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Coin Dealers Trust Them or Test Them?

Tom Becker


I frequently write about this topic because few collectors seem to comprehend the message. I'm hoping repetition leads to understanding.

It's nice to trust people. It's even better when you know they deserve your trust. In all types of commerce it's common for merchants to make flattering claims about their products and business practices. Certainly most of us are experienced enough to dismiss much of this marketing hype and focus on facts. A critically important fact to keep in mind is that each dealer, short of breaking laws, is free to conduct business as they please. How Dealer A chooses to price their coins is their business. What a dealer decides to offer people with coins to sell is entirely up to them. As with most forms of commerce, it is the consumer's obligation to determine if they should do business with a certain dealer or a member of the competition.

All too often, I speak with collectors who have had unfortunate experiences in the numismatic marketplace. Rarely are they willing to accept responsibility for their mistakes. If you aren't testing the dealers you are doing business with you are being both foolish and irresponsible.

It's important to understand that testing a dealer is not simply a matter of getting a second opinion about purchases. One can hardly expect a competitor to suggest that doing business with Dealer A is preferable to doing business with them. Prudent dealers who wish to avoid litigation will seldom make inflammatory remarks about a competitor unless they think using such a tactic is a sure way to gain your business.

Actually, testing the dealers you are doing business with is quite a simple procedure. Here is how it works:

Try to sell back something you bought from them.

Performing this test doesn't obligate you to sell anything. You can always decline the offer. What the test will conclusively prove is if the dealer is willing to repurchase what they have sold. It's important to know where you can go when you wish to dispose of something. I've met very few collectors who never sell coins. It's expected that a collector's tastes and interests may change or that circumstances prompt discontinuing the hobby entirely.

Trying to sell a few coins back to the dealer you bought them from will also provide some information about their profit margins and willingness to buy items at the grade they used when selling them. One wouldn't expect a dealer to admit they overgrade coins when selling. This admission isn't necessary if they try to find an excuse to avoid making an offer or offer a price that suggests this practice. It could also be that the dealer expects to make a larger than traditional profit margin on sales. There can be a number of reasons why a dealer may only be willing to pay you $25 for a coin they sold you for $60. As mentioned previously, how the dealer wishes to conduct their business is up to them. It's up to you to learn about the dealer's policies. The absolute best way to gain this knowledge is by trying to sell a previous purchase back to the dealer.

It is possible the dealer you are testing will figure out what is going on and will “eat” a few coins to gain your confidence. This is especially true if they consider you a valued customer. As mentioned previously, offering coins for sale in no way obligates you to sell them. The testing process will help you learn something about the dealers you are doing business with and the dealer will quickly learn that you are a savvy shopper.

When testing dealers it is important to offer coins that were purchased from this dealer. It is logical to assume that every dealer knows the most about the type of material they are selling and would be most interested in buying this same type of material. Yes, I recognize there can be exceptions. If someone were to offer me a collection of Papal States coinage I would either decline to make an offer or present an offer that I thought would allow me to easily wholesale this material. In either case, it would be wrong for the seller to think I was being unfair. I know very little about Papal States coins and I have no customers for such things. At the same time, I may decide it is worth making a safe offer for this material if the seller is willing to part with the coins.

If you decide to follow my suggestion and test the dealers you are doing business with be prepared for a positive experience. There are many dealers who are as anxious to buy from customers as they are to sell to them. These dealers are prepared to work on reasonable profit margins and they are eager to have you as a steady, long term customer. Testing all the dealers you do business with will enable you to find the ones that are right for you.

 

Tom Becker is a regular contributor to the Canadian Coin Reference Site, you can direct your questions directly to Tom easily by E-mail:tom@tombeckeronline.com or visit Tom's website @ http://www.tombeckeronline.com

 




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