Updated 4-3: What action should I take with respect to my client?

[MikeInFL]

Mike, in many cases AFTER I have sent a coin out on approval, I receive an inquiry or order for it from another client. In those cases, if the coin is tied up for too long, I risk losing a sale and having a frustrated and/or unhappy client. And personally, I would have a problem with a client shopping my coin around if it were at the possible expense of another client who wanted it for his collection.

 

And in the "real world", outside of coins, I don't know of many situations (on a % basis) where potential buyers have weeks in which to make a decision regarding an item that has been shipped to them.

 

Yeah, that's right, MikeInFl. Take that!

 

I'm surprised at your answer, Mike. You're an advanced collector with an advanced collection. Are you telling me that you must -foot around for a few days to make your mind up on a coin? That makes no sense at all unless you're just a slab man but I know better than that.

 

Once a coin is sold, payment should be made reasonably quick so that that incremental sale can be closed out and forgotten. 3 days is more than generous unless more time is requested for whatever reason.

 

And I'm the other one who wanted that coin! '53 A&R quarters with nice eye-appeal are few and far inbetween. I'm still hoping maybe I can get this coin.

 

First off, Mark makes a great point and one I hadn't considered before writing my response. Thank you Mark.

 

However, I disupte, to a certain extent the return privilege remarks. When you purchase something in a retail enviornment 30 day or longer return timeframes are the norm. While "on memo" makes things a bit more problematic (and thus my comment on time value of money) I think the parallel was a valid one.

 

That said, and to answer your question... I do often take several days to decide to keep a coin or not. Like Greg alludes to, I can generally rule out a coin instantly. However, I often take a day or three to communicate my decision to the dealer/seller in question. More often than not it is to make myself comfortable with the decision, and solicit opinions of others I respect...in general I'm a pretty measured guy and try not to make rash or quick decisions -- even moreso when it comes to my money and my collection...Mike

[braddick]

"Which real world are you talking about? To wit, what real-world situation outside (or inside) of the coin game dictate a decision without return privilege shorter than a few weeks?"

 

______________________

Mike, I don't know you well, but what I do know of you gives me pause when I read your statement.

Personally, I think you're better than that.

 

[MikeInFL]

Pat, Why? I don't follow. My statement and concern is heart-felt and (I thought) rational.

[braddick]

Mike, Possibly I read you wrong... I'm gathering though you believe it's ok- on memo- to tie up a Dealer's inventory for "a few weeks" while you shop the coin around?

 

I think that is patently unreasonable and truly unfair and is strongly taking advantage of the Dealer's good nature.

[MikeInFL]

Pat, I think you have read me wrong, but that doesn't make your concern less valid -- just less valid to my situation. Let me explain...

 

First off, I have never, and likely would never, shop around an on-memo coin to sell it. I don't buy coins to sell them, I don't view coins as way to profit, but rather I buy them because I want them for my collection. I'm not saying that's better or worse than anyone else; but that's the way I view coins.

 

That said, your point is a valid one -- but I'll fall back to my original response -- if the seller is comfortable with the price they sold it for, and comfortable with the terms under which it was sold, and both sides live up to their end of the deal, what's the issue? After all, if the seller's goal is profit, who is he to say that the same motivation on behalf of the buyer is "taking advantage" of anyone. To the contrary, it seems hypocritical to me...

 

Getting past the possible hypocrisy, in the event the seller feels like the buyer is taking advantage of the seller by shopping around the coin, I could forsee the seller not being responsive to future requests. But to me, a deal is a deal, and both sides should live up to it once consummated -- regardless of the intent of the buyer.

 

Respectfully....Mike

 

p.s. this sounds like a good issue for one of Mark's hypotheticals....

[EZ_E]

A deal is not concluded until both parties live up to their end of the bargain. Until the coin is bought and paid for, the deal is not closed.

