The Ethics Thread

Recently there has been a lot of talks about ethics. ethics about buying coins selling coins etc. Are ethics just a bunch of gray or are there universal ares of black and white? hopefully this thread will bring out a lot of different views on the subject. So the reader can eventually see different viewpoints and gather enough evidence to make good ethical choices.

I am not going to post any of my experiences or thoughts to bias the thread one way or another just a bunch of questions. Readers can add to the questions and discuss. Hopefully there will be no personal attacks on the respondents for their ethical questions and hopefully the mods will help to make sure that the thread does not degenerate.

• How much of a dealer profit is ethical? 10% 20% 100%.? If someone lists a coin on ebay knowing full well that they will get more money there then anywhere else is that ethical? Is not doing that dumb even if you start at 99 cents?
• Is selling at auction houses the only ethical option? What about sellers who negotiate part of the BP into their sale price is that ethical?
• It is generally said that there are more ignorant buyers and they get taken advantage of most of the time. so are we trying to say this is an unethical business as a majority of the transactions are people getting ripped off.
• Some people have more influence than others in this business. They use their opinions to influence the industry. There are also some dealers collectors who have been labelled scam artists due to their past records. If they decide to sober up will they be given another chance/ should they be given another chance?
• Cherry picking happens both on the buyer as well as the seller side. Are one/both ethical?
• If we say ethics are personal and differ from person to person then how can we call anyone else ethical/unethical?
• Is gradeflation ethical? Why or why not?
• Coins are poor investments yet a lot of people make money on coins by advertising them as investments. Are they really bad investments and are all people making the claim of coins to be good investments unethical?

Just some thoughts i was having and i decided it would be good to post them here for a discussion.

 

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I'll take a stab at answering.

In a nutshell, collectible coins are not necessary for life. They are not food, shelter, clothing, health, etc. A fair price is whatever someone is willing to pay for it. How much profit is 'fair' for the seller? 'Fair' has no relevance to that question. The coin is worth whatever someone will pay for it.

Cherrypicking-- no problem. I don't see how that is an ethical issue; it is the behavior of an educated buyer.

Unethical: misrepresenting what you are selling, by description, photo, or whatever. Tacking on fees that are not explicitly stated prior to the transaction would also be unethical.

Gradeflation: as the saying goes, 'buy the coin, not the holder'.

Advertising coins as investments: whatever... it's the buyer's responsibility to understand the value of what is being purchased, and to understand that markets and values are unpredictable.

 

For me all of it boils down to a couple simple rules. "Honor your word" is the most important thing, followed by "do not be deceitful and use it to your advantage against another". I also believe there's black, white and grey to ethics, it's not all cut and dry just like many things in life. I believe ethics is deeply rooted in being all about what you know, and how you use what you know to influence the outcome for favorable gain you otherwise wouldn't have received.

An example - I bought an Ike, your standard OGP proof variety a while back for twice what the normal going rate was. Was the seller ethical for making double profit? I don't see why not as he had it listed for that price, it was represented properly and honestly, and I simply just wanted the coin and was willing to pay more for it. If I wasn't willing to pay more for it, then I walk away.
However, if that same coin was advertised as an error, a special variety, or something that would have made it worth that much more, but in reality it wasn't, then I would have considered it unethical because it was an attempt to receive ill gain by claiming it was something it wasn't.

To your questions above:
1) Ethical to me, as long as there is no misrepresentation of what it is. The market will determine the price and acceptability, and you make what you make.

2a) Where you choose to sell has no bearing on ethics to start with, unless you enter into an exclusive contract with one and then finalize the deal through another venue. Key word exclusive. There's nothing wrong with placing a for-sale ad in multiple newspapers, craigslist, etc as long as you respect the rules of the entity you listed with where they buyer found you.
2b) Wherever there's negotiation between the buyer and seller, as long as both agree and no other contracts are broken, there's no breach of ethics.

3) If a buyer pays more for something because he simply doesn't know what he's doing, no ethics breach. If the seller is using deceitful tactics or preying on the buyer because he knows he is not well versed, then breach of ethics.

4) Complete breach of ethics. You're using your position or knowledge to swing the balance in your favor so that you end up better off than you would have been on a level playing field.

5) Grey area and much harder to deal with. I don't think there's anyone in the world who doesn't like a good surprise when they find something they didn't expect in a good way. I feel that if you find something and cherrypick it without using any tactics to skew the value any further, it's a case of lack of buyer/seller education. If you specifically try to undermine the price of something even further so you're sure to twist the sale in your favor, and know that you are taking extreme advantage of the situation, I find that unethical.

6) Ethics shouldn't differ from person to person. It's the same as The Golden Rule, The Moral Compass, etc. It's about Doing The Right Thing, and most people I believe know the difference between what feels right and what feels wrong, regardless of the letter of the law. I think this delves more into a religious/philosophical belief and debate and I'll stop here.

