Junk Silver Offer -- Is this a normal offer???

[brg5658]

There is one small coin shop in the city where I live. Granted, we only have a population of around 100,000. Anyway, that's not my point here. I have been in this shop many times, and when I was new to the city about 8 years ago, I was a semi-frequent customer. I wasn't very serious about collecting then, so it was more of a curiosity to pick up well worn really old US coins.

 

I'll spare you all of the details, but in the past 2 years I have been there once. And, that was yesterday. I have a handful of junk silver Morgans, harshly cleaned and purchased from some of the coffee cans at coin show dealer tables. Most of them were had for $11-$15 a few years back.

 

My question is this: Is it normal for a dealer to offer $21 per Morgan Dollar, given a silver spot price of $42?

 

I almost laughed when he offered me that. The melt value is $33 or so. I was hoping he'd give me $30 per coin at the least. When I told him I thought he was offering me far too low he said "Ok, well, I have a coffee can full of them going to melt on Monday." How does the number you already have mean you can rip me off? Needless to say, this time I will not go back to his little "shop" ever again.

 

So my assessment: This guy is a Criminal preying on clueless desperate people. It's sad really. But, this is why I drive (like I am today) 80 miles to a coin show where at least some of the dealers are customer-service oriented and not trying to rip me off at every transaction.

[bartlesvilleok]

$21 might be too low however it is not like he is able to sale them. If he was able to sale them then he would not be sending them for scrap. The dealer is also not getting anywhere near melt price when he sends them in for scrap as someone has to melt them down. The dealer also has to pay the shipping and insurance on them.

 

$21 might be too low however $30 is only 10% under spot and the dealer that is sending them in is not getting close to that then out money for shipping. Buying them at $21 he might be making 15% but I would not think much more unless he had a TON he is sending in and the scrap dealer is making him a deal.

[mtnstyne]

I don't know about him being a criminal preying on clueless desperate people, but $21 does seem like a low offer. That being said, with melt value around $33 per coin I would hope to get somewhere in the 10-20% below melt for it to be worth his while ($26-$30 range).

 

I haven't tried to sell any here at my local B&M shops but I know I can walk in and buy at melt so I know they are paying less.

 

I wouldn't be too hard on the guy, he is just a businessman and if you don't like his offer you obviously don't have to take it. Good luck.

 

Anyone know what it costs to have stuff melted down?

 

 

 

 

[PerryHall]

Yup. Typical low ball offer from a B&M coin dealer.

[brg5658]

UPDATE: I took them to a coin show about 80 miles away from where I live and was given $28 each for the Morgans. This is more reasonable. I think $21/oz (40% below spot) for Morgans Dollars is excessively low.

 

I will also note, the guy here in town offered me $39/oz ($4 / oz LESS than spot) for 1oz ASE pristine coins from 2009 and 2010. They were just a couple, put in Air-tites direct from rolls. He has the same exact coins in his display case for $50 each. I took those with me to the show today also, and was paid spot ($42.90/oz) and was offered $1/oz OVER spot if I had a full roll.

 

Yes, I know there is overhead for B&M shops. But, the kind of behavior of my local coin shop guy certainly doesn't encourage anyone to do any business with him.

[mtnstyne]

Yes, I know there is overhead for B&M shops. But, the kind of behavior of my local coin shop guy certainly doesn't encourage anyone to do any business with him.

 

That's probably exactly why they are a rarity now in the day of the internet.

 

Glad you made a deal more to your liking!

[coinman_23885]

We have a guy like that around here who owns a brick and mortar shop. He is a complete joke, and no one takes him seriously. I have seen him charge 1.5x retail and buy at 50-60% below wholesale. I walked in to by supplies, and I couldn't help but laugh. I walked out and made an order with JP's Corner (?).

[thebeav]

So my assessment: This guy is a Criminal preying on clueless desperate people. It's sad really.

 

Sometimes some of you really amaze me.

 

Not once have any of the "accusers" on this board outed what they themselves do for a living. It would make it easier for the rest of us to point out what "criminals" you are in pursuit of collecting a paycheck.....

 

Do your business where you would like to do business. It's simple.

 

Paul

[brg5658]

So my assessment: This guy is a Criminal preying on clueless desperate people. It's sad really.

 

Sometimes some of you really amaze me.

 

Not once have any of the "accusers" on this board outed what they themselves do for a living. It would make it easier for the rest of us to point out what "criminals" you are in pursuit of collecting a paycheck.....

 

Do your business where you would like to do business. It's simple.

 

Paul

 

Disclaimer: I am a medical researcher at one of the largest hospitals and clinics in the world. A not-for-profit institution, and funded mostly by National Institutes of Health grant awards (tax dollars).

