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proper etiquette re: dealer coin prices

48 posts in this topic

In reading these posts I guess it is okay with some of you that what the Rare Coin Company of American did their buyers back in the 1980s was perfectly fine. This company bought AU coins from local Boston dealers and then sold then in “investment portfolios” of “Mint State” coins to unsuspecting clients who thought they were getting a fair deal. In the end these people paid as much as 30 times what the coin was really worth.

 

For example I paid $50 for an 1869 Shield Nickel that had been sold to a Boston area dentist for $1,550. The other “investments” in his “rare coin portfolio” were almost as bad. The dentist unloaded this “investment” at the Worthy Coin bid wall in Boston in the late 1980s.

 

The Federal Trade Commission ultimately shut the Rare Coin Company of America down and indicted the owners for fraud. The same thing happened to the second version of New England Rare Coin Galleries after Jim Halperin sold the company.

 

I guess according to you guys the FTC was wrong because coin prices are only “opinions” and there is nothing wrong with your “opinion” resulting in selling prices that are way beyond the “opinions” of the vast majority of the coin market. It seems that ethics have no place in numismatic market place. It’s okay to rip people off because the “opinion clause” absolves you from all blame.

 

Okay, if ethics don’t mean anything, here is something else you can chew on. If you allow such people to ruin the coin business you may well look for another line of work because numismatics will be totally discredited as a business. If you want to trash your reputation to defend crooks in the guise that “opinions” trump all other aspects of business ethics, than go ahead and do it. But so far as I’m concerned your actions are just plain foolish.

 

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In reading these posts I guess it is okay with some of you that what the Rare Coin Company of American did their buyers back in the 1980s was perfectly fine. This company bought AU coins from local Boston dealers and then sold then in “investment portfolios” of “Mint State” coins to unsuspecting clients who thought they were getting a fair deal. In the end these people paid as much as 30 times what the coin was really worth.

 

I think your scenario is distinguishable. In the Rare Coin Company of America case, the coins were represented as mint state coins when they clearly were not. This is an intentional misrepresentation of fact with the intent to deceive, and is fraud. I would agree that this is unethical. I cannot, however, extend this same principle to the original poster's scenario. So as long as no intentional misrepresentations are made, I do not see a dealer who charges ridiculous prices as being unethical per se. I still don't like such dealers, and disagree with their business models; however, I do not see an ethical issue here.

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In reading these posts I guess it is okay with some of you that what the Rare Coin Company of American did their buyers back in the 1980s was perfectly fine. This company bought AU coins from local Boston dealers and then sold then in “investment portfolios” of “Mint State” coins to unsuspecting clients who thought they were getting a fair deal. In the end these people paid as much as 30 times what the coin was really worth.

 

For example I paid $50 for an 1869 Shield Nickel that had been sold to a Boston area dentist for $1,550. The other “investments” in his “rare coin portfolio” were almost as bad. The dentist unloaded this “investment” at the Worthy Coin bid wall in Boston in the late 1980s.

 

The Federal Trade Commission ultimately shut the Rare Coin Company of America down and indicted the owners for fraud. The same thing happened to the second version of New England Rare Coin Galleries after Jim Halperin sold the company.

 

I guess according to you guys the FTC was wrong because coin prices are only “opinions” and there is nothing wrong with your “opinion” resulting in selling prices that are way beyond the “opinions” of the vast majority of the coin market. It seems that ethics have no place in numismatic market place. It’s okay to rip people off because the “opinion clause” absolves you from all blame.

 

Okay, if ethics don’t mean anything, here is something else you can chew on. If you allow such people to ruin the coin business you may well look for another line of work because numismatics will be totally discredited as a business. If you want to trash your reputation to defend crooks in the guise that “opinions” trump all other aspects of business ethics, than go ahead and do it. But so far as I’m concerned your actions are just plain foolish.

Bill, what you just posted seems to support what I stated above. This was a company that made a statement as to value, and not price, and that can definitely be done in a very unethical manner.

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I believe this is a great topic.

I have been guilty of fishing on Ebay as I did my research there and found that on some coins it works to make that large sale. Lets face it EVERYONE looks to make a "killing" buying from the unknowing and selling for a large profit. If you say not true you are lying to yourself.

These same coins I had on Ebay , I sold here for $300-400 cheaper to fellow board members as the fishing falled. Is this considered un-ethical to change my pricing so radically - I do not think so.

All lot has to do with market valuation and what the market will bear. Who sets the top limit and bottom limit is those that are BUYING not selling, just look at these 25th anniversary eagles, are they worth 4-500 dollars a piece, NO but it is being paid.

I sold a few coins at my break even level and yet was much higher than market level looked like it could handle, yet they sold anyway at this much higher level. Does this make me unethical for trying to break even - I do not think so ...

To the OP - My point of view is if its a BOARD member and you feel as though your were treated fairly - in the Market Place I believe there is a section for Satisfactory sales with board members ( I think :o) ) If you are not then I would make it a PM so you can discuss it futher and he can 'back up' his valuations and reasons for pricing.

