Money

Minimize Gold Buying and Selling Headaches With These Important Safeguards

by Mike Fuljenz  – 

There’s an old expression that can make or save you a lot of money when you’re buying or selling gold: If you don’t know gold, you’d better know your gold dealer.  It’s that simple.

KFDM-TV Channel 6 in my hometown of Beaumont,Texas recently did a Crime Stoppers story about a Texas dealer who reportedly paid only $16,000 for nearly $250,000 of coins sent to him by an 82-year old California woman.  The interviewer asked me for consumer protection advice so other people can avoid encountering this kind of problem.  My suggestion was simply to remember: “It’s important to do your homework before selling or buying gold and silver coins.”

There are easy-to-do precautions you can and should take before you make a purchase or sell to someone you’re not familiar with.  Too often I hear horror stories about people who grossly overpaid for what they purchased, never received the merchandise they ordered, or were grossly underpaid — or never paid — for what they sold. In one case I personally helped the news media investigate and expose a traveling “hotel buyer” who claimed in his big advertisements he would “Pay the Highest Prices” but offered only $60 for a gold coin actually worth $10,000.

When you sell, sell to a specialist.  If you have gold coins, sell them to a gold coin dealer, perhaps in your own community.  Specialists usually will pay far more than a pawn broker, jeweler or hotel buyer who is in town for a day or two and then gone.

Before you buy or sell gold or rare coins, follow these simple steps.

Check the dealer’s rating with the Better Business Bureau.  I know an investor who wired $20,000 to a company to buy gold and didn’t receive anything.  Had he checked first with the BBB online, he’d have seen the company had an “F” rating.

How long has the dealer been in business?  Many “boiler room” operations frequently change names, and sometimes locations.  Also check to see if the dealer is a member in good standing of such organizations as the Professional Numismatists Guild (whose members must adhere to a strict Code of Ethics), the Industry Council for Tangible Assets and/or the American Numismatic Association.  If you are buying rare coins, is the seller an Authorized Dealer with either the Numismatic Guaranty Corporation (NGC) or Professional Coin Grading Service (PCGS)?

Know the price of gold when you buy or sell.  If you are buying “common” one-ounce bullion coins, such as the American Gold Eagle, typically you should not pay more than 5 to 6 percent over the current spot price of gold.  Reputable dealers offer a 15-day return privilege on rare coin purchases; however, because of the potential for frequent precious metals spot price fluctuations, that kind of return privilege window usually is not available for bullion purchases.

Always get an itemized receipt from the dealer when you buy or sell.  If the dealer declines to provide a detailed, written receipt, that’s a red flag.  Don’t do the deal.  Take your business somewhere else.

Even among major, reputable dealers, there are significant differences you may want to consider.  For example, has the dealer received industry awards and recognition?  (I’m delighted that my writings and consumer protection work have earned awards from the Press Club of Southeast Texas and from the Numismatic Literary Guild.)  Is the dealer involved in community service, or does the dealer assist law enforcement agencies or regulatory agencies with expert advice on issues related to coins or bullion? Experience combined with leadership and recognition are important when choosing a dealer.  To quote the long-time motto of the Better Business Bureau, “Investigate before you invest.”

A video of the KFDM-TV report mentioned above can be seen online at www.kfdm.com/shared/news/top-stories/stories/kfdm_vid_1175.shtml.  My earlier advice to AMAC members about protecting gold and other valuable assets from thieves is available at http://amac.us/how-to-protect-your-gold-from-thieves.

 

 

Read more articles by Mike Fuljenz

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14 Comments on "Minimize Gold Buying and Selling Headaches With These Important Safeguards"

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john hartmann
4 years 1 month ago

jay woodside at scotsman’s coins in st louis is an excellent person to do business with
his blog quotes prices on a daily basis

Buy and Sell Gold
4 years 1 month ago

Appears to be like you have a situation of possible scams on your arms, if they are informing you the value of your consideration has missing over 75 % of its value.

