Coin Market Makers – Are You Dealing With Them?

Any seller can offer you a coin at a high price. But it takes a market maker to be willing to make a market for the coin and buy the coin back at a reasonable price as well.

If you are only buying coins for pleasure and price appreciation is not a factor, then by all means spend away and have fun buying coins. However, if you are buying coins for fun and with the hope of getting your money back sometime in the future, read on.

Recently I spoke to an older gentleman and an older lady. The discussions were unrelated, but both of these individuals had a lot in common. Neither knew much about coins, they were both seniors, and they had been buying tens of thousands of dollars worth of coins from what they thought were honest sellers.

One of the individuals who sold the coins to the older lady told her that the most recent coin being offered to her was an exclusive offer just to her, since she was a very good customer. However, she had limited time to respond before the coin was offered to someone else. The coin offered to the older lady was realizing an average of about $4,500 in the current market and there were multiple sales in this price range. The seller offered her the same coin for just over $10,000.

Another reader of the PCGS eCollector also e-mailed me last week. He mentioned that he spent a large amount of money purchasing Franklin halves from a dealer who strongly recommended certain coins as an investment. After some time went by, he contacted the dealer to offer him the coins back, and the dealer was just not interested in buying the coins back at any price at all.

Therefore, if you are buying coins hoping to get your money back or close to it in the future, ask the seller what they would pay for the same coin if someone was offering it to him or her. For the most part, real market makers will not hesitate to tell you what they would pay for the coin or will at least give you a ballpark figure.

Also, I strongly recommended to buyers when they purchase a single coin, they should also do some research on it. For example, if anyone of the aforementioned individuals would have gone to PCGS CoinFacts.com, they would have seen how much their coins have been selling for on average. The lady who was offered a coin for over $10,000 would have seen all of the recent $4,500 sales and saved herself thousands of dollars in one purchase. The gentleman who purchased all the high-end Franklin halves could have easily seen the most current market trends for the coins and probably wouldn't have paid a huge premium for them and saved thousands of dollars.

If you find a dealer willing to make you a reasonable offer, then you might have just found a dealer you might want to deal with from now on. Keep in mind, anyone can offer you as much as 100% of what you paid for the coin but the individual may not be a reputable and or respected dealer. On the other hand, a well-known and reputable dealer may offer you 70% of what they are selling the coin for, but you know their word is as good as gold.

Additionally, some dealers may offer different buy-back percentages. They may have more costs involved in doing business than others and it may well be that offering to buy certain coins back at 90% is just not worth their time.

Furthermore, when a dealer does offer to buy a coin back, it usually means at that moment only. This does not mean you can come back in a month and ask for their buy-back offer. In a month, the price could have completely changed. What it does mean is that you can probably return the coin to the dealer on the same day for his offer. There are also a number of well-known and reputable dealers who will offer you a return privilege by either giving you a full refund, with or without a small restocking fee.

Finally, if you are concerned about your coins as an investment, always ask the dealer you purchase coins from if they make a market in the coins and what they would offer for the same coins if they were offered to them. Most importantly, always do your research, and if you're spending more than a couple hundred dollars a year on coins, you should definitely have access to PCGS CoinFacts.com.