7) Gradeflation is unethical again, if done with the intent to deceive. Grading in and of itself is subjective and opinionated based upon interpretation of certain decided standards. A point here or there is more determined by human judgement or error and I believe well within the lines of an honest mistake with no intent and ethical. Severe under/over grading done on purpose to take advantage of another's lack of knowledge and enhance profit in the seller's favor is unethical.

8) Coins are a bad investment, since their value is vacuous. There is no solid entity providing a foundation for value and growth of the product, it's based on what people think it's worth given certain factors, there's no real cost basis to determine true value. A V nickel is worth 5 cents at the core. Certain humans have said that certain ones, because of certain factors, are worth more, and those who choose to believe that will make it worth that buy buying and selling at that level. Without those driving factors and those who believe in them, it's worth 5 cents. Those who truly believe the values will continue to be like that because of their love of the hobby, will claim they are good investments, and there's no issue with ethics there. Those who twist this love of the hobby to prey on the uneducated/weaker mindsets of others, and use it to enhance their financial gain or position, are unethical.

 

Some very interesting observations from the respondents so far. Keep up the good work and do post your questions if you have any.

 

Ethics is not a gray area, it's the process of determining right and wrong, and it is a field of philosophy based on reason and logic. There are multiple different ethical systems containing different tests and values, i.e. utilitarianism, hedonism, consequentialism, etc.

Some basic tests I have discussed before are the golden rule, yes that one, and the Kantian imperative. To find out if a behavior is ethical you apply a set of rules to the behavior and use logic and reason. Examples:

• How much of a dealer profit is ethical? 10% 20% 100%.? If someone lists a coin on ebay knowing full well that they will get more money there then anywhere else is that ethical? Is not doing that dumb even if you start at 99 cents?

Any amount of dealer profit can be ethical based on the golden rule and the Kantian imperative. Golden rule states that we should treat people how we want to be treated and as a seller I want to make as much money as possible. The kantian imperative is a test which simply stated is, if the behavior became universal would it have good results or bad. Again, universally applied profit maximization is the foundation of modern capitalism.

Now, if a dealer misrepresents a product and overcharges based on that misrepresentation it's fraud. If a dealer takes advantage of a new collectors lack of basic knowledge it's unethical. Things like telling a new collector that their 1877 indian head is only worth $10, or charging a new collector $1,000 for a coin worth $10. Again the golden rule and the Kantian imperative rule out both sets of behaviors, but these behaviors in and of them self are unethical without bringing profit into the question.

Another useful tool is thought experiments. Suppose you dig up an 1913 liberty nickel in your back yard, are you bound by some rule to not sell it for what it's worth? Is it unethical to make more tham $100, $1,000, $10,000? Of course not, because the amount of money, or profit margin, does not in and of itself make the behavior unethical.

• Is selling at auction houses the only ethical option? What about sellers who negotiate part of the BP into their sale price is that ethical?

No it's not the only ethical option, and negotiating back part of the BP is ethical, same analysis as above.

• It is generally said that there are more ignorant buyers and they get taken advantage of most of the time. so are we trying to say this is an unethical business as a majority of the transactions are people getting ripped off.

Frequency with which something occurs has nothing to do with the ethical analysis, it's pure rationalization. Well, everyone is ripping people off, therefore it's OK for me to rip people off. WRONG. Ripping off low-knowledge collectors is unethical. It breaks the golden rule and would put the entire coin collecting hobby into jeopardy if it became a universal principle.

I would encourage you to do the rest of your analysis for yourself, but use the rules and apply logic not feeling. Ethics is not about how things make you feel, it's about applying a set of rules to determine if a certain behavior is right or wrong.

As an aside, you have probably heard of an ethical dilemma, please note that true ethical dilemmas occur when the same behavior is tested with different ethical rules which come to opposite conclusions. So under system A the behavior is considered right and under system B the behavior is considered wrong. It's very rare to find actual ethical dilemmas and most of the time when people say something is an ethical dilemma what they really mean is 'I want to do something unethical and I am rationalizing my bad behavior'.

 

is over challenging someones ethics unethical ? I think it can be.

Examples:
telling a seller/dealer his prices are to high.
telling a seller/dealer you know how much he paid for the coin
telling a seller/dealer he should only offer free shipping.
etc..

if you want to haggle on the price,then make an offer. but don't tell the seller/dealer how to run his business.

a buyers goal should be to find a good seller/dealer.
BUT searching for bad sellers/dealers just so you can complain about them is Bizarre!

if a seller/dealer is selling counterfeit coins then thats different. its good to alert others,and report them.

but complaining on a forum that shipping was to high etc.. is ridiculous.


just my .02

 

I heard a story of one local dealer who had a lady come in and offer a nice silver star certificate for sale, the dealer looked it up in his book, and offered the lady 75 dollars for it, the lady told the dealer that another local dealer had offered her 100 for it. He knew the other dealer was a cheap lowballer, but a cheap lowballer who knew paper money, so he offered her 150 which she took.
One of his customers came in who knew paper money and identified it as a mule star note, worth about a grand. Now in that case I percieved the dealer as a gambler, a risk taker, but not unethical, he truly did not know the true value of the note, but took a risk based on the ladys word. I see that guy not as unethical but missing the value of going above and beyond.

