediately we were paying $100 over in response to competition. Before it was all over we had a paid a few people as high as $400 per set over cost. A market had developed for buying and selling these that could be accessed on FACTS, COINNET, and the CU BST just to name a few places.
  • By having others purchase for them, MCM is the actual customer thus far exceeding the limit set by the Mint”……Really? Says who? My customer is the buyer and I am buying from them. There is no other way to interpret this. It’s their funds used to purchase, their shipping address, their US Mint account and then they are reselling to us at a profit. It’s a purchase order generated by us from our customer, not the USM.
  • “Had they advertised their buy price after the sets sold out, I would have no problem with that”. Gee, thanks, and we did for months make offers to buy and sell even after the sell out. However, we live in a competitive world and like others have customers that want certain products. Our job is to get them, not to wait for a sell out and hope we don’t lose the customer that got the set from a dealer who was more aggressive.

I’ve had differences in opinion on a few occasions with this publication over the years and they always published the rebuttal. I’m not giving them the satisfaction of one this time because I do not want to help them sell papers and advertising at this point, in fact I refuse to name them here. Last year we spent $183,726.08 advertising with this publication. For that I do not expect an exemption in standard tenets of journalism involving separation of editorials and advertising, but I do expect due diligence and fairness in protecting my company’s reputation. That was completely omitted, and frankly, I am disgusted by the lack of professional courtesy and low standards applied  in publishing the “commentary”.

Allowing statements such as “I must question their moral compass” and describing our actions as “nothing short of greedy” in a targeted attack that names no other companies or individuals is reprehensible.

Shame on you for giving credibility to a minority viewpoint that is targeted and damaging to one of your best customers. Rest assured that while no one at your publication will be contacted by me to discuss this, we do plan on taking it to your parent company for a higher review.

This commentary was “packaged “as a “great concern to collectors” but was in actuality an attack against my company that a leading publication allowed to go to press. It was not general, it was very specific. It was not evenhanded in the slightest way. While targeted at ModernCoinMart,  the article  indirectly lumps all who had others sell A25 sets to them prior to having them in hand in the same ugly category described by the author.

Calling my company greedy and lacking a moral compass also places scores of others ranging from the largest coin dealer in the world, to hundreds of BST, eBay participants and corner coin shops, all in the author’s same ugly category These market participants are without a doubt mostly honest and do not deserve the brutal attack put forth by a publication that we would expect not to conduct themselves in support of a “loose canon” with a narrow minded viewpoint. Hundreds of others including many non-dealing collectors did not feel that they were doing anything wrong in pre-buying sets from others.
.
We were not the biggest name offering to buy A25 sets in advance by email. Further, I personally received about 5 or 6 emails to my personal email addresses from other companies doing exactly the same thing, and there were a dozen others on FACTS/CCE and CoinNet dealer networks. I do understand that we are high profile in moderns and that in itself makes us a target and yes I have considered that as well as the fact that as you grow professional jealousy and individuals with an axe to grind do abound by default. Being aware of this does not make it any easier knowing that at MCM we all go to work each day trying hard to to the right thing for each and every customer.

I believe we were the first to voluntarily start offering “bonus payments” to the loyal customers that kept their word and a deal in selling us sets at prices lower than we bought from others. Is this how a greedy company would conduct business?

Most of the feedback we got was extremely positive with regard to our offers to buy coins before they are released by the U.S. Mint. I would say less than 2 or 3% had anything negative to say at all but in one case I offered to sell an unhappy person a set at my cost ($360 at the time) and he refused on principal even though I was paying $505 on that very day.

Let’s shift focus a bit directly to the U.S. Mint (USM). It should be noted that our Mint is the only one I know of that does not work closely with dealers. Allow me to explain. Other than a bulk purchasing program that allows dealers a 4% discount on a few selected items, there is no benefit given to dealers. Unlike say General Motors that sells to its dealers, our Mint pretty much (excluding 4% on some items) bypasses dealers and sells direct to John Q Public. No other mint in the world does that (that I know of) without giving the dealer a 20% or more discount below the price the item is being sold at that Mint.

