By Dan Sowards, Numismatic News November 11, 2009

I recently decided to retire next January after 38 years of working for the same employer. As is the case with many of us, I simultaneously decided to dispose of most of my coin collection.

This was not really a heart-wrenching decision, since I am financially able to keep some coins with sentimental value to me such as my PCGS MS-66 1950-D nickel.

My reason for writing to you readers is really two-fold: (1) ensure that if you are indeed a coin collector (notice I didn’t use the term “numismatist,” as I’ll detail further into the article) that you enjoy your coins; and (2) point out the financial pitfalls that can be associated with our hobby.

I can assure all that I have thoroughly enjoyed my hobby and my coins. Like many of you, I started collecting when I was around 10. That would be 1957, if you are interested. As a teen-ager, the local bank let me and one of my friends use one of their back rooms to go through bags of pennies, nickels and dimes to fill the holes in our Whitman folders. My friend actually found a G-VG 1916-D Mercury dime during our time at the bank.

We were both into football, and we finish first and second in our graduating class, so by the time 1964 rolled around neither of us had any time to continue this practice. In 1970 I was awarded a Rotary International Fellowship to study microbiology at the Swiss Federal Institute of Technology (the ETH for those who know German). My father had owned a Ben Franklin 5-10 Store since 1950, but was having major financial difficulties, so before I left for Zurich for the year, I sold both my coins and my very fine British Colonial stamp collection and gave him most of the proceeds.

I didn’t begin collecting coins again until the kids were grown (mid-1990s). I decided to limit (if you want to call it that) my interests to Buffalos, Morgan CCs, Standing Liberty quarters and Lincolns. Of course, like most of you, I also purchased some U.S. Mint products. As time passed, I would tinker with my collection, adding new coins as finances would allow. I thoroughly enjoyed my coins and purchased a number of books on Morgans and Buffalos in particular. At the same time, in the back of my mind, was the thought that when I decided to retire, the value of my coins (up, down, sideways) would be a small cushion in retirement.

I mentioned that I obviously consider myself a coin collector and not a true numismatist.

Although I read about my Buffalos and Morgans, I really didn’t study hard on the nuances of coin collecting, such as what cleaned or whizzed coins looked like. (I know, I had to look this up on the Professional Coin Grading Service Web site. I suggest everyone do this.)

I purchased coins from various ads in Numismatic News and in person from local and regional coin shows. I was never able to go to one of the national/international coin shows – wish I had. If on occasion I received a coin that didn’t appear to be the grade I had purchased, or was dark as opposed to what I considered a decent looking coin, I returned it. These were not many.

Some of the coins I purchased were certified Morgans, some certified Buffalos, a handful of certified Lincolns and Standing Liberties. But most of my coins were raw. With few exceptions, the Morgans were all certified. Most of the Buffalos were raw, ranging from VF-MS-66, with most falling around the XF-AU where the values ranged from $150-500 or so. Same for the Lincolns and the Standing Liberties. So, the value of my collection was considerable for me. But the coins I collected looked fine and again, I enjoyed collecting them.

In July a major international coin auction house was bringing staff to Austin, Texas, (where I live). That Saturday morning I took roughly $25,000 worth of my coins over to have the representative check them out. He was able to spend about 20 minutes with me looking over a handful of the coins. He said his firm would be very interested in handling the sale of my coins. I thought about it and decided to go with it, since I was quite familiar with their name and the prestige of their auctions. He kept the coins and we signed the papers. Later the next week I mailed him another $11,000 worth for the auction.

Keep in mind I had never attended a coin auction, nor had I ever purchased coins from either an auction or the Internet. I was totally naïve about the process. So far, two of the auctions have been held – one for coins they valued at less than $100, which were put up in a sealed bidding process. Out of a total of 350 coins I submitted to them, this encompassed more than 160! Another 28 were sold this past weekend during a three-week on-line auction.

In between I had a number of e-mail exchanges and phone conversations with the staff person handling my account. What an education. He was quick to point out that many of my coins had been “cleaned.” A few were over-graded, but that was not the serious problem. Two rather expensive items had been whizzed, one of which was also re-tooled. In all, 39 had been cleaned (mostly the better date Buffalos), one corroded, one corroded and damaged, five scratched, and two laminated. I was aware of several of the cleaned coins and one of the corroded coins (’37 three-legged) because the firm I purchased them from was up front about it. However, since I’m no expert in what a cleaned Buffalo or Standing Liberty looks like, I was flabbergasted that major coin retailers would have done this to their customers. Consequently, some rather valuable coins (for me) had been placed in the sealed bid auction. I lost my shirt on that one!

On the other hand, the coins sold on the company’s Web site during an auction sold at reasonable prices – some even higher than what I paid for them. I shall add that more of the better coins are also scheduled for another auction and some more for an on-line auction. A handful of the remaining coins will go to another sealed bid auction.

Of the coins I purchased sight unseen, at least 95 percent were purchased from major firms. I should have educated myself about defective or cleaned coins before spending that kind of money for the coins. All I can say to the rest of you is “caveat emptor,” – buyer beware. Either be satisfied with the coins you receive, and enjoy them, or send them back.

I won’t exactly lose my shirt due to the value I had in the certified coins and a few others that sold at respectable prices. I hope the additional two auctions coming up with be as successful at the 28-coin submission. However, a good number of rather expensive coins (for me, anyway) sold for a mere fraction of what I paid for them because they had been over-graded or cleaned. This hurt, but there was really no one else to blame except myself for not being well educated in the hobby and for being so trustful of these firms. Further, I indeed enjoyed my coins. So what more can I say?

Enjoy your coins, but don’t buy them as an investment unless you are purchasing very high end, certified coins, or you are truly a numismatist and have spent time to really learn this fine hobby’s ins and outs. Advice from experience and hindsight!

If you had coins valued at $200 or more, and you are not wise to such practices as cleaning, it only costs $10 to have them certified. It is also a service for the auction house, which is able to leave the “official” determination to a third-party.



Dan Sowards is still a coin collector in Austin, Texas.

Viewpoint is a forum for the expression of opinion on a variety of numismatic subjects. The opinions expressed here are not necessarily those of Numismatic News. To have your opinion considered for Viewpoint, write to David C. Harper, Editor, Numismatic News, 700 E. State St., Iola, WI 54990. Send e-mail to david.harper@fwmedia.com.

More Resources:

• Standard Catalog of United States Obsolete Bank Notes 4-CD Set, 1782-1866

• Fascinating Facts, Mysteries & Myths About U.S. Coins

• 2010 Standard Catalog of World Coins 2001-Date, 4th Edition

• State Quarters Deluxe Collector's Folder