Use These Tips to Find out if Your Online Coin Dealer Is a Fraud
Especially during times of inflation and recession, gold and silver coins are of incredible value. The price of gold and silver usually goes up during this time. However, that also brings out the scammers.
Selling rare coins or even gold and silver coins at market value can profit you immensely, if you time it right and buy the right coins. If you know what to look for and you know your way around the coin dealer market, you’ll be fine. However, if you’re just starting out, chances are you will turn to the internet. There are a lot of online coin dealer scams out there. Here are a few repeated scams or processes that you can watch out for.
Rare Coin Scams
Serious coin collectors (Numismatists) usually sell their coins if they see big returns on their investments. Or if they need some liquidity or cash. Whether they’ve purchased rare coins for just this occasion, or if they are just collectors, is irrelevant. High inflation paradigm shifts usually led to the rise of gold and silver prices. Hence, the costs of these coins may go up exponentially. But remember they are professionals in the business to make money. What that means is that their selling them at a price that makes them the most money.
However, this also brings out some danger for the amateurs who think they can make a profit doing the same thing. They give in to the promises that have been made by dishonest coin dealers. Online coin dealers can take advantage of this because after they ship you the coin, if you are not happy with it, you are not near them to return it or stop in their store. Buying coins should be done at reputable coin dealers or online auctions. Make sure they have a solid history and reviews. Selling old coins online is a lot easier and safer.
How to Spot Fraudsters
The best thing you can do to arm yourself against fraudsters is to learn the business. You should avoid investing in products or types of coins that you know very little about, and learn the business from the inside. Use trusted contacts and look before you leap every time. Most expensive coins have counterfeits copies on the market. Make sure you know the coin, know what to look for before you buy.
If you want to know about the coin dealerships you’re going to invest in, find old customers. If they’re not very well known in the area, be skeptical. All of these things are just good business decisions.
Spot Clearly False Promises
If your online coin dealer promises to buy back your coins for the same price or more than what you paid for them, reject his offer. This is likely a scam or at least a promise likely to be broken. An honest dealer depending on the type and cost of the coin will usually only tell you that he will buy back the coins at a discount usually 10% to what the current bid price is. This is because coin prices fluctuate often. No business person would ever agree to take a potential loss like that as coin prices fluctuate.
Have an Independent Source Check the Coins
In order to verify the condition and grade of the coins you’re purchasing, get a second opinion. Especially if it is a high value coin. You should have an independent verification source that you can trust. This is why it’s important to know this business inside out before proceeding to buy or invest. Learn how to grade coins, we posted an article about that as well search previous posts.
Do Your Research
Do your research on the coins. Make sure that the ones being offered actually exist. Understand the rarity, the condition rarity etc. Search sold prices on ebay for similar coins. If the deal is too good to be true it likely isn’t real. Counterfeit coin scams still exist, and they’re rampant on some online coin dealer sites. Think logically why would they sell it to me at such a discount if they could easily sell it elsewhere for more???
Beware the Salomon Index
This is an old trick that low moral dealers and scammers use over and over again. These quotes can show appreciation of about 12-25%. However, what they won’t tell you is that the Index is based on a list of 20 very rare coins. It was compiled by the Salomon Brothers New York Investment bank. Coins sold by these dishonest dealers aren’t likely to appreciate at the same rate at all. In fact even if they show the coins value increase over a period of time, look at the details as to recent price performance of the coins. As if you look at a chart of a coins value it may show huge growth from 1960 to the present, but when you compare the price from the last decade it may have decreased showing a decline. Common coins especially look great over the long term but over the last decade they have decreased in value for many in the series. Common coins and extremely rare coins values move differently and often in different directions. If you’re looking to sell gold, silver or rare coins in the current market, then you should look no further than CashforCoins.net. It’s one of the most trusted sources for buying and selling coins online. Click here for a real-time offer based on current silver and gold prices.
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