Our Mint does have an Authorized Purchaser program for super volume bullion dealers, and at last count I think there were less than a dozen of these in the world. That simply allows those dealers to obtain the bullion coins (not collector issue coins) at “Mint Cost” so they can add a very modest mark up.

My point is that other mints such as New Zealand Mint, Royal Canadian Mint, Perth Mint and more, recognize the need to allocate coins to dealers and allow them to make some money in the process. If our Mint would simply allocate a percentage of the mintage for EVERY new collectible item to authorized dealers we wouldn’t have to jump through hoops to get the coins for our customers. Excuse me, but isn’t this just common sense?

In closing, I want to say that we acted in a manner that is consistent with our commitment to have the latest products for our clients, and did nothing wrong in the way we acquired them, legally, ethically, or morally.

Some suggested that maybe I should just let this die on its own but when I feel unfairly attacked and real issues are being ignored I can’t roll over. I will also be sending an email to our 20,000 active customers in the next couple of days with a link to this response. Our clients and the community deserve to have the full picture and to decide the issues for themselves.

We encourage you to visit the Collector’s Universe Forum where a thread has been started on this topic. Understand that while I am a member, I do not personally know more than a few of the members (if any) personally that posted and had no influence at all in what they wrote on the subject.

http://forums.collectors.com/messageview.cfm?catid=26&threadid=847361

Best Regards,

John Maben
CEO, JMRC/ ModernCoinMart

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35 Comments on "ModernCoinMart Responds to “Troubling” Guest Commentary"

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  1. Louis Golino says:

    John,
    I sent the publication in question a guest commentary that makes many of the same points you did. We will see if it is published.

  2. AK says:

    John – Why are the MCM prices so high to begin with? That’s the real crime here.

  3. BERNARD NARCY says:

    I WON’T GO INTO A LOT OF DETAIL, BUT I WILL SAY THAT I SHARE JOHNS OPINION 100%.

  4. Kevin says:

    John,

    I previously was a personal coin advisor for a compnay that did many of the things you have mentioned in your article. While I enjoyed the coin sales business I did see much of what you discuss in your article, and much worse things. It led me to turn in my resignation. I only wish I could have worked for someone with your values. I have always been impressed by your prices, and know that I know more I am even more impressed. Good luck to you and your entire staff in 2012, and the years to come!

  5. Chris says:

    I have purchased several items from MCM and NEVER had an issue.. Keep up the good work guys and I will stay a valued customer! :)

  6. Mark Scaff says:

    Why didn’t I receive an offer to purchase 5 of these sets, and then re sell at a profit?

  7. James Ryan says:

    I am a collector. I find no fault with what you did. I would like to know, however, what HSN and Coin Vault did to get their coins. I will still do business with you.

  8. John Maben says:

    Hi Louis,
    We’ll see. I spoke to the president of the parent publisher today. He knows what it will take to make this right in my mind. We sent out an email to our customers a little while ago and the mailbox is, without exaggeration, on fire with supportive replies.
    John

  9. Norm says:

    What are the legallities in opening all packages and pre-selecting the best coins for certification, then reselling the unselected coins as originally packaged from the US Mint? When I placed an order for 25th Anniversary set from Modern Coin Mart I believed I would be receiving set in the Original Package With the original coins delivered from the US Mint. To my great disappointment I was shocked when I discovered the coins individually packaged in 5 plastic bags, each labelled with MC*M stickers.

    • John Maben says:

      We (MCM) did not sell any A25 sets to our retail customers packaged from the mint, zero. We took sets from open boxes of 5 as they came in and filled orders from them for raw sets. The plastic bags were simply an added layer of protection. All OGP was included. Further, not a single raw set we bought was cherry picked before being sold to a retail customer.
      Hope that clears this up, thanks.
      John

  10. Gary Scallorn says:

    I don’t think you done any thing wrong!!! Just being smart business man.I think the USMint is at fault by not making enough
    to go around to all dealers,(at a cheaper price)& charge me & John
    Q-Public a higher price.You are making a living selling coin’s &
    ect.I am a collector of the one’s I can afford.There’s nothing
    wrong with this picture!!! Their mad because they didn’t think
    of it first!!!! I will continue to buy from MCM because of your
    pricing & friendliness!!!! That’s it!!!! Gary Scallorn,Nashville Tn.