[MikeInFL]

Ez E, I agree. Did I say something to suggest that is not the case, or were your comments more general in nature? Curiously yours...Mike

[braddick]

Mike, your clarification (or, at least my fresh understanding of your point) makes me nod my head in the affirmative. I agree with you.

 

Now, to throw another log on the fire:

What if a client "borrows" a coin (really, isn't that what 'on memo' truly means?) and sends it in express to a Service and it upgrades, purchases the coin, (and if it doesn't, simply returns it). Is that an ethics issue or simply a moral dilemma?

[MikeInFL]

Interesting question....

 

I'll give it some more thought this afternoon (gotta get back to work), but my initial reaction is that it is neither an ethics issue nor a moral dilemma -- provided the upgrade was done without cracking the slab and within the terms of the agreement between buyer and seller.

 

Again, a deal is a deal, regardless of intent provided it was entered into in good faith by both parties -- and I see nothing to suggest this is not the case in the situation you described....unless expectation of future profit/upgrade is not in good faith and I would argue for the reasons explained in prior posts above that it is.

 

Take care...Mike

[MarkFeld]

Mike, your clarification (or, at least my fresh understanding of your point) makes me nod my head in the affirmative. I agree with you.

 

Now, to throw another log on the fire:

What if a client "borrows" a coin (really, isn't that what 'on memo' truly means?) and sends it in express to a Service and it upgrades, purchases the coin, (and if it doesn't, simply returns it). Is that an ethics issue or simply a moral dilemma?

Pat, my personal view is that if the client does so without the advance permission of the coin's owner, he owns the coin, regardless of the outcome.

 

I have a few reasons for feeling that way: 1) There is no agreement or meeting of the minds with regard to the action being taken by the client; 2) The coin will typically end up in a different holder with a different grading label, a choice which belongs to the coin's owner, not the client; 3) The client is risking damage to the owner's coin.

 

This thread has morphed into some very good discussion on a number of different topics. (thumbs u

[gmarguli]

Pat, my personal view is that if the client does so without the advance permission of the coin's owner, he owns the coin, regardless of the outcome.

 

I have a few reasons for feeling that way: 1) There is no agreement or meeting of the minds with regard to the action being taken by the client; 2) The coin will typically end up in a different holder with a different grading label, a choice which belongs to the coin's owner, not the client; 3) The client is risking damage to the owner's coin.

 

Of course you would be violating the rules of the omnipotent ANA. You must give 10 days. In fact, you must give 30 days if the buyer informs you they are submitting it to a TPG. Note:

If a customer submits a misdescribed or overgraded coin to a certification service for authentication or grading and notifies me of such submission within ten (10) days of my date of mailing or other delivery, I will continue to recognize his/her return privilege for thirty (30) days after my customer’s receipt of said coin from me.

 

 

Also, the coin will only end up in a different holder if the coin crosses or the coin is sent to the same service for regarde. If I sent an NGC coin to PCGS for crossover, it remains in the same NGC slab unless it crosses.

 

I'm not sure where the risk of damage to the coin is. It is in the care of the TPG and they will compensate you if they damage your coin.

[MarkFeld]

If a customer submits a misdescribed or overgraded coin to a certification service for authentication or grading and notifies me of such submission within ten (10) days of my date of mailing or other delivery, I will continue to recognize his/her return privilege for thirty (30) days after my customer’s receipt of said coin from me.

Greg, I believe that language applies to uncertified coins, which I don't sell to non-dealers.

[TomB]

In no way am I attempting to do a pile-on toward Mike and neither am I attempting to skew Mark's thread, but I do have to address one or more things that Mike wrote about the return period of a coin.

 

The idea of putting inventory in limbo has already been addressed, but I find something else bothersome, too. Specifically, that it might be okay to shop a coin around during the return period and before the coin has been purchased is completely foreign to me. I believe this practice has the potential to do damage to the liquidity of the coin should it be returned to the dealer without having been purchased. Many people like to have "first shot" at special coins or to be able to buy "fresh" coins that have been off the market for a period of time. However, if one shops around a coin that one does not own then that fragile perception of "first shot" and/or of a "fresh" coin can be at least partially destroyed.

