Coin Auctions: The Good, the Bad and the Ugly
When you first start getting serious about coin collecting, it is inevitable that someone will direct you to the auction circuit. Auctions, online and live, have positives and negatives. You need to decide on the types of auctions you are interested in. The risks and benefits of auctions held online differ significantly from those that are live.
How Online Auctions Work
Online auctions are a big risk, but they sometimes pay off with big rewards. The trouble is that you never really know what you are going to get until after you have paid. Online sellers take pictures of their coins, but the angle of the shot and the lighting can dramatically change the appearance of wear. If a coin is listed as mint, you want to make sure that is the actual condition. Small differences in wear make a big difference in price. No matter how skilled you are at grading coins, pictures can be deceptive. Other potential online auction frauds include:
- Counterfeiting – While a counterfeit coin will occasionally avoid detection in the regular collectible market, online it is almost impossible to tell. Some online sellers post stock photos as part of their listing, rather than actual pictures of the coin in question. This makes it much easier to pass off a counterfeit coin. Super rare and valuable coins must pass heavy scrutiny, but a coin valued at less than $1,000 may slip under the radar.
- Substituting Coins – If the seller has multiples of the same coin, they may only post the photo of the one in the best condition. If the image is low resolution, the image alone will not be enough to make the switch visible. Plus, it is easy enough for them to apologize and “fix” their mistake. Most collectors will not realize the error for months, if not years, making it an easy fraud to perpetrate.
- Non-delivery – The most basic online fraud, not limited to the numismatic industry, is simple non-delivery. Essentially, the person selling the item never ships it to you. Maybe they ship you the wrong coin entirely, maybe they ship you nothing at all. It does not matter, since they walk away with your money and you never get the coin advertised.
Live Over Online: Every Time
A live auction does not remove the possibility of over-graded coins, but there are no substitutes and coins change hands immediately. Plus, you can see who you are dealing with. Many live auction coin dealers depend on their reputations to stay solvent. Ripping off customers costs dealers more than it makes them. Nonetheless, it is wise to develop some skill at grading, for yourself. This will help you avoid the worst offenders. In a live auction setting, you get to see exactly what you would be buying, before pulling out your checkbook. This is a distinct advantage over online auctions, where you see what the seller wants you to see.