  11. Gary Gullickson says:

    Can’t we all just get along! I can only speak from “MY” dealing with MCM. I found them fair, honest, caring, and a true pleasure. There are those we can never please. No matter how hard we try. Matters can be worked out, out of the public eye. Good luck to all involved. Now, let’s take 2 salt tablets and move out. It’s a Nam thing.

  12. Bruce says:

    Mr. Maben. I see nothing wrong with what your company did. Many other coin networks have done the same. I sold some sets on ebay and had some idiot blast me, and this subject never even bidded on my items. His verbal was almost the same as the original posts that condemned MCM. Mr. Maben, I will be happy to forward you this subjects email to me, if it will help you uncover the name of the gutless subjects who posted their commentary. Bruce out..

  13. John says:

    John,

    Sorry to hear about this attack on your company. I have enjoyed buying & selling with you guys over the past year. You guys are very professional and offer great buy/sell prices.

    I have read many complaints on web in regards to the 25th ASE Sets and think that targeting you guys (any anybody else that bought directly from the public) is unfair. Even targeting the mint is kind of unfair.

  14. Mike Vaught says:

    I was one of many that sold my sets to MCM and was glad to help my favorite coin shop. They have always done me right so I was happy to help my hometown coinshop out. I’m retired and am just barely making it, financially, and if I need a favor maybe MCM would help me. Our country needs more people helping each other instead of hurting each other.

  15. Dan says:

    The problem with anything like these sets is lots of people get the gimme’s. They see dollar signs immediately. Before anyone just out right attacks MCM or Maben should consider this…There were about 50 ebay sellers who listed WAY MORE than 5 sets. Where is the attack on these flippers? Where is the attack on the other national dealers? I personally in addition to MCM’s offer had two other offers emailed just the same way and within 2 weeks of each other. I personally think that MCM did nothing wrong but I also think the mint should just stop making anything even remotely like this. The mint was unhappy with the bullion distributers over the 5oz coins, now Francis and Coin World are upset over the 25th annv. sets. Seeing how no one can get along over these specialty coins and seeing how no one is 100% happy over these specialty coin programs then maybe the mint should just stop making them.

  16. donald hustad says:

    In my opinion sir , I commend you for your article. As I see it is providing a service for your customers and a approved method of obtaining coins. I fully stand behind your artical as a honest method of doing business.

  17. Concrete John says:

    I really don’t see anything wrong with MCM buying from customers what is really up setting to me is I tried all that day to get a 25th anniversary set but never got through and I can bet that the dealers that did get these sets are not selling these set at a small increase over their cost which has prohibited me from purchasing a set that I really wanted to get. In some ways I do blame the mint I have been a loyal customer and I think that long time buyers should be given some consideration in these types of situations. Just my two cents worth this type of buying will not stop if the mint continues to do business like is has done for years.

  18. Jake Jacobson says:

    John,
    You are correct in you feelings of unfairness for the reasons you specified. Every subject and person is entitled to a defense and this was more like being hung out to dry. I do not think that the overwhelmingly right minded individual will change their mind because of the comments and few will agree with the negative remarks. It is just the ramblings of the bitter elderly spouting off. I think the days of having your back protected for reasons of fairness is also a thing of the past. Try not to lets this get to you, your customers know the truth and friends and family and neighbors know the way you conduct business. A reputation stands on its own!

    Jake

  19. Mike Vaught says:

    I was one of many that sold MCM my sets of the 25th annual silver dollar set. MCM has over the years been honest and reliable to me and has gone above and beyond to make sure what I ordered was correct. I made the decision to sell my sets to MCM. I’m a retired grandfather, just barely making it financially, trying to instill,to my family to help those in need, not hurt each other. If MCM would need my help again I would not hesitate to help them. I’m sure if I needed help from MCM, they would do the same for me. Plain and simple, let’s help those in need, not hurt them.