 

Note that I didn't say YOU or any other dealer was a criminal on this site. And, my opinion is based on 8 years of interaction and dealings. I believe it a fair assessment, and I have seen what I call "criminal" acts happen in front of my eyes in his shop when elderly folks come in to sell gold or coins.

 

As an example, two years ago, while I was browsing in his store, he bought a small lot of mercury dimes from an older woman and paid his normal insulting below spot price for them, without even scanning them for better dates or varieties. After she left, he began the process of looking at the coins in more detail. Well, it was apparently his lucky day as there was a VF or so 42/41 dime among the bunch. He let me look at it, and subsequently it ended up in his display case for a price higher than was paid for the whole lot of dimes (I was present for the entire transaction).

 

I see it this way. If you as a dealer have knowledge about coins and the person you are buying from has no knowledge, it behooves you to inform that person and offer a fair price, otherwise you are a criminal. As an example, the transaction that happened above I considered criminal in nature.

 

Conversely, if both the buyer and seller have numismatic knowledge, and the buyer spots an oversight or uninformed label/price on a coin, then the buyer can get a good deal. The difference in my mind is that the dealer has the knowledge (or should, if he/she calls themselves a coin dealer), and should be more detail oriented. It does not behoove the buyer to point out seller errors or oversights. That is the livelihood of a dealer and his/her career, and they should know better.

 

I know it seems like a double standard. But, I don't think it is. It is a philosophical point on the morals of being a good business person, IMO.

[Houston Investor]

Whats normal for harshly cleaned culls? Zero in the opinion of many. They will simply put down zero for those types of coins in calculating an offer on a collection (lump sum deal) or meekly beg off "sorry no interest - have too many already, trying to phase them out"

 

Frankly I think he was rather generous. Surprised he would even want to fool with them. I would suggest you shop them around.

 

They don't even sound sellable on the Bay at anything near melt let alone the negs one would probably get. Many would be afraid to list them.

 

I have encountered collectors at show trying to come around and dump their trash on me or worse trade it for a nice coin. I try to be polite as possible and steer them to someone who would give them top dollar. But top dollar wont be that much. Sorry, but I am not a fan of stuff I dont consider very sellable. If they were decent no problem circs I would think you could get more than his offer.

 

 

[MarkFeld]

So my assessment: This guy is a Criminal preying on clueless desperate people. It's sad really.

 

Sometimes some of you really amaze me.

 

Not once have any of the "accusers" on this board outed what they themselves do for a living. It would make it easier for the rest of us to point out what "criminals" you are in pursuit of collecting a paycheck.....

 

Do your business where you would like to do business. It's simple.

 

Paul

 

Disclaimer: I am a medical researcher at one of the largest hospitals and clinics in the world. A not-for-profit institution, and funded mostly by National Institutes of Health grant awards (tax dollars).

 

Note that I didn't say YOU or any other dealer was a criminal on this site. And, my opinion is based on 8 years of interaction and dealings. I believe it a fair assessment, and I have seen what I call "criminal" acts happen in front of my eyes in his shop when elderly folks come in to sell gold or coins.

 

As an example, two years ago, while I was browsing in his store, he bought a small lot of mercury dimes from an older woman and paid his normal insulting below spot price for them, without even scanning them for better dates or varieties. After she left, he began the process of looking at the coins in more detail. Well, it was apparently his lucky day as there was a VF or so 42/41 dime among the bunch. He let me look at it, and subsequently it ended up in his display case for a price higher than was paid for the whole lot of dimes (I was present for the entire transaction).

 

I see it this way. If you as a dealer have knowledge about coins and the person you are buying from has no knowledge, it behooves you to inform that person and offer a fair price, otherwise you are a criminal. As an example, the transaction that happened above I considered criminal in nature.

 

Conversely, if both the buyer and seller have numismatic knowledge, and the buyer spots an oversight or uninformed label/price on a coin, then the buyer can get a good deal. The difference in my mind is that the dealer has the knowledge (or should, if he/she calls themselves a coin dealer), and should be more detail oriented. It does not behoove the buyer to point out seller errors or oversights. That is the livelihood of a dealer and his/her career, and they should know better.

 

I know it seems like a double standard. But, I don't think it is. It is a philosophical point on the morals of being a good business person, IMO.

While you are describing conduct that many would consider unethical, and which I abhor, it is clearly not "criminal". You and a few other posters have used that term way too generally and loosely.

[brg5658]

Whats normal for harshly cleaned culls? Zero in the opinion of many. They will simply put down zero for those types of coins in calculating an offer on a collection (lump sum deal) or meekly beg off "sorry no interest - have too many already, trying to phase them out"

 

Frankly I think he was rather generous. Surprised he would even want to fool with them. I would suggest you shop them around.

