Where do rolls of proofs come from? Is the answer the obvious one of: "well, they buy a lot of proof sets, take 'em out, and roll 'em" ? But who wants that? The thought of a proof coin touching another one makes me think that extra marks are inevitable, no? Or am I not getting the picture at all? Educate me, please
It's the obvious answer but the wrong conclusion. Most of these rolls are generated by the big wholesalers who buy huge quantities of sets usually at a premium to bid. Some even used machinery to break up the sets. I've actually seen entire roll bags of proof coins. Many people assume these are lower quality than proof set coins still in the set but this isn't true. Since most of these coins are destined for retail they will pull out and spend all the substandard coins which can account for nearly 10% of mintage in some instances. Of course they also remove the top one or two percent for slabbing so you won't be getting any MS-70's in rolls either. The average quality is actually higher than proof set coins. This is the source of most of the proof coins seen in circulation. Usually the dates you see is a proof set which just dropped in value to a price that's lower than the sum total of the coins in it. When this happens this date will recieve more busting than most other dates. You'll very rarely see a date where the set is worth more than its parts. When you do it's usually because a collector cut a set for a specific coin or one inadvertantly got into circulation. But the vast majority of the proofs in circulation were spent intentionally by wholesalers or collectors.
Thanks for your detailed answer! But it brings more questions Why at a premium? Can't they get all they need from the mint? (I haven't seen any upper limit on orders) Spend them ?!?! Wow -- another surprise! Which proof sets are that low? (I've seen, e.g., market value for some proof sets to be pretty low -- e.g., 1987 -- but I've never seen them below, say $3 -- and proof sets before 1999 or so have less than $1 face in them, right? Am I missing something?) And, also, again, my original question: if coins are together in a roll, wouldn't that cause slight scratch marks at the highest point of contact? (Certainly more than the "slide marks" of the plastic in Dansco albums, no? Thanks for the info . . . teach me more!
For a newbie, you ask good questions. I wish I could answer them. I have hundreds of proof sets but no proof rolls. I guess I always thought the same thing but never really verbalized it.
By "bid" I'm referring to the Greysheet which is the pricing guide used by dealers. Most of the sets being destroyed are older sets that are no longer being made by the mint and wholesalers have to buy these on the market. There are usually plenty of offers to buy at bid or near bid so to entice dealers to actually sell their sets the wholesalers will offer an even higher price. This will assure the kind of quantity they seek. There are large numbers of current date sets being broken up as well for existing collections. Wholesalers will do this as will collectors. There's usually a higher set premium (price of set relative combined priced of the coins) for brand new sets and this does encourage collectors to buy retail rather than cut their own especially if they desire only a single coin from the set. But, yes, if dealers need the current date they'll get them from the mint in many cases. There's not much demand for cull proofs. It's too risky to just sell these retail because customers will return them. This means a lot of these just go into the till or to the bank. Of course some of these can be sold but dimes and quarters have especially weak markets. It's not an issue of them selling for less than face value but for the set to sell for less than the combined value of all the coins in it. The sets get cut up because the singles are easily retailed. But any set with a large premium to the comnbined value is expensive to cut because this premium is unrecoverable; you have to sell the singles based on the singles price, not the set price. If the set price drops low enough then there is an automatic profit just by cutting up the sets because the coins total more than the set. No, not really. They have to be handled carefully and there could be tiny marks put on them. They become more susceptible to damage in most cases but they aren't really degraded just by being removed and put in rolls. Obviously you'd never want to put a 70 in a roll but it just doesn't really have a discernable effect on the majority of the coins.
It happens. Dealers usually buy back of bid. Meaning under Greysheet bid. This gives them more room to work with. If another dealer is looking for something and paying bid one can still make a few bucks. I work in a shop and my boss is ALWAYS buying. We wish he'd just say no more often honestly. If someone walks in with 5 1972 sets he'll buy them even though wa already have about 100. We don't need them so he may go 30% under bid. Well, that can be less than face value at times. Funny thing is it's not like he does it on purpose. We'll be putting it away later and realize we gave someone $1.75 for $1.91 face. Wish I could talk him into making rolls though. I'd have so much more room to work with in the vault.