  20. Bubba says:

    Just because other people are doing the same thing doesn’t make it right. A lot of collectors were shut out from buying at issue price as a result of companies offering people who may not care about coins to make a profit by buying up to 5 sets. I think it is an ethics issue. It may not be against the rules, but is it fair to collectors? My guess is the people making money on this are ok with it and the people that couldn’t buy a set at issue price have a problem with it. I think the Mint needs to look at this and figure out ways to make things more equitable for collectors. Maybe they could serial number the sets
    and track them to get an idea of what is happening with the sets after they leave the mint to better understand what is going on.
    They could make coins like firearms and have people register sales with unregistered sets being subject to confiscation.
    If people don’t want to play fair make them.

  21. Les says:

    Hey John, I liked your email/ message, and totaly agree. People are just mad that they didn’t do the same. I have been a regular customer to you as well as others. This is certainly an interesting hobby, and a tricky one as well. You can look forward to more orders from me as my funds allow.
    Respfully Les-n-Tn.

  22. Walt says:

    This so called “guest commentary” highly disgusts me, not only as a dealer, but as a coin enthusiast as well. MCM and John Maben have always; in my humble opinion of course, set the bar very high when it comes to ethical standards within the numismatic industry. This joker’s ignorant attacks on MCM’s reputation seems to be a shameless self-marketing tactic to try, and I do stress try, to improve his own self-image within the industry.

    Attacking a company, especially one of high ethical values like MCM, for making a MARKET, just shows how ignorant this “guest commentator” really is . Shame on the publication that allowed this filth to be published knowing full well that both John Maben and Modern Coin Mart have been major assets to this industry and have supported this industry for countless years.

  23. BILL says:

    I HAVE BOUGHT AND SOLD COINS FROM MCM OVER THE YEARS. I DON’T THINK I COULD FIND A BETTER RUN COMPANY. I ALWAYS FEEL LIKE I GET A FAIR SHAKE. I ALWAYS FEEL SECURE DOING BUSINESS WITH THEM. I SOLD THEM TWO UNCIRCULATED SETS OF 2008 BUFFALO’S OVER A YEAR AGO. I FELT LIKE I GOT THE BETTER END OF THAT DEAL. I RECEIVED THEIR EMAIL OFFERING TO BUY ANY AND ALL 25 ANNIVERSARY SETS I WAS WILLING TO SELL THEM. I FORWARDED THEIR EMAIL TO ALL MY FRIENDS SO THEY TOO COULD “CASH IN” ON MCM OFFER. THE ONLY REASON I DIDN’T SELL THEM ANY, I DIDN’T GET ANY. TELL ALL THE CRY BABYS TO CHECK OUT HOW HSN GOT ALL THEIRS. THIS IS AMERICA LAND OF OPPORTUNITY. THANKS JOHN, FOR ALL YOU DO FOR THE COIN COLLECTORS OF AMERICA!!!!!

  24. Clair Hardesty says:

    As far as I can tell companies like MCM did absolutely nothing wrong and operated in a completely and ethical manner. Those individuals that did things like set up multiple addresses, used many CCs, possibly under different names, clearly violated the mint terms of sale in a very fraudulent manner. MCM and others, both businesses and individuals, did not act in this manner at all. They did not offer to buy the sets FOR people, they only offered to buy sets FROM them, a perfectly legitimate way of doing business. While I am concerned that once the mint upgrades their ordering system later this year that programmed buyers will be able to cause sell outs of limited offerings in minutes instead of hours, there is no evidence as far as I know that indicates that MCM has engaged in programmed buying or intends to.

