Selling Back 40% Halves: What Percent of Melt is Typical?

Hi,
I was in a local bullion shop today and asked them how they would go about buying some 40% halves (I've never sold coins for bullion value before, so I'm still trying to figure out the formulas and how this all works).
They said that they pay 70% of melt, which today when spot was around $19 would have been about $2 a coin.
Is this a typical percentage to expect buyback? Is 90% junk silver the same?

I guess intuitively I was expecting an offer closer to melt since I thought margins were really tight on bullion.

Appreciate any insight or what your own experiences have been.

Thanks!

 

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That is probably reasonable as they will pay refiner fees if they can't resell as coin silver, and depending on the quantity they send in. A person that I sometimes authenticate for on the coin side said that 70% is breakeven, which he doesn't like, so he offers under 70% always, and won't take 40% except for counter bins. I am sure shipping, insurance, etc. will vary also in their calculations.

 

For a coin store that seems about average.

The online dealers will pay more but one usually needs to sell large amounts to get that price (i.e. $1000+) and consider shipping expenses.

https://www.providentmetals.com/1-face-value-40-silver-us-kennedy-half-dollars-295-troy-ounces.html

For example, Provident is buying back at 2.675 per coin as of this posting.

 

Also, you should expect closet to melt for 90%...that is more popular among stackers and refiners compared to 40% or 35% and thus it sells much quicker and more often.

 

I had a discussion with a coin dealer in Brunswick last summer about his problems when buying silver from collectors.

He showed me a huge bucket that he has to fill before he can give that stuff to a company that melts it. Otherweise, shipping costs and fees would be too high. Now the problem he told me about is that filling up this bucket normally takes a couple of months and that within very short time the silver price can of course go up and down.

So I guess that everyone selling silver to dealers should keep in mind that coin shops often take quite a risk when they offer a price too close to the melt value.

 

That is true, but junk silver is one of the items that sell very well at coin stores. Many people stack junk silver, so there often is plenty of demand for it. If a coin store offers a better deal on it compared to online companies, they should have no problem selling to customers. While they may not make much money off the junk silver, it could be a good strategy to appeal to customers who will potentially come back and buy some other items where the dealer can make money. For example, someone can be inspired by the designs, let's say Walking Liberty Halfs, and then decide to start buying graded pieces from the dealer. Suddenly there is a new relationship built and a new coin collector is added to the hobby.

 

Here is the top price I can find.

Spot -.80 X .295

 

I would agree with others. The buyback price of 40% and silver war nickels has always been much further from melt than 90%. It just costs too much extra from the refiner to get closer. 40% is not a good vehicle to invest in if planning to sell when silver goes up.

 

Yep, always buy 40% or 35% at a discount to melt, because you'll have to take a discount from melt when you sell it.

That said, the big dealers do buy back at closer to melt (like Provident, mentioned above), and I know there's one guy at our local shows who buys at a smaller discount than most stores (even at the same show). He gets most of my sell-back business. I could get more by going to Provident, but I rarely want to sell that much ($1000 minimum actual value) at a time.

 

Thanks so much, everyone. Your answers have helped me understand this much better.

 

Dealers will pay more for them because right now, they are worth more as a coin than they are as scrap silver. Refining 35% and 40% is a bit more of a pain with other materials inside, but if you are only buying and selling then as coins, then the extra effort of refining doesn't matter. A dealers need only worry about where to store them and not how to pull the silver out.

 

I think they pay less because its harder to sell them and when they do sell they wont get as close to spot for 40% as they do for 90%. Really I never wanted a 40% half unless I found it in circulation as could thus get it for 50 cents.

I doubt that there is really much refining/melting down of these coins. There is plenty of silver. No pressing need to melt these down.

 

Ok, I sold 3 tubes of 40% Kennedy's at 5.5xFace when spot was $19.15. Not a math guy, what percent of melt was that?

 

If my calculations are correct I got paid 97% melt when spot was $19.15. Does that sound correct?

 

5.5xface is good at that spot price. I think your math is close enough if not correct.

 

Yeah, I think I got the formula down.