 

They don't even sound sellable on the Bay at anything near melt let alone the negs one would probably get. Many would be afraid to list them.

 

I have encountered collectors at show trying to come around and dump their trash on me or worse trade it for a nice coin. I try to be polite as possible and steer them to someone who would give them top dollar. But top dollar wont be that much. Sorry, but I am not a fan of stuff I dont consider very sellable. If they were decent no problem circs I would think you could get more than his offer.

 

 

It is the same dealers who are selling worthless junk silver coins at $2 over spot from a coffee can at shows who are only willing to give you 60% of melt for the same coins when you want to sell them their junk back.

 

Like I said, I had these coins for a while, and though they are what I would call harshly cleaned, they were not culls. My definition of a cull is a coin with a non-readable date, or worn almost to the point of no recognition. These were high detail buy obviously cleaned coins. There were even a couple 1881-S coins in probably AU50ish grade among the bunch (not cleaned as far as I could tell), but that coin is so common it might as well be bullion. Long story short, I got $28 a piece at a show one day later from the low-ball offer. Interpret that how you will.

 

PS -- If you have some 90% silver cull coins that you are willing to send my way for $0, I will pay shipping.

[Houston Investor]

Your entitled to your opinion but a harshly cleaned coin just is not on the top of my buy list. I have no sympathy for you and your blowing in the wind blasting dealers with me or some of the other posters here. Your inability to get your price is not my problem.

 

However, I did pay melt at a show awhile back for a couple cleaned cull dollars to solder onto money clips I use for myself. Perhaps you should offer them to a coin jeweler.

 

Yes a low offer can be like receiving a bucket of cold water. I have had people offer me 60% of bid on nice slabs but so what; join the club. I dont get mad about it I just go out and buy some at that myself.

 

Again, if your going to sell coins and get your price, you have to market them to the right buyers. Looks like your finding out its harder to sell coins than buy them (I learned the hardway in 1990 right after the crash). As it takes cost plus at least 40% to make it in the coin business - 60% of estimated selling price is not an unusual offer, especially in this economy.

 

Not too long ago a guy offered me an NGC 65 1936-D Dollar at a show. At that time CDN Bid / Ask was $500 / $525 (this may have been 2009). I offered him $300 considering the MS 64 is only around $100 and the MS 65 would be a tough big ticket coin to sell anywhere near $500 uless I happened across a registry fanatic (maybe $550 on a good day if I was lucky). He passed and tried to argue about how bid was $500 (I am sure he had tried the Bay and was getting nowhere near that) - I firmly told him "well go shop it around then." Now the coin is bid at $355. Nothing personal, but I run a business.

 

As far as my 90% silver - I recently sold about $100 FV, many of them nice Circ G-VG Barbers, some BU Franks, the rest decent circ common stuff at melt to an investor in a private transaction to finance another project without dipping into paycheck money. I had bought them a long while back and my pct of profit on that sale was 63% as bullion has upticked since then. I still have a considerable silver stockpile and now am buying / bidding on any slabbed mod commem dollars, modern silver pf sets at up to $10 over BV I can. I recently bought several US Army gold $5 slightly before the mint raised their price. Now I am in them below melt. I think the USM silver pf eagles (appear to be priced below common bid which I calculate at BV + $21) and pf sets look like a good buy right now. I recently bought a large quantity. I would rather pay a few bucks more for quality than try to save a few bucks buying someones cleaned trash from what a coffee can. What he cant even afford a decent junk box?

[brg5658]

Your entitled to your opinion but a harshly cleaned coin just is not on the top of my buy list. I have no sympathy for you and your blowing in the wind blasting dealers with me or some of the other posters here. Your inability to get your price is not my problem.

 

However, I did pay melt at a show awhile back for a couple cleaned cull dollars to solder onto money clips I use for myself. Perhaps you should offer them to a coin jeweler.

 

Yes a low offer can be like receiving a bucket of cold water. I have had people offer me 60% of bid on nice slabs but so what; join the club. I dont get mad about it I just go out and buy some myself.

 

Again, if your going to sell coins and get your price, you have to market them to the right buyers. Looks like your finding out its harder to sell coins than buy them . As it takes cost plus at least 40% to make it in the coin business - 60% of estimated selling price is not an unusual offer, especially in this economy.

 

I never said it was your problem. The point is that a "sorry I'm not interested" from the dealer would have been just fine by me. What's more insulting is to get a pathetic offer. Your hardships as a B&M coin shop dealer are no more my problem either, so let's not get juvenile here.

 

The original post was to enquire what other people were being offered for silver coins. I thought 60% of melt was a bit low, and I was testing the waters. Now unless I hit some nerve in my post regarding the unethical swindling of elderly, I don't quite understand what has got you all aflame.