  25. Bruce says:

    I have read and re-read the above posts. All seem intelligent, except for one. Bubba. Let’s look at life for a moment, your parents should have told you that life isn’t always FAIR. Since you chose to use the FAIR word, It sounds like some little feller didn’t get a set. Could it be, you were asleep at the helm and let the sale pass you by, or maybe you didn’t have the money to make the initial purchase. Whatever the reason is, you poor little bubba self didn’t get a set. But, the real sin is that that OUR government (Mint) must have figured that this would be a monumental issue with all the collectors in the world. Yet, those chose to make too few. Be mad at the Mint. That is what created this. Had they made enough for all the Bubba’s in the world to have gotten one. then they wouldn’t be worth anything. Grow up. the sale is over, the sets are out there. IF you want one, the free market will sell you one. Man up and come off some of that Bubba money. I could go on with you Bubba, but I think you made your point and I bet others will think I made my point. The government does not need to be up in our business anymore than it already is. Gheez Everything they touch turns to ****** anyway. No one forced any A25 holder to sell their sets. Everyone sold them to make money. The mint made money, the original purchaser made money, MCM paid money, and every other single company that holds them is making money, I bought some, sold them, and when I decided to get one for myself to keep, I went out into the market and (like others) paid what the selling party was asking for a sealed set. But I made money, and I spent money. Bubba, you just didn’t get in on the phone line fast enough. There are still many sets out there for sell. Pay the current price or get a tissue to wipe the tears away.

  26. Gary says:

    THE MINT DID NOTHING WRONG PEOPLE…MCM did nothing wrong!!
    I have said this a million times people!! We dont need more worthless over minted products from the mint!! What is the point of collecting a coin which everyone in the world can have!! Its getting old hearing people say blame the mint!! The Mint knocked it out of the ballpark with the 25th Anniversary Set!! I hope they keep it up and stick with that 100k or less mintages!

    PS…Brittany Rocks!!

    • Bruce says:

      Gary, when I was carrying on with Mr. Bubba, and told him to blame the Mint. I didn’t mean that literally. I certainly know the Mint didn’t do anything wrong. But there are people that don’t think life is fair and they want to blame all the folks that either ended up with the sets or sold them for a higher profit, None of which I see is wrong. Like I said, he snoozed and he lost. That is why I said had they made more, they wouldn’t be worth what they are today.

  27. Steve says:

    Kind of reminds me of the Government & Wall Street. The Game is rigged so the top 10% make huge profits at the expense of the Average Joe, who gets screwed all the time.

  28. Scott says:

    The US Mint better never get in bed with these dealers? Its bad enough the dealers get all the bullion coins first and then mark up the prices….So all i can say to John is move to New Zealand if you dont like how the US Mint works!! I am not bashing you for the A25 sets, you did nothing wrong there! But to say the US Mint should allocate a percentage to you and other dealers is NOT common sense! Sure it would work out great for you and your profits but who else would it work out for? I see ZERO common sense in that statement!! You had me until that statement! Unfortunately that stupid comment will lose you more customers than the article that was printed in the coin publication! Sometimes less is more John…

    • John Maben says:

      Scott,
      It isn’t just New Zealand it’s the world as far as I can see except maybe China (not sure they may discount and allocate for dealers as well) and the U.S. Mint. Most mints sell their collectible coins to dealers at a discount allowing them to make money because they are their best customers who go out and sell and promote the products they make and place the largest orders. That’s the common sense part. I stand by this and think the mint is way behind the times in not having things set up this way and I have no intention of moving to NZ. (silly remark)
      John

  29. Louis Golino says:

    For anyone interested I have a guest commentary on this issue that was published today by Coin World.

  30. Syncerus Caffer says:

    If you don’t like the RULES, don’t play the game…… They are all a bunch of crooks….. ( on a par with VEGAS, if you know what I mean ).

  31. it’s business, modern coin mart emailed me asking if I would be interested in buying from the mint and resale them for a profit to them , HEY am not DUMB easy way to make money. I did’nt have enough notice to join the money train But am ready for the next offer to make a buck so let me know when. anybody could have done the samething that M.C.M. did and would have if they had the money to invest . one last thing they did not create fake names and addresses the people could have bought them and kept them

  32. Hello there, You have done an excellent job. I’ll certainly digg it and personally suggest to my friends. I am sure they will be benefited from this site.

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