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The ethics of cherrypicking

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I just read Mike Thorne's article on cherrypicking and wanted our members' rules of thumb. I searched for "cherrypick" over the past year but didn't find any threads here in this forum (and that surprised me).

 

From past discussions I understand this can be a touchy subject, and I'm not trying to stir up a hornet's nest.

 

I have cherrypicked a number of coins from auctions, and I have purchased a number of coin lots that included scarcer varieties. When it comes to buying coins from non-collectors or fellow collectors, I think it fair to offer what the coin is worth. This doesn't mean I start off at retail. This means I offer what I think is fair (somewhere between wholesale and retail).

 

If buying from a dealer, it gets a bit trickier. If I buy a coin that the dealer in question doesn't specialize in, do I have an obligation to educate him?

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If buying from a dealer, it gets a bit trickier. If I buy a coin that the dealer in question doesn't specialize in, do I have an obligation to educate him?

 

I don’t think that you are obligated to educate them. When a dealer puts outs out his shingle as a “professional numismatist” he’s saying that he knows enough to provide a professional service. That means he should be decently versed in the coins he sells. If he missing something and you pick him or her off because you know more, that’s the way it goes.

 

I’ve cherry picked some dealers, but I’ve also informed dealers, whom I respect, that they had missed something. To me a relationship with a dealer should be a two way street. I’ll help you with attributions and values on stuff like tokens and odd varieites, which is an area where many dealers are short on information. BUT if you have something I would like, don’t try to squeeze the last dollar out of me. I expect to pay fair prices, but if I’ve done favors for you free of charge, don’t try to rip me a new one. That’s all I ask, which I think is only fair. (shrug)

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Buyer and seller almost never have the same knowledge of a coin or series. Using your knowledge to identify something special is a reward for your work in learning more than "the other guy." In any normal commercial transaction the parties agree on value plus any specific stipulations, and exchange of money seals the deal.

 

The ethical aspects come in only if you have a moral or fiduciary responsibility to the owner of the coin. If you are hired (or volunteer) to classify or appraise someone’s coins, then you have a primary responsibility to inform the owner to the limit of your abilities.

 

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I draw a comparison between buyers who denigrate a coin they want to lower the price to sellers who hype a fictitious benefit of one they want to sell. For example, a buyer looking to "rip" a rare variety may point out that the coin looks like it has been wiped, has a rim ding, etc. even while he knows the coin is underpriced. Similarly, a seller can hype a "scarce" variety that is actually more common than the ordinary variety. I don't collect Capped Bust halfs, but I see so many more of the 50/20 variety than the other that I think the latter is probably scarcer (even if a seller tells customers, "This is the rare overpunch variety!").

 

In the end each needs to do his homework. Even so, if it were to turn out those Tibetan coins a seller asked me to buy for very little so he could get rid of them ended up containing a very valuable coin, I'd feel obligated to pay him part of the profit. After all, neither of us collect them. I'll do the due diligence just in case.

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When selling, I ALWAYS start HIGH with a dealer, b/c dealers like to haggle and they will ALWAYS counter-offer. When buying the opposite holds true. I would love nothing more than to cut out all the BS and just give a dealer my BEST price but I know how the game is played and how it works. So, I MUST give myself some 'cushion', so that we can meet somewhere in the middle on a price that we BOTH can live with. It's all part of the game. Some days, I have walked away with my original investment PLUS a HUGE profit and other days I've had my shirt taken off of my back. B/c of the reasons that I have outlined; I feel NO moral obligation. It's a game of victories and losses and, if you're smart enough, you'll just be happy enough to walk away AHEAD (in the long run), as I have done. :)

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coins/the coin game/coin industry is basically lower level greed and (for some) higher level greed and the wild west where anything goes

 

because of

 

new, unknowledgeable, passionate collectors thinking with their hearts instead of their brains when buying from preditors in the coin game

 

and in combination with

 

unregulated industry and with no concrete scientific standards for grading/vlauing of coins

 

a true wild west show for many to take advantage of others

 

such is the coin game

 

 

 

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I just read Mike Thorne's article on cherrypicking and wanted our members' rules of thumb. I searched for "cherrypick" over the past year but didn't find any threads here in this forum (and that surprised me).

 

From past discussions I understand this can be a touchy subject, and I'm not trying to stir up a hornet's nest.

 

I have cherrypicked a number of coins from auctions, and I have purchased a number of coin lots that included scarcer varieties. When it comes to buying coins from non-collectors or fellow collectors, I think it fair to offer what the coin is worth. This doesn't mean I start off at retail. This means I offer what I think is fair (somewhere between wholesale and retail).

 

If buying from a dealer, it gets a bit trickier. If I buy a coin that the dealer in question doesn't specialize in, do I have an obligation to educate him?

 

No, and as long as you pay the seller's asking price, I see no ethical issue. You should know what you are selling.

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Cherry picking is a perfectly legitimate means of enhancing your collection. If you see two slabbed MS63 1921 Peace Dollars and one of them has clearly better eye appeal, then you pick the one you like. Which is exactly what I did. The dealer can price them differently if he wants, in my example the price was the same.

 

 

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I really don't have any problems cherrypicking a dealer (who is a professional, and is thus expected to have a higher level of knowledge). I also don't have a problem cherrypicking on Ebay - again, since they are selling, they should have the knowledge.

 

I do have a serious problem cherrypicking non-collectors, inheritances, little old ladies who have collections, or the like. The difference is they don't have the knowledge, and I don't expect them to know what they've got.

 

I see nothing ethically wrong with cherrypicking from someone who should know, or doesn't care, but I see everything wrong with taking advantage of someone who I don't expect to know anything about what they have.

