An informative tale: Learning a lot from a bad dealer

My 9 yr old son Sam and I have just started collecting and needless to say he is thrilled to have another hobby to share with dad (we also paint and play with toy soldiers together). He is very psyched to build up his collection and since he has some of dad's purchasing power behind him (we split his purchases) he is always on the prowl.

We were in a flea market today and he spotted a table with piles of coins in folders and bags. He found indian heads and nickels he wanted. Being new we had no idea of pricing, but even I could tell the coins were G or VG grade at best. The guy kept telling him how great a deal it was and how he would give an additional 10% off the price. Sam was hooked, and started asking, begging, wheedling to get a few.

Not being sure I suggested the following. I said "See, he is asking $12 for this 1889 indian head in Good condition at best, and $10 for this 1936 dime. Why don't we memorize these, check CoinTalk and a few other sites for prices, and see if he is at least in line with market.". Much to my surprise, Sam agreed. We committed a few more coins and prices to memory, thanked the nice man, and went on our way.

Lo and behold, once home we discovered that the penny he was selling for $12 was readily available for $2 - 3. The dime for about $3, and so on. I asked Sam, "How would you feel if you had paid all that money for coins that were simply not worth it?" He agreed that as much is was tempting just to lay down the cash and walk home with the coin it was much more worth it to lean the real value and be prepared to collect responsibly.

The very important lesson we both learned today was that you must know what you are looking at, what it is worth in the market and then decide what you are willing to pay. Blind, pot shot buying (at least for more then $.25 a coin for world coins out of the big assortment tubs you find here and there) is not satisfying. It is accumulating, not collecting. Paying too much for a coin is not a sign of dedication or collecting zeal; it is a sign of impatience and undisciplined acquisition.

Important lessons indeed, and ones I think will serve Sam (and me) very well in life and in coin collecting.

Mike

 

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Do yourself a favor and buy a copy of the Red Book ((A Guide Book of United States Coins). It will more than pay for itself over time. Not only does it list coin values (perhaps a bit on the high side of retail but it gives you an idea of a coin's value) but it also describes every coin minted by the US Mint.

There are other value guides out there, too. Having a price guide to refer to will protect you from predatory sellers like the one you ran into today.

Knowledge is power.

 

Keeps dealers you don't know a lot more honest when they see you with your handy bid sheet, price guide, etc.. If a dealer gets disturbed when you use a guide then that's a good dealer to avoid. Most honest dealers I deal with almost always pull out their bid sheets and show me the going rate without even asking.

 

Mike:
Thanks for posting, there were some great lessons there.
As always, there may be good deals out there, but you'll only know if you have the knowledge to spot them.
I am glad that you didn't get ripped off by that seller.

 

Mike

I just got started with my two boys (6 and 8) on coin collecting. The local coin club had a show back just after Thanksgiving. We went and had a ball. Everyone was really nice and spent time with us even though we were looking, not buying. The boys came home with a pocketful of freebies and a new enthusiam for collecting. My point is that even though there are some bad dealers out there they are greatly outnumbered by the good guys. This forum is a prime example of that.

Andy

PS> Check your PM

 

I use the Red Book exclusively, but what are bid sheets? Are these the grey sheets I've heard about but never seen?

 

Excellent post.

Coin collecting is also Coin Learning!!!

Besides a " $25 bargain bin" purchase, I don't think I've bought a coin since this summer. Of course, I still check my pocket change and get the occasional roll from the bank.

But I still check in here everyday. You'd be surprised what you can learn. By being patient and knowing what you want, you can save a LOT of money. AND have a heck of a time!

As someone else here has said, It's not BUYING coins, it's COLLECTING coins.

 

Mike - Very good post and a lesson for your son that will not be soon forgotten. If you don't have access to the grey sheets then I like the blue book as it will give you an approximation of what a dealer will pay you for a coin. I always like to check the going rate on eBay as well - as an example - nothing worse than paying $30 for a proof set that is selling regularly for $18 on ebay. Dealers may not be able to part with them at that price due to the margin they need to make but at least you know what the going rate is. It may give you some leverage to talk him down a little if you really like the item.