 

Let's say that a "fresh" coin is sent to a client to give the client "first shot" at the piece and the client then immediately turns around and uses his return period time to attempt to aggressively flip the coin. The coin might be physically walked around on the bourse of one or more shows and offered to dozens of dealers, it might have images of it sent to a handfull or more of collectors or it might even be listed on TeleTrade or ebay. All of these actions can destroy the idea of "fresh" or "first shot" if the coin is returned to the dealer and this can make the coin less liquid for the dealer. In this scenario the dealer might ship the coin out to a second client and might tell the client that the coin has just come out of an older collection and was only offered to one other person, which might be true as far as the dealer knows, but would not be true if the previous potential client was aggressively attempting to flip the coin.

 

Perhaps the second client had been offered the coin a few days prior by the first client or an intermediary dealer. Perhaps the markup asked on the coin in this situation was enormous. What does that do to the psychology of the collector who might now purchase the coin? Does the collector believe the dealer who always owned the coin lied? Doese the collector believe that the coin is not "fresh" and that it has changed hands many times? Does the collector believe that he is not getting "first shot" or thereabouts? Any of these assumptions or conclusions can damage the integrity of the dealer in the eyes of the second client or might serve to make the coin appear less desirable because it now appears as though it has been passed around like a hot potato and no one wants to keep it long-term. This can hurt the liquidity and/or price of the coin and therefore hurts the dealer who always owned the coin and did not shop the coin around outside of his dealer website.

 

In my opinion, anyone is free to shop a coin around for a flip as aggressively as they want once they own the coin.

 

As a personal anecdote, I was at the Baltimore show a few years ago and offered a wonderful coin to a dealer whom I had done business with a number of times over the years. He asked if he could have "five minutes" with the coin because he was busy and I told him I would walk around with other pieces and would give him that time. A few minutes later, as I walked the floor another dealer motioned me over and told me he had a fabulous coin for me. Guess what...it was my coin being offered at 50% more that I just offered it to another dealer! I told the dealer that I owned the coin and that there had been no "done deal" on it and went back to the first dealer and asked him about my coin without telling him what had just transpired. The first dealer asked for two minutes so he could get the coin back from a "buddy" that he wanted to look at it and then gave the coin to me. I later went back to the dealer who offered my coin to me at 50% over where I had offered to initially sell it and he declined to purchase it at my original price because "uncomfortable" that he would possibly be getting in the "middle" of an issue. Still later in the day I stopped by another dealer and offered the coin and this third dealer asked me if I had purchased it from the first dealer! I told him that there was never a deal with that dealer and found that it had been offered to this third dealer at a 100% markup. This third dealer also acted as though the coin were radioactive and wanted no part of a possible messy transaction. I don't know how many folks were offered my coin at a price above what I was looking for, but it did make my coin less liquid and that can hurt someone attempting to move a coin.

[gmarguli]

If a customer submits a misdescribed or overgraded coin to a certification service for authentication or grading and notifies me of such submission within ten (10) days of my date of mailing or other delivery, I will continue to recognize his/her return privilege for thirty (30) days after my customer’s receipt of said coin from me.

Greg, I believe that language applies to uncertified coins, which I don't sell to non-dealers.

 

The language is ambiguous at best.

 

Since grading is subjective, I can feel a certified coin is overgraded. Perhaps I want to submit it to CAC for their approval? I think the way the rules are written would allow me to do so. Just the same as if you sold me a SGS MS70 Morgan dollar. If I feel it is overgraded, I should have the right to submit it to a different service.

 

The ANA wording is written extremely poorly and is unrealistic. Perhaps more dealers would join and abide by their rules if the rules were clearer and more even for all parties involved?