If its not a board member its open season :) like Sleazebayers who do not complete transactions grrrr

sorry for the wordiness

 

 

 

 

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Simply lay your money on the table and make an offer. The dealer will either take it or not. What constitutes a fair price is a subjective issue - the coin could have exquisite toning that commands a premium or be very high end in the grade range. Unless you can give specifics its difficult for me to evaluate your situation.

 

I don't care for or respect people who come up to my table at a show and want to argue about price or make a fool of themselves quoting some auction or price guide to "educate" me. If they are so good at doing their homework perhaps they should set up at a show or open a shop. I do respect people who lay their money on the table and make a cash offer.

 

My goal in pricing is to get between cost and retail and / or make at least 40% gross margin over cost. What someone gave the coin away for on ebay or what some price guide says is basically a moot issue to me. All of my inventory is updated in my excel file monthly as to market retail (It could be CW Trends, per L&C's price list, wholesale bid plus a percentage or whatever). I am there to buy and sell at my price. I quote my best price and don't do haggling. I have found there are many coin people who would probably haggle with a stripper over a 20 dollar lap dance lol.

 

I give more credibility to an actual dealer price on a coin (like L&C Coins, Stacks, Gus Tiso, Jack Beymer, David Hall etc.) vs what someone may have given the coin away on the Bay or some priceguide price.

 

 

 

 

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What constitutes a fair price is a subjective issue

Exactly! And that is why setting an asking price, at any level, is not governed by any code of "ethics".

 

If anything, expecting that goods must be priced at a certain level is what's unethical. Indeed, it would basically be Communism, where one has no right to desire any level of profit for one's goods on the open marketplace.

 

(To me, Communism is unethical.)

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There will never be a shortage of bidiots.

 

James, that 81-S in MS63 is only worth $20 to me. :devil:

 

Chris

 

love that word "bidiots" hahahaha, did you come up with it?

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Let's say a dealer has a fantastic coin, but it's overpriced by at least 200%.

 

Let's say you do your due diligence by gathering relevant, recent auction prices, and make a reasonable offer while including your research to back up your offer price. Let's say the dealer accepts your offer, which is for less than half their original asking price (but still in line with the recent auction prices).

 

Do I get excited and publicly praise the dealer for being reasonable and realizing his asking price was too high? Therefor shining a positive spotlight on the dealer and his shop. Or do I keep it a secret as not to embarrass the dealer with their extremely overvalued original price?

 

I'd like to of course form a long term relationship with this dealer, and others, so I don't want to break any etiquette rules. I'm just super psyched about this hypothetical new purchase. =)

All I know is, I'm for free enterprise, and I don't think the guy did anything wrong, but a dealer doesn't cultivate customers by routinely over-pricing his coins like that.

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What constitutes a fair price is a subjective issue

Exactly! And that is why setting an asking price, at any level, is not governed by any code of "ethics".

 

If anything, expecting that goods must be priced at a certain level is what's unethical. Indeed, it would basically be Communism, where one has no right to desire any level of profit for one's goods on the open marketplace.

 

(To me, Communism is unethical.)

 

+ 1; communism involves theft from the more fortunate of society, much like a certain political ... oh never mind. :whistle:

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All I know is, I'm for free enterprise, and I don't think the guy did anything wrong, but a dealer doesn't cultivate customers by routinely over-pricing his coins like that.

Perfectly stated. That illustrates how Capitalism is self-correcting in that sense. If someone is so foolish as to constantly way overprice his goods, he won't be in business long. The system is very efficient over time, if allowed to work as intended.

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All I know is, I'm for free enterprise, and I don't think the guy did anything wrong, but a dealer doesn't cultivate customers by routinely over-pricing his coins like that.

Perfectly stated. That illustrates how Capitalism is self-correcting in that sense. If someone is so foolish as to constantly way overprice his goods, he won't be in business long. The system is very efficient over time, if allowed to work as intended.

 

And in the mean time a crook can charge $3,100 for an "investment grade" 1921 Peace Dollar that worth is $125 (A real example that I saw happen to some friends of my in-laws), and you people think conduct like that is not going to do great damage to the collector coin industry.

 

Everyone with any sense who is engaged in a profession knows that you have to police the rogue elements. You can't allow the con artists to fleece the public if you want your business to remain viable. Just think of what would happen if PCGS and NGC embraced the “third and fourth world” grading services that have been created to allow crooks to over charge for their coins. Even eBay with all of its faults realized that they had to clamp down on that.

 

Capitalism and competition are great things. The capitalist system gives consumers opportunities to purchase the best goods at competitive prices. The trouble is that only works if the consumer is educated and, to an extent, protected from con artists.

 

The coin industry, like any other industry, needs to police and protect itself from those who use deception to gain an unfair advantage. If we don’t do that, you can bet the government will do it, or the coin market will cease to be viable because its bad reputation.

