ONLINE COIN AUCTION TIPS
Using online auction venues can be a fun and rewarding experience for a collector looking to expand his or her coin collection. It provides a hobbyist access to thousands of items that one would otherwise never view. However, there are risks associated with purchasing coins through online auction sites. Here are a few tips that will hopefully aid in providing for a positive online buying experience.
One must remember the classic adage, applied for online auctions, that "If an item or lot seems too good to be true, then it is most likely not legitimate." Many individuals who think they received an unbelievable bargain through online auction venues end up getting burned.
When using any other auction firm be sure to understand the auction rules, terms and conditions. They can vary from firm to firm, and an informed bidder will know what terms and conditions they are bounded by.
Always read the seller's entire auction description and terms before bidding on an item. Be sure to understand what exactly is being sold, shipping charges, return policies, and payment options. Watch for any unusual terms listed in an auction.
Be wary of sellers claiming to know very little about coins or claiming that this was an inherited estate that they know nothing about. This is often a way for sellers to auction low quality or counterfeit coins and attempt to disclaim responsibility with ignorance. A quick check of feedback records will often indicate that the "novice" seller has been selling coins for months, or even years.
Avoid sellers that do not accept returns, or do not have a stated return policy of some sort.
Always examine the Feedback Rating of a seller that you are interested in purchasing an item from. A buyer should avoid a seller with a low feedback rating (generally below 98 percent), or one who has a recent string of negative feedback.
Be wary of sellers who use private auction listings, as this is often a tactic used to disguise shill bidding (where agents acting in behalf of the seller bid on an item in order to artificially increase its price).
Avoid sellers who have private feedback. This tactic is usually employed to disguise negative feedback other buyers have left the individual. If a seller cannot share his or her feedback regarding past transaction, it would be wise to pass on their item.
Avoid sellers with new accounts who are selling expensive coins for the first time. An expensive coin should only be purchased from a seller who has a clear track record. Also beware of sellers who will sell a large number of inexpensive "junk" items in a short period to increase their feedback. This can be a tactic used to give the veil of legitimacy.
Always avoid auction sellers who attempt to sell numismatic items to you unsolicited away from the online venue. This is against the policy of most auction sites, and the buyer has no recourse through the auction venue should there be a transaction problem.
Beware of new "alphabet soup" certification companies. A large number of coins are offered online as being graded by a professional grading service. In fact, they are often typical Coin World-like holders with a homemade label that contains an inaccurate grade and an acronym that represents a "self-slabbing" grader. The truth is that any hobbyist can purchase and place a label into a coin holder and call themselves a "grader."
Avoid sellers who are selling many raw coins or coins in 3rd tier slabs, but are quoting prices for ultra grade coins from sources like the PCGS Price Guide. The sellers' coins are nearly always overgraded or problem coins and are not comparable to the coins they are being compared against.
Beware of US coins being auctioned by sellers from the Far East. Individuals in China produce large quantities of counterfeit US silver coins, particularly Bust, Seated, Trade and Morgan Dollars.
Beware of sellers that do not provide a clear picture of a coin, or provide no picture at all.
Beware of a coin picture that does not appear like the seller took the actual photograph. A recent trend has been for unscrupulous sellers to steal a photo from a legitimate dealer, auction house, or collector and use it in an auction where they are selling an inferior coin, or no coin at all.
Beware of sellers who attribute raw coins or graded coins that have no mention of an attribution. Be wary unless the seller is willing to guarantee the attribution AND offer a reasonable return policy that provides the winning bidder time to examine and verify the attribution of the coin. This is of special interest to variety collectors of half cents, cents, half dollars, and dollars.
Be wary of sellers who describe their photos as "stock photos," meaning that the coin the winning bidder receives will not be the coin pictured. Many times, the coins being shipped to buyers are of inferior quality compared to the stock coin used in the photo.
Be cautious of sellers who offer unusual sale terms, such as excessive shipping and handling charges, requirements of payment forms that the buyers have no recourse with (such as cash only sales), "as-is" sales, or single day auctions (as this is often a way to avoid the policing efforts of online auction sites).
Beware of signs that an online account has been hijacked. Hijacked accounts are seller accounts that have been taken over fraudulently by a different user than the account holder. Some signs that an account has been hijacked include:
- Seller feedback that has many RECENT negatives at a higher rate than normal for the account.
- A seller account that remains inactive for a long period of time, then is suddenly selling rare or expensive coins.
- An account that sells no coins for a long period of time, then is suddenly selling large quantities of rare and expensive coins.
- An account that has previously only purchased items and never sold any items, let alone coins, is now selling large quantities of coins.
- A seller who requests that payment be sent to a different address than the address posted on the account.
One should be advised that these tips are general statements. Some perfectly honest online sellers may bring up one or two of these "red flags." However, if you are uncomfortable with aspects of a seller's account or listings, then avoid that seller. In general, the more "red flags" a seller raises, the greater the likelihood that the seller is a dishonest individual.
