Comparison bidding

Increasingly in online auctions, bidders are paying hundreds — and sometimes thousands — of dollars more than a coin is worth, simply because those buyers cannot grade and so go with whatever the seller states about the coin.

In October, I wrote about “Ludicrous lots and uninformed bidders,” noting, “Slowly, as the hobby shifted from coin shows and shops to eBay, HiBid, Live Auctioneers, and Proxibid, among others, I have seen increasingly bad bids by novice buyers and hyped descriptions by uninformed sellers.”

It is one thing to pay $100 for a silver melt coin worth $25 and another to pay $1,000 or more for a coin worth $100 or less.

By comparing desired lots to ones professionally graded by PCGS or NGC, you can get a good feel about whether the coin is worth a bid and, if so, the maximum you should bid.

Grading is difficult if you haven’t read numismatic books like those offered by Whitman Publishing. You have to know:

• How to analyze fields and devices of the various denominations — each with its own criteria — to assess strike.
• How to assess wear on high points of fields and devices, aligning that with designations of the 70-point Sheldon Scale.
• How to gauge luster and eye appeal.
• How to detect numerous flaws or issues that impact grade, such as cleaning, wiping, dipping, scratches, polishing, artificial color, jewelry marks, PVC damage, environmental damage, and more.
• How to do all of the above based on the typical subpar or manipulated photos on HiBid, Proxibid, Live Auctioneers, and eBay.

That last item — online photographs — has become the biggest drawback when bidding online because, increasingly, sellers are using Photoshop and lighting to guise the real condition of coins, as I noted in this post.

Whenever you win a lot whose photo has been enhanced or manipulated, never bid in that auction again. The same goes when sellers only post a photo of the obverse without reverse or whose photos are blurry or too good to be true (especially with toned coins).

You just can’t trust the seller or the coin’s condition.

But what about those rare coins you need for your collection? I understand that you don’t want to pay for holdered coins offered on Great Collections, Legends Numismatics, Stack’s Bowers, and Heritage. After all, you’re browsing online auctions for a deal or a steal.

Good luck with that.

So let’s consider some recent examples of flawed coins and how to assess their real worth by comparing those lots with professionally graded ones by PCGS and NGC.

I use PCGS CoinFacts for recent auction prices at major houses. Go to the desired year and click on the “auctions — PCGS graded” — which also includes NGC holdered coins.

Here’s the rare 1893-O Morgan dollar, with a small mintage of 300,000, with 29,960 surviving due to loss or melting. An almost Uncirculated sample, AU-55, is worth $2,100, jumping to $12,000 in MS-63.

I’m not sure what the “closely” means, but this is not Uncirculated by any means. It’s worn, cleaned, overly dipped, and has a pin scratch or gouge above the “D” in “DOLLAR” on the reverse.

Let’s compare the obverse with an NGC EF Cleaned Details 1893-O (cert: 6329196). That sold for $504 with the buyer’s premium on Heritage.

The NGC coin on the right is more desirable because it is lightly cleaned and not overly dipped. The inferior coin on the left sold for $650 or $747.50 with the buyer’s premium.

That’s $243.50 more than the buyer of the NGC coin paid. Here’s an even cheaper PCGS cleaned lot that sold on Heritage for $456.

Here are two other sample comparisons to show you how to assess price and condition.

The coin on the left was described as Gem BU, or MS-65 Uncirculated. It is hardly that. It may have been cleaned, but the marks on the cheek will likely earn an “altered” details grade from PCGS. Now, look at the PCGS coin on the right. It sold at Stack’s Bowers for $1,200. If you won the HiBid coin at $1,700 (the lot was passed, and rightly so), you would have paid $1,955 — or $755 more than a better-graded coin at a respected major coin platform.

The 1904 Morgan below has a mintage of 2,788,000 with a survival estimate of 279,000. At MS-66, it retails for $5,750. Let’s compare a HiBid example with a PCGS one.

I would grade the HiBid coin as AU Details, cleaned, dipped, pin scratch on jaw, and rim marks on cheek. Now, look at the PCGS MS-66 coin on the right. There is no comparison when it comes to grade, wear, strike, and superb eye appeal.

View an AU Details NGC cleaned and scratched 1904 coin, to the right, and compare with the HiBid one.

The NGC coin on the right sold for $49 on Heritage. If you still wanted to bid on the HiBid coin, I wouldn’t go higher than $50, which would cost more than $75 with the buyer’s premium and mailing.

We’re living at a time of inflation with hobbyist dollars hard to come by, so make your dollar count when bidding on dollars in online auctions. Compare. Research. Read. Learn.

As a gauge to my own buying, I only bid on and won one coin in the past 45 days. There simply weren’t any raw coins worth bidding on of late.

This 1882-S was listed as MS-65:

I felt the coin might be MS-64+ with good color and eye appeal. When bidding on HiBid, unlike Proxibid, you don’t know if the seller sees your maximum bid. Well, my coin sold for the maximum, $47.50.

With the buyer’s fee and mailing, this coin cost $70. If I wanted to slab it, I’d be paying a total of $110. When I saw the coin in hand, it was probably MS-64. So I won’t send it to PCGS. You can get a similar slabbed coin for that price at any major auction house.

I will put the above coin back in consignment. I’ll probably lose $10-20 after paying selling fees, but that is worth it to show you here the difficulty of online bidding.

❑

Follow us on Facebook and Twitter!