Now one dealer that I know of, also local bought a bunch of proof sets from a collector, the collector was a regular, and he was busy so he bought the sets and looked at them when the business slowed down, he found two no s nickels, and gave the guy more money when he showed up the next time, that to me is going above and beyond.

I heard one collector tell me that one dealer threatened him if he would not sell him his Franklin collection for a certain price, what a shady place that was, he offered me a harshly cleaned 1832 bust half for 500, I looked him in the eye and laughed in his face, I would count threatening people in order to make a buy highly unethical.

I think the very best dealers have the knowledge and the ethics which make them successful, who would you reccomend a friend to sell an inherited collection to, the dealer who lowballed you or sold you a damaged coin for problem free prices when you were starting out, or the dealer who always gave you a fair shake, even when you did not know beets from beans?

 

I find all of that as ethical. If you need money to feed your kids and sell a Morgan dollar for $10 then you are happy. I didn't cheat you and your kids got food. There's nothing wrong with that. If I sell it for $30 then I made money by investing at the right time and selling at the right time.

 

Quite simply, ethics is where you find it. You, the individual on the receiving end, are the one to determine it. Lengthy discourse on the word and matter are not required. You'd be better suited to pounding sand............

 

Okay, I'll take a stab at this.

Thanks for the opportunity to stand on the soapbox. My general issue is that we throw around the word "ethics" without truly knowing what it means. Many of the threads claiming a violation of ethical behavior stem not from what somebody does or doesn't do, but the accusation of being unethical because something doesn't go the way you want it to. the "I think this guy is bad because he wants X amount for this coin, and I only want to pay Y" to "He only paid X for that coin, but he's asking Red Book value. Why does he have to charge that much, instead of taking just a little profit from me" to "I thought the pictures were blurry, but I bid it on it anyway, but know that I got it it looks horrible so I want to send it back to this rip-off artist". Again, this may be unscrupulous, but the fact that the buyer failed to do his homework, or took a chance to find it wasn't to his liking, but it's not unethical when said buyer could have spent 10 minutes on the internet prior to clicking the bid button, or walked away from a deal instead of "gambling on eBay bad pictures".

 

Okay, following up one of the points from the previous post:

An eBay seller posts a coin with a blurry photo, with a BIN that would be high for a bad example of the coin, but very low for a good example. The listing specifies 14-day return privilege.

1) I buy the coin, and it turns out to be a great example, worth 5x what I paid. What are my ethical obligations? Do I need to send the seller more money?

2) I buy the coin, and it turns out to be a bad example, worth less than half what I paid. I choose to return the coin, according to the posted return policy. Is this unethical?

3) I choose to return the coin, and the seller puts up a fight, saying he won't accept returns unless he "sent the wrong item". Is this unethical?

4) The original auction specified eBay's 14-day return policy, which requires the seller to accept returns within that period for any reason, including "the buyer changed his mind". In the text of the auction, the seller states that "returns are accepted only if item is not as described". Is this unethical?

 

I might add:
"Do unto others as you would have done to you".

Also, I've always liked the line:
"Ethical conduct is doing the right thing even when nobody's watching"

 

We are all making some very excellent points and observations from our respective experiences. My opinion is that the thread is moving in an excellent direction

 

My opinion is that the most ethical thing a dealer (or buyer) can do is be honest. Selling a coin without disclosing it's evidence of being cleaned, or giving someone far below a fair price for their dead father's collection are two examples. Buyers can also fall into a dark area, such as returning a different coin in a dealer's holders, or passing off a known quality counterfeit to a dealer with tired eyes.
I am currently in a dilemma, as my current local trusty coin dealer of more than 25 years is going to retire, along with it his business. I seriously worry about finding another as honest, and fair as him.

 

If one has to justify that he has ethics, he almost never does. IMO

 

...which reminds me; election season is just around the corner!

 

I think it's unethical when dealers use the term "very rare" or "key date" on coins that are common as dirt. Seller "CantonCoin" has this 1878 3 pence listed as "very rare".

http://www.ebay.com/itm/1878-UK-3-P...8264173?pt=US_World_Coins&hash=item461282ab6d

I notice quite a few sellers use that word very loosely.

To me I think it unethical because the seller is trying to make a false representation of the coin in order to trick someone into buying it.

 

How would you list your coin...
1. "1802 Draped Bust Large Cent. Horrible condition. Heavy corrosion barely readable."?

2. "1802 Draped Bust Large Cent. Decent details, ground recovery, rare coin please look!"

 

Lack of ethics is not reporting your Use Tax for out of state online coin purchases that were not taxed.

 

Do enlighten us with your thoughts GD