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Law and Coins
AN EXTENSIVE LOOK AT THE LAWS
THAT GOVERN OUR NUMISMATIC
COMMUNITY AND OTHER TOPICS
OF INTEREST
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You Can Bargain Over Your Terms of Purchase
by David L. Ganz
Column 14 - November 16, 2000
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Here's something that every collector, and every seller of coins ought to consider. When you make a purchase from a professional rare coin or collectible dealer, and when that professional makes a sale, there are terms and conditions of sale that govern the transaction, even if the dealer doesn't have them on the bill of sale.
NumisMedia subscribers who make their purchases by mail know that the bottom of most advertisements in the trade press (as well as magazines) carry certain terms (for example, satisfaction guaranteed or returns permitted any time within 10 days or grading per B&D, or PCGS, NGC, etc.).
If the advertisement has no terms, some periodicals even utilize written terms provided as a service, which give certain implied terms, which are always published in each issue of the newspaper.
For example, Coin World says in any "buy" ad, "advertisers who do not state 'write first' in their ads are expected to return coins at no expense to the seller or trader" if the transaction is unsatisfactory.
On mail bid sales, "usual rules" for most newspapers and magazines implies that every coin offered is guaranteed unconditionally to be genuine and that a deposit will accompany bids. (That amount may vary, but if unspecified, typically is 25% of the gross amount).
But even without a newspaper's usual rules, there are certain implied terms or courses of dealing that nearly every collector can rely on when making purchases of coins, numismatic items or other collectibles.
Every coin purchased by you is warranted as being genuine. If it's not, you have a right to return it -- anytime. That's the custom in the trade. It's not in any lawbook, or in any regulation -- but it's the way that the coin business operates.
Many years ago, a client of mine (a dealer) was asked to take a return on a coin that had been sold by an affiliated or related firm that had been out of business more than 30 years. However, (to the public at large) it was promoted as one of continuous ownership.
My unqualified advice was that the terms and conditions of the trade demanded that if the coin was truly not genuine (i.e., a counterfeit or an altered coin) there was simply little else to say about the matter except to take the coin back and eat the loss.
Moreover, if a coin's surface has been altered -- by whizzing, or visually enhanced by chemical means -- the seller's obligation is to disclose this to the buyer.
Here, the ANA code of ethics merely sets forth long-term industry practice.
Encapsulated coins (slabbed items) generally aren't returnable because of fungibility -- even if you look at the coin and decide that you don't like the way that it looks.
The PNG code of ethics also reflects the general rule.
There are a number of other implied terms, but regardless, as a prospective purchaser -- especially in this market -- you can vary those terms if you bargain for them before you decide to make the purchase.
The way to accomplish this is to ask the seller to alter their standard terms, and then to specify what it is that you wish to have changed. Usually, it is best to have this done in writing, rather than orally, since it avoids subsequent disputes.
Typically, what you might wish to bargain for is more time to examine a coin or the right to submit it to a third party certification service, or even to have a third party authenticate the coin. (Usually, this would fall outside the return period).
This isn't as uncommon as you might think. There are many coins still out there that carries certificates or letters of authenticity written by Walter Breen or one or another expert who was willing to put their name on the line.
Or, you might bargain for the right to see in advance, an encapsulated coin if you are a particularly fussy buyer -- or if you have any doubts about what the coin might look like.
Where a coin already is encapsulated, you may wish to bargain for the right to have it removed for testing (for example, to authenticate it) or even to see the third side of the coin (its edge). Or to see what another grading service might grade the coin.
If you want a sample of how to amend the standard terms of sale to permit removal from encapsulation, try a brief letter like this:
"Dear (Dealer), I am interested in purchasing a 1914-D cent from you that is presently encapsulated. I wish to have the coin tested because there is a possibility that the rim was drilled and repaired. If this is agreeable to you, kindly sign the duplicate of this letter amending your terms of sale to permit the removal of the coin from the holder, and the submission of the coin to non-destructive testing, which may take more than 30 days to accomplish. I will then forward a check in payment. Very truly yours."
Suppose that you want to submit a coin to PCGS, NGC or ANACS for certification, and don't wish to use express service, even if it is already encapsulated by another service. Your right of return would most probably pass before it was received back. This can sometimes be remedied with an amendment to the terms of sale:
"Dear (Dealer), I wish to purchase from you a coin that I wish to (remove from its holder and) submit to (grading service). If this is agreeable to you, kindly sign the duplicate of this letter and return to me, so that I can forward the purchase price. Since you are an authorized dealer, kindly submit thereafter on my behalf (or send to [authorized dealer] to submit for me). Sincerely."
There are certainly many other changes that you may wish to try and negotiate. The key is to remember that it is a negotiation. The dealer isn't obligated to change his or her terms; you, of course, aren't obligated to purchase their coins.
In negotiating, try and be reasonable. That means not to ask a dealer to do something that you wouldn't do if someone asked you to do it.
But, in bargaining over your terms of sale, you can add substantial value -- and pleasure -- to collecting coins, or acquiring any other type of collectible.
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David L. Ganz