 

[WinstonWare]

As a personal anecdote, I was at the Baltimore show a few years ago and offered a wonderful coin to a dealer whom I had done business with a number of times over the years. He asked if he could have "five minutes" with the coin because he was busy and I told him I would walk around with other pieces and would give him that time. A few minutes later, as I walked the floor another dealer motioned me over and told me he had a fabulous coin for me. Guess what...it was my coin being offered at 50% more that I just offered it to another dealer! I told the dealer that I owned the coin and that there had been no "done deal" on it and went back to the first dealer and asked him about my coin without telling him what had just transpired. The first dealer asked for two minutes so he could get the coin back from a "buddy" that he wanted to look at it and then gave the coin to me. I later went back to the dealer who offered my coin to me at 50% over where I had offered to initially sell it and he declined to purchase it at my original price because "uncomfortable" that he would possibly be getting in the "middle" of an issue. Still later in the day I stopped by another dealer and offered the coin and this third dealer asked me if I had purchased it from the first dealer! I told him that there was never a deal with that dealer and found that it had been offered to this third dealer at a 100% markup. This third dealer also acted as though the coin were radioactive and wanted no part of a possible messy transaction. I don't know how many folks were offered my coin at a price above what I was looking for, but it did make my coin less liquid and that can hurt someone attempting to move a coin.

 

That's terrible. I'm sorry to read that this happens and I'm sorry to hear that this happened to you....

[MarkFeld]

The ANA wording is written extremely poor and is unrealistic

Agreed, though I'd substitute "poorly" for "poor".

[gmarguli]

The ANA wording is written extremely poorly and is unrealistic

Agreed, though I'd substitute "poor" for "poorly".

 

[MarkFeld]

The ANA wording is written extremely poor and is unrealistic

Agreed, though I'd substitute "poor" for "poorly".

 

Drat - you made me look and confused me.

 

[MikeInFL]

Pat, my personal view is that if the client does so without the advance permission of the coin's owner, he owns the coin, regardless of the outcome.

 

I have a few reasons for feeling that way: 1) There is no agreement or meeting of the minds with regard to the action being taken by the client; 2) The coin will typically end up in a different holder with a different grading label, a choice which belongs to the coin's owner, not the client; 3) The client is risking damage to the owner's coin.

 

This thread has morphed into some very good discussion on a number of different topics. (thumbs u

 

Although your response was not to me, please allow me to respond... I disagree, kind of...

 

I would respond to your point #1 that there certainly was a meeting of the minds, and future actions of the buyer are not pertient unless specifically spelled out. To take your position to another level, if I'm not allowed to offer it for sale to someone else or offer it for grading, would it be considered not meeting of the minds if I ask someone else for their opinon on a coin? In other words, what expectations do you have for the buyer, particularly if they are not addressed directly? Said another way, why should the buyer watch out for the seller's best interest, particularly if it is not in the buyer's best interest to do so.

 

To your point #2.. If the coin is returned according to the timeframe and in the same holder as it was sold in, the seller has no recourse as I see it. If the coin comes back in a different holder (same grade, higher grade, lower grade) the the buyer would have violated the terms of the agreement (presumably there is a "returned in the same state as sold" clause), and I agree with you that the buyer has bought the coin for all intents and purposes at that point.

 

To your point #3. The buyer has already assumed liabliity for damage to the coin, and his handing off the coin to a third party (TPG) doesn't change that, it only exposes the buyer to additional risk.

 

In short, if the seller wants to protect himself from the eventuality that the coin would be upgraded or shopped around -- he should address those issues directly in the terms of his sales agreement. To not do so exposes the seller, in my opinion, and opens the buyer up to (what I believe) to be expectations beyond which they agreed to in good faith.

 

It is not often that I disagree with you, Mark, but I do in this case, and I do so with the utmost respect...Mike

 

 

[MikeInFL]

In my opinion, anyone is free to shop a coin around for a flip as aggressively as they want once they own the coin.

