Hypothetical question for dealers.

You're a coin dealer. A guy walks into your shop or table at a show. He's not old, he's not young. Just your average Joe. He knows nothing about coins. He inherited some coins from a family member. He has a 1909S VDB Lincoln Cent he wants to sell. You the dealer look at it. It's not mint, but it's certainly not the worst coin you ever saw. You ask the guy what he wants for it. The guy, not knowing what he has, thinks for a minute, scratches his head, and asks for twenty bucks. What do you do?

Be honest with your answer.

I know that most of the coin dealers I've dealt with would give the guy the $20 and send him on his way.

 

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I'm no dealer but if the customer who didn't do research on his own coin brought in a coin and asked for $20 for it and I gave him $20 what would be the problem? It is what he asked. If you were to tell him it is worthless and offer him less then that is lying and therefore unethical in my opinion. In this scenario both parties would be very happy.

 

I agree with Tyler. I would give him 20 dollars but only becuase thats what he wants I would NEVER offer 20 dollars because thats when I consider it a scammer

 

You wouldn't want to educate the guy? What if it was an elderly woman selling her late husband's collection? What if it was a young boy just getting into coin collecting? I read a lot of comments on this forum about what's right and what's wrong. It doesn't seem right to rip the guy off for not knowing. What would you do if he came back the next day complaining because he found out what the real value of the coin was?

 

If it was an elderly women asking for a certain price you give her whatever she wants as long as you make a profit. If she asks you to name a price then you come up with a fair price. If it was a child that would be different of course! No matter what situation you do not hurt a child. They do not know better. It is the adults responsibility to protect them. Many dealers wouldn't buy from a child because it isn't a binding contract. However if an adult asks for a certain price and it is way below retail then you just take the offer. What is unethical about that?

 

I think most people today would give the fellow 20 dollars and send him on his way. Perhaps most run of the mill dealers also would do that. Lets pretend that the coin can be sold all day for 950, this means that the dealer makes 930 one time.

On the other hand, if the dealer is an honest man takes the coin and writes the man a check or gives him 470 in cash, that man will tell his friends how he made out, and that word of mouth is priceless. People will talk and give recommends when they feel that they have been treated fairly. This might make the dealer more money IN THE LONGER TERM than if he had just taken advantage of the mans ignorance.

So lets say the dealer takes the coin, shoots the man a twenty, and the guy happens to talk to someone and say, I sold an old penny I found for 20 dollars, It was a 1909 with an s under the date and the initials vdb on the back, his friend says, man you got taken, that coin is worth a lot more money than 20 dollars, really the guy says how much is it worth, well it depends on condition but even a really bad one can get a few hundred dollars, well the guy does not say, I asked the guy for 20 so I cant blame him. The guy is going to say, joe coin dealer ripped me off, that crook practically stole from me.

So that guy is not gonna recommend that dealer, if he runs into another guy with a rare coin he is going to tell him do not go to that guy he is a crook, he ripped me off.

It reminds me of a story, a guy gets up and checks the local ads in the paper, he sees an ad for a brand new Bentley, the ad says 50 dollars, he thinks, they must mean 50 thousand but he calls the number, he says the price in the paper says 50 dollars, is that price right, the woman on the other end of the phone says yes it is, he says I will be right over, he goes over and pays the woman 50 dollars and says, maam I have to tell you, this car is worth 50 thousand, why are you selling it so cheap, the woman says, it was my husbands car, he went on a trip to Mexico with his secretary, he got in trouble and called me and told me to sell the car and send him the money.

 

Just want to say...the excuse "that's what they asked" is just another way of justifying ripping someone off. This thread aught to be a good one to compile a list of people I don't want to do business with. Young, old, middle aged doesn't matter. Any dealer who doesn't at least let the person know that what they have could be worth much more than their asking price is dishonest. IMO of course

 

On one hand if your not going to take the offer when it is presented then why even ask the person what they want for it? $20 seems a little unfair I might just say look, I'll give you $300 for it. That's less than you would normally pay, the guy feels like he is getting a deal and you can sleep at night so everyone wins. You should know the approximate value of things before you sell them and if you don't, you should never make the first offer.

 

If the dealer is a member of ANA he is bound by the ANA Dealer Code of Ethics which states that he must pay a "reasonable" price to a seller, a price that is fair to the seller and allows the dealer to make a fair profit on the coin. I don't think paying $20 for a $950 (retail) coin would pass the smell test by the ANA Ethics Committee.

 

I believe many (dealer or collector) would jump on the deal and take the money to the bank. About 20 yr ago a friend who is also a dealer tried to submit several of the same coin mentioned above to a TPG. They all came back body bagged. I dont know what he paid but I hope it was not too much.

I am skittish about deals like your example, as chances are high it could be a fake and the seller is a good actor. Be on guard on deals that look too good to be true. While I admit that one needs to buy it right to survive in the coin business, I would encourage the seller to get it graded to get a decent price.

 

As a Professional and Legitimate Dealer in Numismatics, one knows all to well, that your " Reputation " is everything. Especially in this business. To answer your question, no one is looking over the dealer's shoulder, but than again many are. For me personally, I assume the responsibility to accurately grade coins to the best of my ability and to refrain from buying or selling at unreasonable prices.