[gmarguli]

At $42 spot, there is $32.48 in silver in a Morgan dollar. You're calling them junk and harshly cleaned. I'm assuming that they are not unc. If so, there is less silver on them right now. Let's assume 5% of the silver is gone due to wear and harsh cleaning. So there is now $30.86 in silver on the coin. Since the guy is going to melt them, he is likely going to get around 85%. That's about what I get for melting a few hundred ounces. He's now netting $26.23 per coin. He pays you $21. So his profit on this coin is about 25%.

 

What does he get for that 25%? He pays for the overhead on his shop, pays for the postage or gas to get them to the smelter, and he gets to accepts the risk that silver doesn't fall between the time he buys the coin from you and the time the smelter cuts him a check.

 

I fail to see how his offer is even close to criminal. Seems like he is offering you an amount to get a little profit and protect himself from any downside swing in silver. While not the best offer you can find, clearly not an awful or criminal offer.

[Houston Investor]

I dont run a B&M (with all its overhead costs) and have no complaints about my business as a matter of fact its performing in excess of budgeted ROI.

 

I think Greg has a really good point and 25% barely keeps the lights on IMO.

[brg5658]

At $42 spot, there is $32.48 in silver in a Morgan dollar. You're calling them junk and harshly cleaned. I'm assuming that they are not unc. If so, there is less silver on them right now. Let's assume 5% of the silver is gone due to wear and harsh cleaning. So there is now $30.86 in silver on the coin. Since the guy is going to melt them, he is likely going to get around 85%. That's about what I get for melting a few hundred ounces. He's now netting $26.23 per coin. He pays you $21. So his profit on this coin is about 25%.

 

What does he get for that 25%? He pays for the overhead on his shop, pays for the postage or gas to get them to the smelter, and he gets to accepts the risk that silver doesn't fall between the time he buys the coin from you and the time the smelter cuts him a check.

 

I fail to see how his offer is even close to criminal. Seems like he is offering you an amount to get a little profit and protect himself from any downside swing in silver. While not the best offer you can find, clearly not an awful or criminal offer.

 

Fair enough. Instead he got nothing, because I took my business elsewhere.

 

This basically boils down to the old dichotomy of trying to sell for the most you can and trying to buy for the least you can. In this case I was on the other end of the transaction. I'm just glad I'm a collector/buyer and not a dealer/seller. Kudos to those of you who can make a success in the selling world (like you Greg -- I've bought a couple things from you on the BAY and your items are stellar quality). Live and learn.

[Kamillion]

before the internet made everything easier

 

people actually had to make money running businesses like this

 

blindly selling is foolish and never the buyers fault

[RockMyAmadeus]

For those who consider 60% of bid a "poor deal", please remember that coins are traded on much thinner margins specifically because of their underlying metallic content.

 

I know dealers in other collectibles fields that would kill to be able to get 60% of "guide" value for their items.

 

I love the fact that, barring significant movement, I can sell the $1,000 in bullion that I bought last week for maybe $900 next week, if I needed to. That's not true of many other fields.

 

 

[noow]

$21 is DEFINETLY a lowball offer, but I agree it would be hard to market it (other than to melt it) if it is harshly cleaned... but you could sell it to someone for junk bullion, that would net more. I'm not sure why the dealer offered that low if he could just throw it in a junk bag. But I guess he has his reasons too...

[JStull]

 

My question is this: Is it normal for a dealer to offer $21 per Morgan Dollar, given a silver spot price of $42?

 

Most honest B&Ms offer a certain amount x the face value. Right now with silver at $39.50 the melt is around $30, the offer would be around 27 x fave value. I don't know any B&M that pays melt for junk silver.

[brg5658]

 

My question is this: Is it normal for a dealer to offer $21 per Morgan Dollar, given a silver spot price of $42?

 

Most honest B&Ms offer a certain amount x the face value. Right now with silver at $39.50 the melt is around $30, the offer would be around 27 x fave value. I don't know any B&M that pays melt for junk silver.

 

When I went in last Saturday (8/20), the melt value was $33/oz for a Morgan and Silver was at $42.90/oz. Even with the $3/oz decrease since last Saturday, I wasn't offered anywhere close to 27 x face value.

 

Though, what you say is almost exactly what I was offered on Sunday, 8/21 when I sold them at a coin show for $28 each. Thanks for the reassuring words that it wasn't just me who thought $21 was low.

[coinman_23885]

 

My question is this: Is it normal for a dealer to offer $21 per Morgan Dollar, given a silver spot price of $42?

 

Most honest B&Ms offer a certain amount x the face value. Right now with silver at $39.50 the melt is around $30, the offer would be around 27 x fave value. I don't know any B&M that pays melt for junk silver.

 

Melt value is just under 30x face value for 90% silver.