You're more than welcome. It's different with every dealer but we try to be up front about it. You'll often hear "my offer is going to insult you" at our shop but that's just the way it is. One can always say no to the offer. It's a business and supply and demand play a huge role. My boss has been at it for 42 years so we have a lot of supply that we wish people would demand. On a slow day we'll frequently do more business with other dealers than collectors on the selling end. They need it and we have it. Ship it off!
that is why i only buy from u.s. mint. you have changes to make money. you buy it from dealer. and next week you sell that one back to them. you losing half of it. not only that. some people not aware of. even sell it below face value. no wonder dealer become rich overnight.
Phil Ham, Clembo, and Cladking thank you for all the info about the coin business. I imagine you who work in shops and/or own a coin business are still private collectors. It sure opened my eyes as to what we individual collectors have to compete with. Is there still the love and respect for coins and collecting when you are in the business? I mean is there still the appreciation for well made and designed coins and currency when you work with it everyday? I'm sorry that's a dumb question because I loved the electronics career that I worked in and NEVER lost the respect and interest for it. I always pictured coin dealers as hustlers out to take advantage of the uneducated person who steps into there shop hoping to fair deal, HA. Well you guys showed me ther are honest caring people out thgere. THANK YOU for sharing with me.
i really like to buy and have some rolls of proof kennedy half dollars or statehood proof quarters. but i never did. because i don't trust people transfer those proof coins from mint plastic case to assemble it into a roll. who knows what will be the outcome during transfer. like fingerprint, scratches, dirt, or even some fall.
Sorry Elaine but this happens on rare occasions. At least I admitted it does. Dealers get rich overnight? If this were the case, and believe me it isn't, there would be a lot of rich dealers. Heck, with what you seem to have spent in the past few years you could have thrown up a brick and mortar and be a gazillionaire by now. There are two sticking points on proof sets actually though. 1) They may actually be bought for less than face but number 2 is more important. 2) Many proof sets tank on their own even on a retail level. Take a look at a Coin Prices magazine and see how many sets RETAIL for less than original cost. It's not just proof sets either.
I didn't address this adequately, please let me try again. Storage in rolls is poor for the long term. If the coins are loose in the roll them movement and even vibration can cause degradation. It's important, especially with proof rolls, to put in a spacer so that there's a little pressure on the coins so they can't move relative one another. Orienting them all obverse up will also help protect them. But if the proofs are handled carefully it will not leave marks on them. It's very important to not put fingerprints on them but these guys will either wear gloves or wash their hands and handle the coins by the edges. I don't know what you'd get if you ordered a roll of proofs from a dealer as I've never seen such a roll. Quite possibly it would not be pretty. But the rolls that wholesale on the market which is a far larger share of this market are nice clean rolls. I have seen many of these and they are nice coins. Of course this is largely just because the proofs made by the mint are nice and the coins are not much affected just by taking them out of the plastic and being placed in tubes.
I personally break up proof sets at the shop. Quite often we receive proof sets with cracked plastic, missing boxes, damaged packaging, and a variety of other problems. This really makes the set hard to retail as a complete, no problem, and not discounted proof set. We break the sets up and sell what we can as proof singles (usually the halves, quarters, and cents). The coins that don't sell after a period of time end up in rolls. The sets with no problems and complete packaging get sold as full complete sets at full retail price. This is the source of the rolls of proof coins I personally have around the shop.
There are a lot of sets that get busted up this way. It's not just the shops but collectors experience the same thing when a coin tarnishes in the set or the plastic is broken. Sometimes they'll just need one coin. No doubt millions of sets have been destroyed this way; one or two or twenty at a time. But when you see a bid for proof rolls in the Greysheet this is for nice clean rolls and most of these rolls are made up with many hundreds (or thousands) of sets at a time. There isn't anything especially unusual about the sets but they will have fewer of the really rare coins than average because the sets they recieve are often picked over for these. Where a variety might normally show up in every thousand sets these might need two thousand to see this variety. They usually won't be heavily picked over for gems though since many dealers still don't look for these. There's a perception that the mint and proof sets on the market are heavily picked over and this generally isn't true. The reason it isn't true is largely simply that these sets are getting busted up on a regular basis. Bad sets don't have a chance to accumulate on the market before they end up being destroyed. Obviously this doesn't apply equally to everything and all dates. For instance unattributed '70-S sm dt cents are getting very few and far between whether unc or proof in sets. These are still being found but the first dealer who gets them will probably spot it so they don't end up on "the cutting room".