 

If that's the case, then why wouldn't you simply address that issue directly in the terms of your agreement, rather than set yourself up for failure, particularly understanding the cutthroat nature of the coin game?

 

[TomB]

In my opinion, anyone is free to shop a coin around for a flip as aggressively as they want once they own the coin.

 

If that's the case, then why wouldn't you simply address that issue directly in the terms of your agreement, rather than set yourself up for failure, particularly understanding the cutthroat nature of the coin game?

I already wrote something along those lines earlier in this thread when I wrote-

that most dealers do not write out their terms in a completely unambiguous manner.

However, one cannot always know the actions of others in real time and, even if one finds out that someone shopped the coin, what are the punitive damages and how are they calculated? Of course, if someone already believes they have a higher ethical standard or moral conduct than others then they might not have a problem with doing anything within any transaction that is not specifically prohibited.

[MikeInFL]

Tom,

 

Thank you for your response, and sharing your frightening and eye-opening experience!

 

I don't think relative ethics or morals come into play when you're dealing with a meeting of the minds, good faith negotiations, and a contract. After all, ethics and morals are not known, highly speculative, and applied even by the best of us situationally.

 

Said another way, if it is not prohibited in the contract, it is unreasonable to assume anything -- even moreso in the coin game where morals and ethics are a rare beast indeed.

 

I hate to keep repeating myself, but if there is a concern of shopping a coin around or having a coin upgraded -- one should address that issue directly in the terms of sale. As you have pointed out with your example, to not do so can be a mistake with future liquidity problems/salability as a result. And remember, (it is my understanding) the burden of ambiguous terms in an agreement are on the writer of said agreement -- in this case the seller.

 

Take care...Mike

[MarkFeld]

Pat, my personal view is that if the client does so without the advance permission of the coin's owner, he owns the coin, regardless of the outcome.

 

I have a few reasons for feeling that way: 1) There is no agreement or meeting of the minds with regard to the action being taken by the client; 2) The coin will typically end up in a different holder with a different grading label, a choice which belongs to the coin's owner, not the client; 3) The client is risking damage to the owner's coin.

 

This thread has morphed into some very good discussion on a number of different topics. (thumbs u

 

FWIW, I disagree -- kind of...

 

As for your rationale for the decision, I would respond to your point #1 that there certainly was a meeting of the minds, and future actions of the buyer are not pertient unless specifically spelled out.

 

To your point #2.. If the coin is returned according to the timeframe and in the same holder as it was sold in, the seller has no recourse as I see it. If the coin comes back in a different holder (same grade, higher grade, lower grade) the the buyer would have violated the terms of the agreement (presumably there is a "returned in the same state as sold" clause).

 

To your point #3. The buyer has already assumed liabliity for damage to the coin, and his handing off the coin to a third party (TPG) doesn't change that, it only exposes the buyer to additional risk.

 

In short, if the seller wants to protect himself from the eventuality that the coin would be upgraded or shopped around -- he should address those issues directly in the terms of his sales agreement. To not do so exposes the seller, in my opinion, and opens the buyer up to (what I believe) to be expectations beyond which they agreed to in good faith.

 

It is not often that I disagree with you, Mark, but I do in this case. Respectfully...Mike

 

Mike, to your point about my point #1 - I believe that a dealer who is asked to ship a coin on approval basis to a collector should be able able to do so under the reasonable belief that it is for the collector to buy for his collection or return. In the absence of a specific request by the client and agreement by the dealer, the client should not be shopping the coin around or having it re-graded, etc. The coin's owner shouldn't be forced to address/spell out all of the possible scenarios that aren't OK. But rather, the burden should be on the collector to ask about situations other than his buying or passing on the coin. And unless the customer does that, there is no such understanding, agreement or meeting of the minds.

 

With respect to your point about my point #3 - if the client mails the coin to another party and/or has it cracked out of a holder, he is exposing it to additional and unexpected risk, without permission from the coin's owner. In my opinion, that is improper.