Path
4 years 2 months ago

Three years ago I took all the money from my two IRA’s and bought a gold backed IRA through Gold Line – Today, even though the price of gold has risen, I’m told my $86K is now worth $20K. Be very, very careful.

Geraldean
4 years 2 months ago

Same for me – I fell for the Lear Capital ads, cashed out my IRA into gold three years ago; then, the gold storage fees doubled twice; the price of gold bullion went up but the value of my account went down; it took 3 months and another $350 to extricate my IRA from gold and back into cash. I lost about $4000 using Lear and Sterling Trust, who “held” the gold for me.

PaulE
4 years 2 months ago

Sounds like you have a case of possible fraud on your hands, if they’re telling you the value of your account has lost over 75 percent of its value.

Foxy
4 years 2 months ago
Up until 25 years ago I worked for a coin dealer in Philadelphia, Pa. I did a sizeable amount of grading. I would have to say the grading at the business was on a par with PCGS and NGC and most times slightly over graded as it was the owners desire to so. Since that time I had first, moved to the Seattle, WA area, and now I live in the Boise, ID area. I have found some dealers who are authorized PCGS and NGC and long standing members of the PNG that I wouldn’t sell a wooden nickel to them. Case in point: I have a friend that had some very valuable Lincoln pennys he wanted to sell. Last year he asked me if I would take him to the Boise, ID Coin Show and help him sell the raw coins. I told him it wouldn’t cost much to… Read more »
Wade
4 years 2 months ago
If you can’t afford to buy gold, at least buy food! Food is a no-risk protection against all sorts of crisis: financial or natural disaster. Good to have if your power goes out or the markets collapse. If food prices skyrocket, you probably can even barter with a can of tuna. No risk, because even if nothing bad happens, you can still eat it (and lower future grocery bills). Find it hard to start stocking up? Try this: Every time you grocery shop, buy two extra cases of canned goods. Then stack them in an unused closet. You will be surprised how fast that closet fills up. I’ve heard of companies like, “Food Insurance,” that sell emergency food, but it just has to be cheaper to look for deals at your local discount grocer. Also, canned foods are better than dehydrated, not just because of taste, but there is often… Read more »
Scooter
4 years 2 months ago

Wade,

In a few words, ” You got it Nailed buddy !!! Proverbs 6:6-8 warns us to be prepared, yet many trust
the government will furnish them with ” BREAD LINES” . some coinage is wise but it tastes like s***
with ketsup. Be safe.

Dave
4 years 2 months ago

I’ve thought about doing that. My question is, what do you do when the canned food expires. Do you just start eating canned ravioli for a year?

Stanley
4 years 2 months ago

Just rotate things so they don’t expire. Dyhydrated foods have a much longer shelf life and should be the bulk of any serious food storage pantry.

PaulE
4 years 2 months ago

A very good public service article with practical suggestions everyone can easily follow. Bottom line, be as knowledgeable as you can be concerning the gold coin(s) you want to buy or sell, since you ultimately have to protect yourself.

I have just one other comment on your sentence regarding American Gold Eagles. “If you are buying “common” one-ounce bullion coins, such as the American Gold Eagle, typically you should not pay more than 5 to 6 percent over the current spot price of gold.” Even the U.S. Mint is charging more than your recommended limit of 6 percent above the spot price of gold these days.

Benjamin Raines
4 years 2 months ago

Who can afford to buy ANY Gold? Not the average working smuck!

Scooter
4 years 2 months ago

Ben,

Silver is a poor mans gold .

Margie
4 years 2 months ago

Thank you for an informative article. Mike Fuljenz is a excellent author with very credible advice. We cannot be cautious enough when spending our hard earned money to buy gold or silver bullion. There are so many fraudulent dealers waiting to deceive innocent buyers or sellers. I believe that we must truly educate ourselves to know all the aspects of our product. Often there is no recourse for people who have been swindled; therefore it is important to buy from a reputable dealer. I have chosen a safe place to by my bullion. I have received excellent service. I hope readers share their favorite sites to buy bullion.

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