What am I missing here? Many numismatic companies I have dealt with do not properly or rigorously itemize items sold to them, they just list a lump sum; this was true with Steinmetz, Heritage, and a few others. Apmex does thoroughly invoice items bought and sold. How come? In a country with more accountants and lawyers than the rest of the world combined, why do many businesses operate outside the scope of rigorous accounting which serves many purposes?
Because not doing so also serves purposes. For one thing it's more work. And when dealers itemize a buy offer it gives the seller too many chances to argue about a specific item being worth more than what is offered. So not giving an itemized offer makes things go smoother, easier, as a general rule.
Thanks. Do you know what the law is on this? I would think the ANA, the PNG and other organizations have specific guidelines and rules for compliance among members as well as state and federal consumer compliance laws.
I have never heard of a law requiring itemization on an invoice. Its commonly done, but that is to ensure a customer understands a bill and will pay it. For all I am aware, there is no law requiring it.
No such law that I'm aware of. And no such requirement or guideline from the ANA or PNG either. If you want an itemized list, ask for one before you start. Otherwise it's gonna be pretty dang rare that you'll get one when you are selling any group of coins.
This may have nothing to do with what you all are talking about, but the new international accounting standard will be in effect and enforced within the next couple of years. Many corporations are already using it. Will this spill over to numismatics?
It should be done both buying and selling. This allows proper and thorough analysis of the actual deal. Lump sums may sound impressive but do not allow for proper consideration of what individual items are worth or cost. And it is greatly to the advantage of the the large dealer. Almost every time you ship coins to a dealer where prices were quoted based on average coins, or PQ coins, you lose your power in the deal. I have seen this over and over again. If you go to the coin show you have a lot more power but you may have to travel quite a distance which costs a lot of time and money. I could give many examples of this, I'm sure many others could too. When shipping coins you don't want to have them ship the coins back if the deal is changed but you should. Likely they will send them back slow boat, certified mail.
Owle - when push comes to shove what makes the difference ? You're either willing to accept the total price or you are not. I understand what you are saying because I've been there and done it. But in the end you're only gonna get 1 check for the total amount, so who cares if it's itemized. Now if you want to push it, then tell your buyer that you need an itemized list for tax purposes. You'll get one.
Let me give you an example: You ask what a dealer specializing in better date rolls of pre-65 silver coins is offering on each roll, and he gives a price range based on whether they are true uncs or sliders, or really PQ. When they arrive you never get a call even that was the agreement. Instead you get a check for the low end even though they were high end. By the time that happens the terms are murky because they have not been spelled out for the benefit of the seller. So, do you return the check ask for the dealer to return your coins, a very unpleasant circumstance for both, or accept this unbusinesslike activity as part of life? As I said before the "lump sum" deal, no breakdown of specifics is unfair in more ways than one. If you get audited you will have to prove cost basis, and on a coin by coin basis stretching out over 15 years or more this is very difficult to do....I guess it is unlikely to be audited because the tax authorities are almost completely out to lunch on coins, I have had the expert at IRS tell me they should be taxed at 15%. Wrong answer. Like I said before, we have more accountants and accounting programs than we need probably, why aren't we using them properly or hiring experts at it? For many years promoters of coins as investments have touted that there are no record reporting requirements for many tangible assets--translation, no need to worry about the tax authorities because they don't know. That argument morphs into because you are probably cheating on your taxes not paying the 28%, be glad that we are not giving you an itemized record of your sales to us because a receipt is how they would know.
Well, business can be done however two people wish. Who are you to dictate the terms under which two people do business? What you prefer does not mean that I prefer it, so why is it "unbusinesslike"? Every day deals are still done in this country with a shake of the hand, no paperwork at all. Again, business is done how someone prefers, there is no "right" answer. Regarding the taxes on coins, it depends on the nature of the coins, does it not? Maybe your tax expert was thinking of junk silver coins, which can be argued to not be subject to collectible cap gains rate, but ordinary investment income cap gains. Chris
Any dealer who ups and writes a check without verification that the offer is acceptable to the seller is not to be trusted. Sure they can argue that a binding offer was extended prior to shipping the coins but there still has to be verification both parties agree on the buyers assessment of the condition (grade) of the coins.
