Situation: Dealer selling circulated Proof as more expensive busines strike

[Prethen]

This situation happens very often probably in transactions every day and in many series. I'm most familiar with the 3CN series, so I'll provide a recent example.

 

A very well known dealer (I'll leave his name out as it's not germane to the story, but he is well respected among many collectors) sends my friend an 1885 3CN in XF40 and, of course, as the more expensive business strike. In circulated Proof the coin is probably worth no more than $400. As a real business strike the coin can fetch probably anywhere from $800-$1500++. There's only one book published for 3CN collectors to help determine if it's a business strike...the Allan Gifford 3CN book.

 

The Gifford book is able to determine which pair of dies was used for the striking, 1885P03/B05 (in his terminology). Now, the trick is to determine if it's a Proof or not. It's too circulated to do the typical observation of the rims and details. There's only one other item that can be truly measured which Gifford notes that he's seen on every Proof he's observed - the reverse is rotated 6 degrees CW. On every business strike he has seen the reverse is rotated 2 degrees CW.

 

We determine the coin has a 6 degree CW rotation of the reverse. My friend also notes, under high power magnification, what might be the remnants of a wire rim. This cannot be said to be a no-brainer business strike. In fact, I do believe it's a circulated Proof and it has to be sent back. My contention is that the intelligent marketplace will scrutinize the coin just as much and the buyer would be buried in it if they paid for it as a business strike.

 

The dealer feels if the coin smells and looks like a business strike then it must be one. I know he's not alone. I also know that not every dealer can take the time to be so specialized to understand every idiosyncrasy of coins like this.

 

Is the dealer wrong for selling this as a business strike...Is this just a case of buyer beware? Is it the responsibility of the buyer to alert the dealer as to what he knows? Too often, this will just off the dealer (I know, because I've tried) and they will revert to what they think it is based on its "look". And, of course, they can sell it for more (who cares if they bought it wrong).

 

And, by the way, the services get these coins wrong all the time. Their opinion often is based on looking at the coin for a few seconds and then assigning a grade. Sometimes they're right...sometimes they're wrong.

[shirohniichan]

Is the dealer wrong for selling this as a business strike...Is this just a case of buyer beware? Is it the responsibility of the buyer to alert the dealer as to what he knows? Too often, this will just *spoon* off the dealer (I know, because I've tried) and they will revert to what they think it is based on its "look". And, of course, they can sell it for more (who cares if they bought it wrong).

 

And, by the way, the services get these coins wrong all the time. Their opinion often is based on looking at the coin for a few seconds and then assigning a grade. Sometimes they're right...sometimes they're wrong.

 

If it's a coin with a big swing in rarity and price between a proof and a business strike, TPG's need to spend more than a couple of seconds to make the call.

 

I think the dealer is wrong if he regularly deals in 19th century US type coins. He has the responsibility to check the diagnostics if he's going to offer it as a scarce business strike instead of the more common proof. If he were a dealer in Sweden who didn't know of the series, for example, I'd cut him some slack.

 

I've seen the opposite case in which a dealer offered a polished 1876 II/II trade dollar as a proof. It's actually worth much more as a business strike, but few people know it (after all, it's an obscure variety). Most look at the price guides and see 1876 proofs have a higher value than business strikes.

[MarkFeld]

Bruce, it sounds as if "Dealer (MIGHT BE) selling circulated Proof as more expensive business strike".

 

Either way, unless the coin is unquestionably a business strike it's better to pass. I wonder if the dealer would be listing the coin as a business strike if Proofs were worth more, instead of less? In order to assess the method of a coin's manufacture objectively, value considerations should be set aside, if possible.

[Prethen]

Mark, I absolutely agree that the coin's value has no bearing on its attribution. HOWEVER, if it cannot be determined with a very high degree of certainty one way or the other, the value by DEFAULT should be the lesser of the two. The question really is, should the dealer take the responsibility to do this. It seems that you're implying "No"...it's up to the buyer to beware.

[MarkFeld]

Mark, I absolutely agree that the coin's value has no bearing on its attribution. HOWEVER, if it cannot be determined with a very high degree of certainty one way or the other, the value by DEFAULT should be the lesser of the two. The question really is, should the dealer take the responsibility to do this. It seems that you're implying "No"...it's up to the buyer to beware.

Bruce, I was implying no such thing. If the dealer is unsure, he should disclose that. And if he believes the coin to be a proof, but offers it as a business strike, he is worthy of scorn.

[Prethen]

Okay...I wholeheartedly agree. I have found that most dealers will do no such thing. They are not willing to admit ignorance and will simply sell it for what they "gut" tells them it is and don't want to hear any different from a collector.

 

The problem is, if he discloses that he's unsure, then it would follow that he really shouldn't be attempting to sell it as a coin that would sell for a multiple of it's possible true value.

 

It's a rare dealer (in my experience) to be that honest and fair with coins like this. I've seen this happen way too often.

 

I've recently went to a couple of local shows where I saw the same 1880 3CN in the case being sold as an MS64. The first time I saw it, I looked at the coin and I was 99% certain it was a Proof. I informed the dealer and even suggested that she check with one of the other dealers and/or an ex-grader who also roamed the floors. She basically ignored me and the next show, there was the coin on sale to some poor sucker as the more expensive business strike. I mentioned it again and she shrugged her shoulders.

[ziggy29]

Either way, unless the coin is unquestionably a business strike it's better to pass. I wonder if the dealer would be listing the coin as a business strike if Proofs were worth more, instead of less? In order to assess the method of a coin's manufacture objectively, value considerations should be set aside, if possible.

Agreed. As I wrote ATS, I would not pay business strike money for an 1884 or 1885 3CN below AU. At that point it's much harder to distinguish between proof and business strike; at higher grades you can compare rounded versus squared-off lettering and cartwheel luster versus mirrored fields.

 

A cleaned XF ANACS 1884 listed as a business strike is currently at a high bid of $920, including juice. Contrast that to a cleaned "AU details" 1884 proof in an NCS holder, which sold this weekend for about $210 including the juice on Teletrade. Once these get worn, how distinguishable are they? If I'm going to buy one of these below AU, might as well just buy an impaired Proof given the difference in price and the lack of differentiation between the two.

 

I do recall seeing a very respected dealer listing an XF 1885 3CN in the August 6 Coin World. I surmised that one sold before the issue even went to print, and I wonder if this was the coin in question...

 

[jesbroken]

The Gifford book is able to determine which pair of dies was used for the striking, 1885P03/B05 (in his terminology). Now, the trick is to determine if it's a Proof or not. It's too circulated to do the typical observation of the rims and details. There's only one other item that can be truly measured which Gifford notes that he's seen on every Proof he's observed - the reverse is rotated 6 degrees CW. On every business strike he has seen the reverse is rotated 2 degrees CW.

 

Is this Reverse rotation accepted across the hobby as undeniably proof vs. business strike verification? If it is, then no excuse for TPG's for missing this, and no excuse for seller to not know this if they are selling the coin as an expert seller of this type of coin. If the seller admits in his sales brochure that he is not an expert on this type of coin, then buyer beware when buying a greatly differentiated coin value between coin strike types.

IMHO, anytime a seller places on the market an object with a great value range, it is a burden placed on them to either advertise their knowledgeability or admit their lack of it-this then forewarns the buyer and the buyer will better understand their risk.