Stay Tuned/Philately and Numismatics

From Eccentric Flower


stay tuned

Philately and Numismatics
16 April 2007

When I was a (somewhat nerdy) child, I collected stamps. Unlike some of my other fads and hobbies, this one actually lasted a few years. None of my stamps was worth much, and I didn't really care - I liked looking at them. I collected them for the sheer joy of it, which apparently is a retrograde sentiment these days.

Everyone has an ulterior motive now. The people who collect baseball cards, for example, in a distant day, were kids who just liked accumulating them. That's long since changed, and now the only people who seriously collect baseball cards are all, in essence, baseball-card speculators.

Heck, we've even encouraged this with all those "collectible card games." Sure, I understand there are some people who actually liked playing Magic: The Gathering for its own sake - probably quite a lot of them - but I can't shake the sensation that for every one of those people, there were three people putting them all in hermetically sealed albums and spending endless hours speculating on which ones would pay their retirement fund.

And I haven't heard of a kid who collected stamps in many years. It's passé. Old hat. Dull. No moving parts. No bells and whistles.

(Am I sounding enough like I'm ninety years old yet? Well, it's only because the world is going to hell in a handbasket. Nothing new there.)

Anyway, once upon a time people did occasionally collect stamps for fun, but that's no longer the case; people who collect stamps now do it as a sort of low-rent investment. And I always felt that way about coin collectors. Maybe I have encountered an asymptotic bunch of coin collectors over the years, but I've never met a coin collector who was in it for the fun. Those folks are about return on investment, plain and simple.

This is why coin and stamp scams will never completely die. There are simply too many people in the world who feel they cannot afford the $3000 minimum buy-in for a Vanguard no-load portfolio, but who will happily play the lottery or respond to a stamp or coin offer that implies-as-strongly-as-the-law-will-allow that their puny investment now will be worth a fortune in thirty years.

For a while I had a moratorium on writing about them, and after this column I may well impose that moratorium again, but we've had a long hiatus and all that, so perhaps it's time for a refresher.

Two ads will suffice.

First we have an ad for a set of Sacajawea dollars, uncirculated, one for each of the eight years of issue. This set is available for fifteen bucks. Do not be fooled by the "Order Deadline" prominently noted at the bottom of the ad; it happens that I have two copies of this ad, each almost identical save for minor rearrangements and the deadline. I fully expect to see it again in a week or two with a new deadline - unless, of course, their supply of coin sets runs out, which may take a while.

Here's the thing: These coins are not rare. You should be able to tell immediately, because you have a functional brain, that it isn't especially hard to find a 2000 Sacajawea dollar floating around in the wild.

Since the coins are not valuable because of their scarcity, it all comes down to their condition. The PCGS site, which is apparently one of the best and most authoritative of online coin pricing guides, says that a 2000 Sac dollar of grade 68 ("Virtually as struck with slight imperfections") is worth $150 as of this writing. I am willing to bet you a fair bit more than eight dollars that the coins being touted to you in a newspaper circular are not that grade. I mention that price only because, for non-rare Sacajaweas, that $150 looks to be about the top of the line.

But wait - those are "regular strikes," i.e. coins intended for commerce. "Proof" editions of coins, the trial runs which usually have better detail and cleaner strikes, would strike me as being worth more ... but for Susan B. Anthony dollars and Sacjaweas, they're worth less. If our theoretical 2000 dollar were a grade 68 proof, it would be worth about thirty bucks. Which is still too high for our fifteen-dollar deal. So it's not going to be a high-grade one of those either.

Please note that the "uncirculated" is essentially meaningless here. Since these are not rare coins, which are the only coins which would have any real value after having been in circulation for any length of time, we are quibbling here on minor differences in clarity and condition of uncirculated coins. In other words: The "uncirculated" is a given. So don't count on finding a Sacajawea dollar that's worth even as much as $150 if it has been in general circulation for so much as five minutes; get it? That $150 dollar never saw anyone's pocket or coin purse. The high-end ones, the grade 69s and the rarer ones, may never have seen daylight or air.

Bear in mind always: The Littleton Coin Co. is not going to be losing money on this set of eight coins. Let us assume that for their fifteen bucks they are making a modest profit of a couple of bucks. Let's call it three dollars; that means they are selling each of these eight coins for $1.50. Even so, for non-rare coins, you are probably getting soaked; right now, even if these coins are in very good condition, I would be unwilling to pay more than a dollar for each of these dollars. And they're not - as uncirculated, they can't be as high as PCGS' grade 63, which goes about 4 to 5 bucks per coin ... so they have to be in one of the grades below that, the grades PCGS indicates with a dash, meaning, "We really don't care."