Owle I completely understood before you ever gave your example. Like I said, I have been through it myself. But that doesn't change anything. You see, I knew what was going to happen before I went through it because it was my responsibility to know. That's where people in situations such as the ones you describe make their mistakes. They forget about their own responsibilities. For as one of two parties in any business deal it is your responsibility to know what is going to happen, meaning the progression of steps in the course of the deal, before you ever enter into the negotiations. Instead, people make assumptions that this will happen just this way or just that way. And because they make assumptions they don't ever ask questions, let alone the right questions. So they end up having expectations of how things will play out. Then when they don't play out that way they cry foul. But there really is no foul. Why ? It's pretty simple really, there is no foul because it is the responsibility of each party to try and do the best they can for themselves in any business deal. And if you're on this side of the fence and other guy is on that side of the fence then whatever happens on the opposite side of that fence somebody is going to say - that's not fair. In other words what you see as fair for you he sees as foul for him, and vice versa. So what you need to do, what your responsibility is, before you ever enter into any business deal, is find out what the steps of progression in that deal are going to be. And if you don't, then shame on you for not knowing that you needed to do that. It's just like everything else in life. If you don't know how to do it before you ever start then you should not be trying to do it. Because if you do, things are probably not going to turn out too well for you. You cannot make assumptions. You cannot have expectations. You need to know what is going to happen before it happens. That is your responsibility.
Ways to avoid "misunderstandings" in coin business deals: Itemize all coins with as complete descriptions as possible. If they are being shipped to the "highest buyer", fax him/her a sheet(s) describing as completely as possible the terms of the deal. Insist on a call when they arrive, with specific pricing on all items to be verified on arrival.
I have no qualms with that at all. Sounds very prudent. I agree with Doug, in that assumptions on how the deal will be made on the sellers part is many times the holdup. A seller should simply ASK the buyer how it will proceed, and act accordingly to protect his own interests. Your plan does a great job protecting the sellers interests. OTOH, I have had people send me a big pile of coins, I made them an offer they liked, and then sent them a check. They were happy as heck with it. Different strokes.
Sounds like you are more ethical than most, and many companies are either now in compliance with basic rules of business or will be cleaning up their act. Maybe the ANA could run more courses on business ethics and/or contract law. For those who play by the old rules, I think I will start a new coin business called "Shyster and Shylock, Coins; a division of Archimedes enterprises (he invented the screw)".:smile
When I send coins off to a dealer to potentially purchase, I make an itemized list of each coin to be included in the shipment. Beforehand, I make sure the dealer will quote me a separate price for each coin listed, with the proviso that I am free to accept any, all or none of his offers on the various coins. If he is not willing to do that, then I won't send the coins to him. Getting your ducks in a row PRIOR to shipping eliminates any misunderstandings.
That makes a lot of sense. But large volume buyers know all the tricks. Here is another example: I sent some PCGS and NGC certified coins to Nachbar, you know, the guy who each week in Coin World has bright, bold, self-aggrandizing ads on how he pays more than anyone, and even regularly gives bonus checks because it is "the right thing to do". Probably some people who have huge collections have a good experience with him, but I have heard others who have not been happy. I sent him the following coins: a PCGS Walker, 1944-S MS65. It was a no problem coin, lusterous and attractive, maybe not 100% full strike, but nearly. He offered MS64 money, GS bid saying it was not a true 65. An 1884-S $20 NGC62. He offered MS60 money, saying in reality it was not a true 62. Third coin was a $10 Indian I had bought as a CU from a large wholesaler. He offered around melt on that saying it had problems when it was AU58 at worst. He got really angry when I refused the deal, spouting off about what an expert he was, blah, blah, blah. My guess is he has pulled this crap on many people. Supposedly he was retiring a couple of years ago. We are still waiting for him to at least honor his word with that promise!
Sounds like a pretty terrible dealer. I am glad you itemized and dealt individually on each of the coins with him. Listen, my example earlier was just showing business can be "done" in a variety of ways. There is not only "one" way. However, if you do not know the other party, and have individual high value coins, then the way you advocate Owle is the preferred method for seller safety. I would simply add that communicating with the buyer beforehand also smoothes out the process, letting both of you know what to expect. Chris
Yeah, he played up that retirement big for several months. Guess he changed his mind. When gold and silver shot up, he was blowing off about how he advised everyone to sell him their rare coins and buy PMs. My general rule of thumb is that if someone takes out full page ads in Coin World to tell you what a great honest guy he is, he generally isn't.
