In the past, we’ve written articles on how to identify reputable coin dealers. These have been some of our most popular articles, based on the social media activity we’ve seen, so we thought that we would take a slightly different approach to the topic. All of the information that we’ve previously shared on how to identify reputable coin dealers still holds true, but we thought that we’d provide you with some inside knowledge as to how we identify coin dealers with whom to do business. You may or may not be aware, but the coin dealer wholesale market is a huge market. All of the major coin dealers in the nation use the market to sell excess inventory and to fill orders. We’re members of the two largest coin dealer networks in the nation, CoinNet and Certified Coin Exchange, which combined total approximately 800 members. We’ve dealt with hundreds of these dealers over the last few years and would like to share with you how we go about evaluating other coin dealers.
If it Sounds Too Good to Be True…
We’ve all heard the saying “if it sounds too good to be true, then it probably is.” This applies to life in general, but also to the coin dealer market. Over the years, we’ve worked with some coin dealers who offer above market rates for coins. In fact, some of them nearly offer market rates (the prices at which we sell coins). In our experience, these coin dealers cherry pick the coins that they will purchase at their stated rates. In fact, they reject nearly all of the coins in the grade at which they’re offering specified prices, and only purchase coins that grade out higher at the same price. In other words, they’re really not offering above market rates at the end of the day. There’s a large coin dealer in the industry, who shall remain nameless, that has a reputation for doing just that. We’ve personally dealt with them, and have had a large portion of our coins rejected, which we subsequently sold to other dealers at standard wholesale rates. It’s not our intent to call out any particular coin dealers in this article, but rather to bring to your attention that if an offer sounds too good to be true, then it probably is.
Overly Critical Coin Dealers
While it’s a given that coin dealers who offer above rate prices for coins are going to be highly critical, there are many other coin dealers in the marketplace that pay standard wholesale rates for coins that are overly critical. These dealers will look for any reason to try and lowball you on coins, such as light toning, minor rim issues, contact marks, etc. While there are valid reasons for offering reduced rates for coins, some coin dealers take this to an extreme. We have worked with several coin dealers in the past with whom we’ve agreed on prices, only to receive a low ball offer upon receipt of the coins. On a couple of occasions, we agreed to sell slightly off quality coins, such as those that have been cleaned, only to hear back from a coin dealer that the coins have been polished and could only be purchased at a reduced rate. It’s clear which coins have been cleaned and polished; especially for experienced coin dealers, so this was an obvious bait and switch tactic, which is not well received in the industry. Granted, on occasion, some slightly off quality items will slip through the cracks, but by and large, if the coins are as advertised, the agreed price should be honored. This is important to remember from your standpoint on coins that are primarily bought and sold for their silver content, such as 90% silver coins. If the coins have average wear, then the quoted price should be honored. We’ve also done business with individuals who have met with dealers that claimed that their gold coins have been polished, only to realize that that wasn’t the case. We recommend that you stay away from this type of coin dealer.
Coin Dealers with a Checkered Past
As we’ve recommended to our customers and prospective customers, we conduct online searches of coin dealers with whom we’re considering doing business as part of our evaluation process. We view Better Business Bureau ratings, look for companies that have been fined or cited by authorities or third party coin organizations, and conduct an online search of the principals of the company. This last point is one that we failed to mention in our previous article, but is one that shouldn’t be overlooked. In fact, when we first joined one of our coin dealer networks, we assumed that all of the participating dealers had been fully vetted and were reputable companies. While the networks may conduct criminal background checks on these individuals, at least in one case, they accepted as a member a coin dealer that previously filed for bankruptcy and opened under a different company name. We unfortunately ran into issues with this coin dealer after shipping some coins, including failing to respond to our phone calls, e-mails and direct communications through the coin dealer networks; only eventually receiving payment as a result of our continued efforts. Needless to say, we won’t be conducting business with his company again. The moral of the story is that you should conduct an online search of the principals of the company – not just the company.
Slow to Pay or Ship
We avoid coin dealers that are slow to pay or ship product and recommend that you do so too. This is typically only a potential issue if you conduct business with a coin dealer through the mail, as most local coin dealers will pay or deliver the merchandise at the time of the transaction. As we’ve discussed above, an online search should help you to identify any potential payment or delivery issues with the coin dealer that you’re considering. We have personally put coin dealers on our banned list that are slow to pay or deliver coins. In fact, we regularly forego a higher payout to conduct business with coin dealers that we know will promptly fill our orders or issue payment. We also monitor our coin dealer networks for issues that coin dealers have encountered with other dealers. With respect to filling order, we thought we’d take this opportunity to inform our readers that many online coin dealers don’t have the inventory in stock when you make a purchase and issue payment. Rather, they take your funds and purchase the coins through coin dealer networks. This is why there are occasionally delays of weeks or even months until you receive your order. We operate a bit differently in that we don’t take your money to place an order through the wholesale market. Rather, we merely require a 10% deposit to cover our carry costs and to make us whole in the event someone decides to back out of the transaction.
In summary, we’ve identified several ways in which we vet coin dealers with whom we’re considering doing business. Through our experience, we’ve come to realize that above market offers typically aren’t what they appear on the surface, and avoid these opportunities unless we have had prior positive dealings with the coin dealer. Secondly, it’s not worth dealing with overly critical coin dealers. These individuals often employ bait and switch tactics to lure you in to their shop only to offer low ball prices when you arrive in person. Thirdly, remember to conduct an online search of the principals of the company – not just the company. This will help you to identify individuals who have been previously cited or that may be operating under a new company name due to past issues. Lastly, avoid coin dealers who have earned a reputation for being slow to deliver or issue payment. This causes unnecessary stress, which can be avoided if you choose a reputable dealer. We hope that you found the above information helpful and welcome you to contact us if we can be of any further assistance.