Good Luck and Happy New Year!!!

Darryl

 

yes.
Dealers use the bid to buy ( or below bid) and ususally ask to sell.

 

That's a great story. Your son is at about the perfect age to learn a few business lessons as well as collect coins.

 

Hello Mike, sounds like you've made a WONDERFUL memory... Gives me hope that he human race will endure.

Take Care
Ben

 

Ben,

If you lie down for awhile and watch the news, the feeling will go away.

 

Chuckle, maybe you're right. It's been a hellov' a day so far. Had to do some unforeseen fence work. Apparently a distracted/drunk driver ran off the road last night and took out about 20' of (5 strand barbed wire) fence and then instead of going out the hole they made going in, they took out another 20' section upon their departure. I hope the car/truck is scratched to hell...

Take Care
Ben

 

Mike,

That'a a great story! You had the wisdom and Sam had the patience and now you each have both!

When I was 9 I did it on my own. No internet, no real guidance just a love of coins. Course it was my money so I was as careful as a 9 year old could be but still I'm sure I got burned on more than one occasion.

Keep looking and learning.

clembo

 

Definitly a good lesson to learn.
I made the same mistake, I knew the prices of a few coins, and saw that this dealer had some that were fairly priced, and over priced.
unfortunately, the coin I purchased, was one I didnt know fairly well, and ended up over paying!

but lessoned learned... :thumb:

 

Happy new year to all. You were very smart in seeking advice and pricing first. welcome to the hobby and i hope you stay for many years. it can bring you much entertainment, knowledge , and friendship. my personal opinion is that once someone enters the hobby, buys at a high price, or buy damaged coins advertised as being "special" {ie; gold plated or colored w/ enamel}. before anyone ever buys a coin, they should first seek knowledge, advice, and , if possible, mentors. when a new person to the hobby gets burned, many never return. there would be so many more people (my own opinion) involved in our hobby, if they just didn't get ripped off. recently, i have written the ana regarding developing a consumer awarenesss class for numismatics. there are only around 32,000 ana members, but there are many more collectors than that. thank God for forums such as this one. you may have saved people thousands of dollars. since the mint is promoting numismatics, we need to find a way to help new collectors enter the marketplace. if they don't get burned, then maybe more will stay. it is better for all of us in the long run, as well as being the right thing to do. once again, welcome to the hobby and i hope it provides you much fulfillment. it is a wonderful hobby when pursued with honest individuals.. steve

 

When I am at a show, I normally show the customers the greysheet levels for the coins they are considering. If it is a coin that cannot be normally purchased at the greysheet levels, like many early copper pieces, I explain that and discuss auction comparisions with them.

If a dealer is afraid of an informed customer, then that dealer should probably be avoided.

 

I agree as long as 'RedBook' and 'CoinValue' are carried as references only to determine rarity and demand. I shudder when I see 'newbies' carrying RB/CV at shows thinking they are similar to the Sears catalog for coin pricing.

I don't think dealers should have to sell to non-dealers at greysheet ask ~ and I think it's an insult to dealers that are expected to do so at shows in order to compete with the other dealers that bought it likely 20-30 and sell at bid. But that's business ~ the big guy always has the advantage over the little guy.

I think I'm meandering off the topic. Good for you for researching the coins before you bought them & not falling for the '1/2' off sale scam or any others. (I hate the 1/2 off scam where the coins are valued at triple their true value so the 1/2 off generally still brings it in at about 150% of true value.

There I go... off topic again. Good for you & your son.

 

Great story and lessoned learned. I ran into a similar individual who wanted to increase his prices instead of his posted prices noted on the coin sleeves. Have to go along with the majority and state purchasing a Red Book for reference or a current issue of CoinValues that post suggest prices or check out their web site.