 

I wouldn't be able to sleep at night if I sold it to him for $20. There is something unethical about it. As a dealer you know what it is worth. By educating the man, it would be ethical, and I'm sure he would appreciate it and not only come to a compromise which would benefit the dealear and himself, but he wouldn't forget it either. He'd know that the dealer is honest and someone that is trustworthy. And that carries.

 

The topic of dealer/collector ethics has come up so many times that maybe we should have a separate forum for it just like the ANA's Numismatist.

Chris

 

I agree. That would be interesting. I am taking a class (I'm in College) on Ethics starting Monday.

 

I feel this is a great question, and you're right, Chris, one that repeatedly pops up.

"How good of a deal does it have to be for you to feel guilty about it?"

I thought it was an easy question at first. MORALS, MORALS, REPUTATION, MORALS is what my brain was shouting at me...MRAAAARRRRR!

But then I thought...

I've never had to RUN a B&M. I've never depended on good deals (and the occasional great one) to keep my business and my livelihood afloat. Now, I've sort of had to do this by finding profitable buys at flea markets, auctions and the like...to pay bills...so I understand the mindset of "I have two days to get enough cash to pay my credit card bill...what am I going to sell?" (Keep in mind that, at the time, I was unemployed through no fault of my own.)

I've gotten some pretty sweet deals in the past. I bought about ten modern commemorative halves from my local coin shop for $3.50 each...got home, discovered that one of them was a $100 coin. Felt REALLY guilty about it. Didn't feel quite so guilty about the one that was only worth $35. But overall...felt really guilty. While the coin shop is a business, these are guys that always let me come in, hang out, look through their coins (of course, I always sort them for them and pick out anything really expensive for them...like the time I found a 1930 S SLQ in their junk quarters bin that was better than the coin in his personal collection...) These are people that I consider friends. So obviously I called them to say, "Hey, I just realized that a few of the coins I bought today were worth WAY more than I paid...would you like me to bring them back?" Yes, I actually did this. And their response was, "Consider it a welcome home gift." Conscience cleared. I don't think I'd be able to walk into their store again with a clear conscience if I hadn't called....and felt like I'd taken advantage of them.

But would I feel bad about cherrypicking a 1945 micro S Mercury Dime in AU from the junk dimes? Probably not. I know they seed them...and the value of the dime isn't really THAT high...so again...how much of a good deal does it have to be for me to feel guilty?

I've been asked to be a coin buyer...one of those guys that sets up in a hotel conference room and buys collections from people who seem to have no idea what their coins are worth (and have no idea where libraries are, or how to use the Internet for anything but naked pictures and Facebook.) I've witnessed buyers straight up LIE to people...saying the price of silver was about $10 lower than it was...and THAT I have a problem with. I could never be that kind of buyer. But they exist. I would have to be the buyer that says, "This what I think you have. This is its current market value. This is what it costs me to operate, to buy, appraise, and sell your coins for you. This is an adjustment for my taking the risk that your coins may be counterfeit, cleaned, or in some way undesirable. Here is a fair offer...are you interested?" I think that would be the only way I could live with myself in that job.

So that's how I feel about the issue. I can't judge someone who has much different responsibilities than I do. However, to respond to what others have said:

If a friend of mine told me they'd sold an 09SVDB for $20, I'd be ****ed at that dealer and probably go in there feeling hostile. I would try to cherrypick the heck out of their stock. (Which raises the question, is "revenge" moral?)

If a friend of mine told me they'd asked for $20, and the dealer gave them $470 after explaining what it was, I'd feel better. I'd say, "I would have told you what it was worth" and give them slack for not contacting me...but I wouldn't be mad at the dealer...because my friend at least was told what he/she HAD, what it could be worth if genuine, and what the dealer thought was a fair offer. I would say positive things about this dealer. THIS is how my local coin shop operates (at least in the countless transactions I've witnessed.)

 

Also - one last thought:

The hypothetical person has displayed their obvious ignorance on the value of the coin they present to the hypothetical dealer. I do feel this is different from buying a coin from a dealer, where the seller is selling from a position of education/knowledge. Buying the coin (if authenticated through your knowledge) for $20, IMO, would be like buying it from a 4 year old. I feel there wasn't (in your example) an explicitly stated request for help or information, but it was absolutely implied.

Yes, the seller has many resources to determine the value of his item - but he chose one of them in walking up to the dealer's table and looking confused. Many people don't like to admit they know nothing on a subject, many people still like asking another human being for help/information. I think in the end I will side on the side of educating the seller and making a reasonable offer that allows for a profit for the dealer without taking advantage of the seller. It's not always about making a profit by whatever means necessary....but that's why I'm an artist/teacher and not a Wall Street investment banker or politician.

 

I'd be highly suspicious of the deal, as described. I know it's all hypothetical, but why would a guy come in with a single valuable coin, show ignorance of its value but still ask for 2000 times its face value? I would suspect he was scamming a fake coin.

On the other hand, if he brought in 20 average 75-150 year old coins with maybe a face value of $30 (and the 09SVDB was in the lot) and asked for $200 for all, I'd be more inclined to believe his story. In that case I'd evaluate the coins individually and make a fair counter offer.

 

I would inform the person of what they had and offer them a FAIR price for their coin. Other wise it would be RIPPING THEM OFF!!!!!!!!!!!!

 

What if your at a flea market and there selling a 09s VDB for 20 bucks and you knew it was real (for some reason) and it wasnt a fake..... would you buy it?