 

I believe that you are unfairly placing the burdens on the wrong party.

 

[MikeInFL]

Mark,

 

What burden? The burden that the seller should have addressed in the terms and conditions of the sale? The burden of the seller's (unstated, and I would argue, unrealistic) expectations of the buyer? Specifically....

 

On #1 -- Obviously, the expectation that you're selling to a collector to only buy or return is not realistic given the example used, and I would argue in the coin game in general. While I, personally, would certainly live up to those expectations, that's not reality (or at least the reality I've seen).

 

Back to #3 -- The buyer is accepting the liability/possibility of damage already -- no different than handing it to his child to look at -- and the fact that there's additional or unexpected risk shouldn't come into play given that the buyer is already responsible. By way of example, should I not speed on my way home from the post office as to not expose the coin to additional risk, or should I do so with the knowledge that I do so at my own risk. To me the answer is clear....and very applicable to the hypothetical presented.

 

Back to the grindstone for me now, I'll check back in later this afternoon/evening....Mike

[MarkFeld]

On #1 -- Obviously, the expectation that you're selling to a collector to buy or return is not realistic given the example used, and I would argue in the coin game in general. While I, personally, would certainly live up to those expectations, that's not reality (or at least the reality I've seen).

I guess we will have to agree to disagree on this. I believe that my expectation IS realistic, based upon a combination of the experiences I have had over a period of many years, and what I believe to be the very small % of times such behavior occurs. The fact that we know it happens on occasion doesn't make my expectation unrealistic.

[MikeInFL]

Fair enough. One last try though....I don't give up easily.

 

But if we know it happens, even occasionally, shouldn't we do something to protect ourselves from it happening?

 

In short, it is prudent for the seller to protect himself from actions of the buyer, not to assume the best case and then take issue when his expectations are not met, and I'm rather surprised, frankly, that someone with the educational background you do disagrees...Mike

[WinstonWare]

You can’t flip a coin that someone sends you on approval Just seems to me like people will stop doing business with you after a bad situation (loss of liquidity or whatever) arises.

[CHABSENTIA]

Which was my point. You had an Emergency and I am glad to hear you are well.

 

You also mentioned that when you woke up that "your wife informed you.........."

 

I mentioned in my post that my wife, daughter or som would have taken care of things as far as a notification is concerned.

 

 

I don't think anybody here is suggesting that the prospective Buyer give an instant payment etc. The package was signed for on March 21.2008. That was 13 days ago and there hasn't even been the courtesy of keeping Mark up to date.

[CHABSENTIA]

I am sure you are correct. I just scanned the article until I can get more time. I did rememeber the name Campbell.I was mainly interested in the part of the article that told of the Coin Community respect fr the new director and I believe that it stated that this was the first time in its history that a person with a Dealers experience was elected.

 

 

Thanks

[MarkFeld]

Fair enough. One last try though....I don't give up easily.

 

But if we know it happens, even occasionally, shouldn't we do something to protect ourselves from it happening?

 

In short, it is prudent for the seller to protect himself from actions of the buyer, not to assume the best case and then take issue when his expectations are not met, and I'm rather surprised, frankly, that someone with the educational background you do disagrees...Mike

Mike, I thought you were headed out of here for a while? But since you're still here.....

 

With respect to protecting one's self - I think it depends upon how often the situation occurs, etc. I don't know of it ever having happened to me. If it did, I was obviously unaware of it, so it didn't cause any problems. Thus, for my own business, I see no need to complicate my terms of sale unnecessarily.

 

I'd like to think that the extremely small number of unanticipated problems/complications I have had over the years (which, granted, I might have been able to adequately address ahead of time) have been more than offset by the extra business I have done as a result of being easy to deal with. We're talking about trade-offs here, and I think each dealer should handle things in their own way, based on their views, preferred way of doing things, the type of customers they have, risks they are willing to take, etc.