I'm not saying that the Littleton people don't have legitimate coin business. Their "secret sale" of rare coins, as of the time of this writing, has a 1936 buffalo nickel, brilliant proof, for which they conveniently cite the PCGS grade, 65. That makes it easy. PCGS says, if I am reading their chart right, that such a coin is worth $2675. Littleton is marking down theirs to $2925. This does not strike me as unreasonable.

In general, Littleton handles its online coin sales of actual rare coins pretty well; even a novice like me could immediately find all the information needed to get an honest measure of what the coin was worth and whether the price was a good one. This makes their circular ads all the more odious. The difference, of course, is that the people who go to their website are people who already presumably have some interest in coin collecting, whereas the people they're attempting to hook with their low-rent ads neither know nor care. They just want to get rich quick.

I can't tell which I dislike more; the coin company, for exploiting this tendency, or the suckers who buy in, for having such a rotten motivation to begin with.

Incidentally, and in Littleton's defense, the Sacajawea dollars are being discontinued, so the value of an uncirculated every-year-of-issue set will only go up. This fact might redeem the entire ad - "buy now before they start to go up" - except that the ad is not pitched that way; it doesn't mention the end of the Sacajawea dollars, in fact may have first appeared before it was announced, and is worded vaguely wherever possible.

There's another good reason I'm not inclined to cut this ad any slack; we'll get to that in a moment.

Next we have an ad from the Mystic Stamp Company, offering "Three Classic U.S. Stamps FREE", allegedly in "mint condition" (which is an interestingly ambiguous designation for things which were not, y'know, actually minted).

As it happens I know all three stamps - a three-cent Lincoln of 1927, a two-cent George Rogers Clark, and the three-cent "Win The War" stamp, 1942 issue. Nowhere does the ad say the stamps are actually valuable; it doesn't tout anything like that at all. The goal, says the ad, is to get you interested in stamps.

Stamp value sites are a little less penetrable than coin sites. Many of them seem to be behind a pay curtain or are not very useful in one or more ways. I'm not really interested in doing the legwork. Suffice to say that as a child I had two of these stamps in my collection; I remember them. You be the judge of just how valuable they were; and remember, Mystic Stamp really is giving them to you free.

If you're cynical enough, you will be asking now, "What's the angle?" If you're not asking that, you need to read more of these columns.

The fact is, by sending in the little coupon, you qualify for Mystic Stamp's "on approval" program. What that means in English is that they send you some number of stamps at periodic intervals, and if you don't send them back within a certain amount of time, you are billed for them. While this is not a scam, it does not work to your benefit; I'm sure many consumers end up paying for stamps they don't want or need under this system. I also note that nowhere on Mystic's website can I find details of just how often they send stamps, how big a lot they send, or what the usual cost is.

Here's the funny thing: The Littleton ad has a plan like this too. Yup, you buy the set of eight coins and you are automatically approved in their Free Examination Coins-On-Approval Service. Littleton's site is ever so slightly more forthcoming about their plan, but still doesn't say what the size of an average shipment is, or what an average bill would be if you chose to keep (or neglected to return) all the coins in it.

I find this very dubious stuff.

Fact of the matter is, when I set out to write this column it was with a view toward history. I have seen a definite decline in bad coin ads over the last few years, and I'm willing to bet I can tell you why: The web. It took me all of thirty seconds to find any number of places online to get a real valuation for my coins, and had I bothered to prod a little deeper, I don't think I'd have had any trouble finding values for those stamps either.

I think this is what's killing the "special edition" (read: not minted by a government as legal tender, so just a lump of carnival doubloon) coins I used to see all over the back of Parade, or some of the other more blatant scams. Even Grandma has a clue about how to look up these things now.

But the old, old pay-on-approval business still must drag in enough pigeons to justify the cost of these newspaper ads - enough that Mystic can afford a certain modest amount of loss-leader on those stamps. Hell, maybe the Sacajawea dollars are worth as much as two bucks each on average and Littleton is eating the cost.

If so, that tells you something right away.

Remember, there is no such thing as altruism in this universe. The company that takes steady or consistent losses is the company that will fail. The profit doesn't have to be big, but it always has to be there, or they die. Whenever you see something that looks like a deal, always start looking for the reason that it actually isn't.

I realize you probably already realize that. But it looks sometimes like the rest of the public could use a refresher.

and now back to our program

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