 

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All I know is, I'm for free enterprise, and I don't think the guy did anything wrong, but a dealer doesn't cultivate customers by routinely over-pricing his coins like that.

Perfectly stated. That illustrates how Capitalism is self-correcting in that sense. If someone is so foolish as to constantly way overprice his goods, he won't be in business long. The system is very efficient over time, if allowed to work as intended.

 

And in the mean time a crook can charge $3,100 for an "investment grade" 1921 Peace Dollar that worth is $125 (A real example that I saw happen to some friends of my in-laws), and you people think conduct like that is not going to do great damage to the collector coin industry.

 

Everyone with any sense who is engaged in a profession knows that you have to police the rogue elements. You can't allow the con artists to fleece the public if you want your business to remain viable. Just think of what would happen if PCGS and NGC embraced the “third and fourth world” grading services that have been created to allow crooks to over charge for their coins. Even eBay with all of its faults realized that they had to clamp down on that.

 

Capitalism and competition are great things. The capitalist system gives consumers opportunities to purchase the best goods at competitive prices. The trouble is that only works if the consumer is educated and, to an extent, protected from con artists.

 

The coin industry, like any other industry, needs to police and protect itself from those who use deception to gain an unfair advantage. If we don’t do that, you can bet the government will do it, or the coin market will cease to be viable because its bad reputation.

 

 

Bill, thank you for the above. I think most people miss the point that there needs to be some industry policing and not just the "let it be someone's 'tuition' to the hobby" type of BS. I get so tired of hearing knowledgeable collectors, who would never fall for something so blatant, blame people less knowledgeable for falling for it, because "they should know better/do the research/pay tuition".

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Everyone with any sense who is engaged in a profession knows that you have to police the rogue elements. You can't allow the con artists to fleece the public if you want your business to remain viable.

Bill, of course the "rogue elements" need to be policed. And rogues are people who mislead others by making false statements as to the "market value" of coins. The rogues misquote price guides, overgrade coins, doctor them, or use other false means to convince someone that something is excessively valuable. They use boiler room tactics, lie, cheat, connive and cajole.

 

However, someone who merely prices his wares at a very high level (but makes no particular attempt to convince anyone that his wares are worth that much) are not rogues. They are merely sellers with high priced coins. Nothing worse than that. If their coins truly are priced too high, the open market will dictate that they shall not have much business.

 

To think that only because someone puts stickers with high prices on their coins, they should be prosecuted as unethical is crazy. Otherwise, EVERY high priced restaurant, high priced clothing retailer, high priced car dealership and high priced candy maker should go to jail, along with every high priced coin dealer.

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I was cruising the sites tonight.. here are my winners for the night.

 

1879-O Morgan PCGS MS64...... normally priced at $550... tonight on GougeBay, $4,495.. wasted one beer on my keyboard..

 

NEXT...

 

1897-S Redfield.. NGC MS65.. normally priced at $562.50.. tonight on GougeBay, $1,070.. wasted another beer on my keyboard..

 

Now, I say "normally" priced because that is what normal dealers price their coins at.

 

As I see it.. Gougers owe me TWO beers.. of my choice of course.

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Everyone with any sense who is engaged in a profession knows that you have to police the rogue elements. You can't allow the con artists to fleece the public if you want your business to remain viable.

Bill, of course the "rogue elements" need to be policed. And rogues are people who mislead others by making false statements as to the "market value" of coins. The rogues misquote price guides, overgrade coins, doctor them, or use other false means to convince someone that something is excessively valuable. They use boiler room tactics, lie, cheat, connive and cajole.

 

However, someone who merely prices his wares at a very high level (but makes no particular attempt to convince anyone that his wares are worth that much) are not rogues. They are merely sellers with high priced coins. Nothing worse than that. If their coins truly are priced too high, the open market will dictate that they shall not have much business.

 

To think that only because someone puts stickers with high prices on their coins, they should be prosecuted as unethical is crazy. Otherwise, EVERY high priced restaurant, high priced clothing retailer, high priced car dealership and high priced candy maker should go to jail, along with every high priced coin dealer.

 

+1

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Wow, this turned into quite the discussion.

 

The rest of the coins offered by this seller are within fair market value, give or take 10%. So I think they were just unsure how to price this one specific coin. My check cleared five days ago and I still haven't gotten word about a tracking number, so I'm waiting to mention which coin or seller it was until I have it in hand. It wasn't an eBay purchase, where I understand a bit of a premium given the fees associated with the site. Heck, when I list stuff on eBay, I always offer 10% off to any NGC forum member here, because it saves me the fees and I don't mind passing those savings on to the purchaser.

 

Anyway, thanks for the discussion guys, it was interesting getting everyone's thoughts and opinions. =)

 

 

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If I see common date, cleaned trade dollars for $795 sitting in a case, I know it is time to move on. No, I don't even check for scarce varieties.

 

I'd like to retract this statement. I thought of an instance in which I'd check the variety. :blush:

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