Editor's Note: This is a two-part column on coins holdered by non-top tier grading companies. Part I provides background information on holdered coins sold in online auctions and Part II, tips to adjust for exaggerated claims of a coin's mint state and worth.
At the moment eBay still ranks as the largest coin auction portal, selling wares through thousands of listings worldwide nearly every minute year-round. However, as online buying becomes more popular, newer portals like Proxibid often offer better buys than eBay for savvy collectors ... and steeper pitfalls for newbies.
Since 2007, eBay has enforced strict policies concerning third-party grading companies, allowing certification to be mentioned only if coins are holdered by Professional Coin Grading Service (PCGS), Independent Coin Graders (ICG), American Numismatic Association Certification Service (ANACS) and Numismatic Guaranty Corporation (NGC) and its conservation service.
EBay has enforced other rules concerning how to list raw or certified coins by other grading companies, including bans on ascribing a dollar value in the title or description. Moreover, photos of the coin must be clear showing obverse and reverse.
You can read about these and other guidelines here. NOTE: eBay misspells Independent Coin Graders as Independent Coin "GRADING."
I am not proposing the same rules for Proxibid. That's a business decision it has to make. For the record, I have found Proxibid's customer service to be excellent with staffers ready to help resolve problems. Nonetheless I do think stricter listing policies are in the interest of auction portals, as current disclaimers favor auctioneers (many of them new to the coin trade).
I won't name the auctioneer or the grading company of this coin, pulled at random from one of Proxibid's auctions. (Click the image for larger version)
The auctioneer lists this 1957-D cent as MS67 "red" (the brightest luster) worth between $2,500 and $10,000. I would grade the coin's obverse AU55 brown with green spotting, rubs and hairline scratches. If I found it in pocket change, I would spend it.
Let's say you disagree, increasing mint state to MS63 red-brown. The coin's worth would average between 25-75 cents. An optimist might grade it MS65 red, worth $10.
Point is, the auctioneer has based his description on a hyped holder, overstating the value by as much as 10,000 percent.
If you have had similar experiences, share them in the comments section, including how you dealt with the situation.
In Part II of this topic, I will share tips to even the online playing field when dealing with coins in hyped holders.
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I can’ believe this coin listed as MS. I have spent better looking change! Nice job on posting alerts such as this.
Thanks
Michael…very good set of articles. The old adage of “buyer beware” must be adhered to when bidding on coins in all online auctions. Some inexperienced auction houses are just not adept at proper grading or coin photography while other auction houses are a deliberate disgrace in that they consistently over grade and misrepresent the coins they offer.
One of these days someone will finally have the guts to name names and the publicity will spread like wildfire and hopefully bring these auctioneers back in line.
Hiawatha, you’re right; and over the weekend, I have been debating naming an auction house that conducted the strangest estate auction ever. I might do this for Coin World or for Coin Update; in any case, I’ll have to name the auction house so that readers can verify what happened.
The house offered lots of junk gold–jewelry pieces, cleaned XF, etc.–and slabbed pieces from NGC and PCGS. The junk gold had been “graded” by men with label makers–MS67 here, MS66 there–with the auctioneer claiming “Red Book” prices in the tens of thousands. Bidders were paying $700-$1000 for coins worth $200. So when the NGC and PCGS coins came on the block at AU58, or MS62, nobody but me and a few others bid on them and took them under melt.
I’m still mulling over what this proves. If you, Paul and others can suggest somethings, maybe I can use that in my future column.
Thank you for reading Coin Update!