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Cherrypicking is knowledge, knowledge and expertise should be rewarded. As a coin collector you are already have to absorb the dealer markup in your purchases. One way to show a return on your coin investments is to be a knowledgeable buyer. Buy low, sell high, I think ( but not 100% sure) we are still allowed to do this in this America.

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Cherrypicking is knowledge, knowledge and expertise should be rewarded. As a coin collector you are already have to absorb the dealer markup in your purchases. One way to show a return on your coin investments is to be a knowledgeable buyer. Buy low, sell high, I think ( but not 100% sure) we are still allowed to do this in this America.

 

I agree with this 100%. In another post I mentioned I had great time at a coin show this weekend and enjoyed talking with all but one dealer. That dealer was one of those guys who when I asked how much he was asking for a 1884CC GSA Morgan, felt inclined to tell me the entire history of the morgan dollars and the GSA program. I was fine with that even though not all his facts were accurate (facts I learned on here from an informative RWB post). What I didn't appreciate was then how he continued to tell me how spectacular this specimen was (probably about an MS63) and rare it was to find in this condition...again didn't bother me too much. The thing that bothered me was when I started to point out all the bag marks and then just wanted to talk to him about the program he felt inclined to cut me off in conversation whenever I would try to get a point accross...it was very much for the other customers standing around the table and had nothing to do with me or my interest. When he was done "showing off" to build his credibility I simply handed him back his common date MS63 GSA morgan and waited for him to ask if I was interested to which I politely told him I had a much better example at home than his "spectacular" specimen and that I was merely looking for an upgrade...not a lesson in something I already know. rantrant complete

 

Point is when someone acts so pompus and treats the customer like they are ignorant they deserve to be cherrypicked. The rest of the dealers in the room not only taught me stuff, but a few even learned a thing or two. There simply are a lot of small time local dealers who don't even know what they have in their cases, but then again most are pretty fair and honest about it.

 

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I see nothing ethically wrong with cherrypicking from someone who should know, or doesn't care, but I see everything wrong with taking advantage of someone who I don't expect to know anything about what they have.

 

This makes perfect sense.

 

I had no problem picking out the decent Canadian large cents on a bid board that were marked between AU to BU. Some included real BU coins and others were cleaned with VF to EF details.

 

When dealers who know my specialty ask me about coins they have, I'll tell them, though.

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I really don't have any problems cherrypicking a dealer (who is a professional, and is thus expected to have a higher level of knowledge). I also don't have a problem cherrypicking on Ebay - again, since they are selling, they should have the knowledge.

 

I do have a serious problem cherrypicking non-collectors, inheritances, little old ladies who have collections, or the like. The difference is they don't have the knowledge, and I don't expect them to know what they've got.

 

I see nothing ethically wrong with cherrypicking from someone who should know, or doesn't care, but I see everything wrong with taking advantage of someone who I don't expect to know anything about what they have.

 

I agree 100% with what is said in this quote. I do not feel bad cherrypicking a dealer since they should already know what they have for sale plus they more than make up for it by the sales they make to those with less knowledge by selling at prices of 100% or more of the FMV prices.

 

Anyone selling on Ebay is doing so because they want to gain some money by the sales of their coins, generally they already have an idea of how much they want to get from the coin in question and either place a BIN or a reserve price to get what they wanted out of it. Even if the coin is worth much more due to an error they may have over looked or a possible different variety that they were not aware carried a premium, they are selling the coin for what they felt it was worth.

 

Recently, a man (around 25 years old or so) came into a coin shop that I frequent to sell a group of wisconsin quarters. He didnt know there was a high leaf and a low leaf variety that he could of easily sold much cheaper than he could of those two varieties. So I told him about a local coin club that meets twice a month and that he should visit one of the meetings. At the next meeting he was there and I took him aside to show him on my printouts about the differences in how the coin looks and what the respected prices were in relation to the rarity of those two varieties. The very next club meeting he brought the coins and him and I sat down to look at them all. Turns out he had 4 that had the extra leaf. Our club president offered to submit them in for verification for him at half the cost of submission with the understanding that he would get one (the lowest grade one) from him for his store to sell once they returned. I ended up buying the rest of them from him at 40 cents each to set aside for my niece's and nefews once they have their own children. Currently I have a roll of each statehood quarter in the safe for them once they have their own children. Maybe they will be worth something by then or maybe they wont be. Either way it will help encourage others to get into the hobby at a later time.

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Crackout artists cherry pick all the time lol. Then sell their just made it coins with some circus huckster drivel about how wonderful the "tab" toning is (ignoring the black areas or lack of luster) at a tad over sheet and look like heroes. Or if they are really good at their BS they will push for a substantial premium bc after all we just have to buy their wonderful unique toned coins. You might say they are real sharp on both sides of the ball.

 

I have no problem cherrypicking and don't care who it is I pick off. But beware, if it looks too good to be true it probably is.

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I also agree.If one purports to be a professional then they should have put the time and effort in educating themselves in their chosen field.

Additionally one who is well versed in cherry picking should not take advantage of the uninformed public.A fair offer will go a long way in one's integrity.

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The only "cherrypicking" I have ever done for the coins I buy is for South African. I have bought them at substantial discounts to what they were worth and for what I sold them for later. But that is only because I have followed this series more closely than almost everyone else and in most instances, anyone else could have bid against me and outbid me if they wanted to do so. They did not.

 

I have never bought any coins directly from another collector and outside of auctions, mainly from two dealers. From both, I buy the coins sight unseen and though I have a return priviledge, I have never returned problem coins because that to me is the trade off I make which enables me to buy the others so cheaply.

 

One of the dealers is an expert in this series. Why he does not sell the coins for more by having them graded or putting them up for auction, I do not know. It is his choice and I have no guilt in buying them for the prices he asks.

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