As seen in the editorial of the May 27 issue of Coin World, Steve Roach discusses what he calls the “five-year wall.” Perhaps the “five-year wall” should be called the five-year learning curve. I think that it takes about five years or so for the average new or returning collector to experience some of the things that could draw the life blood out of what could have been a great hobby for them.
Buying coins can be extremely difficult. Many coins are sealed in plastic holders that we call “slabs.” When a collector is buying a coin, the slab is used by a dealer as a selling tool. The dealer refers to the slab as a coin having been graded and encapsulated by the “ABC” grading company, and offers that coin to a prospective buyer based upon its grade, date and eye appeal. Mostly, though, it is the grade that counts. A dealer will explain that the grade on the “ABC” slab determines the price of the coin and there is a small markup added to that price since he or she (the dealer) has to “make a little bit on the deal.” OK, Fair enough.
Selling coins can be extremely difficult. Many coins are sealed in plastic holders that we call “slabs.” When a new or returning collector tries to sell the same coin purchased that was described above, a dealer will quickly look at the “slab,” then make the following observation. He or she will say something like, “That coin is in an ‘ABC’ slab, but it would be better if it was in a ‘PQRS’ slab as ‘ABC’ slabbed coins usually sell at a discount.” The dealer’s offer usually reflects that discounted amount and a further reduction because the dealer has to “make a little bit on the deal.” OK, Fair enough. Or, is it? It is at least a frustrating lesson on numismatic economics. Buy high and sell low.
Online auctions are a double-edged sword. They can be a good thing or they can be a way to lead the new or returning collector to the proverbial slaughter. This is true especially for those collectors who have an interest in Mint errors and die varieties. While it is true that some well respected error and die variety experts sell properly labeled coins on auction websites, an about equal number of sellers sell homemade “hammer jobs” or coins advertised to be doubled die varieties that are nothing more than coins exhibiting some form of machine doubling. Of course, machine-doubled coins can be interesting to collect, but they are common and of little value. Also, many “slabbed” coins being auctioned are incorrectly labeled as to error types and die varieties. Yeah, I know: Buyer beware!
OK, let us just stick to collecting something that should be simple. The Lincoln cent is something that we can all relate to. I know that I started collecting by looking through rolls of Lincoln cents and pulling the “good” ones out of circulation.
Today, things are different. In 2009, 20 different Lincoln cents were minted. There were circulation strikes, satin finish strikes and special proof coins struck in a copper alloy. A few could be collected searching through rolls, but it would take $100 or so to purchase the rest of the cents needed for that one year alone.
Series like the Presidential dollars and Kennedy half dollars have been discontinued for general circulation, so now you have to purchase coins from the Mint if you want to continue your current collections of these denominations.
I recently received an email from someone who purchased several U.S. large cents that were sold by an advertiser in a major coin publication as raw and About Uncirculated. When those coins were submitted to a major grading company, each and every coin came back as having been harshly cleaned and retoned.
Another email describes the spending of $80 with a major grading company to have a legitimate error coin “slabbed.” The coin was sent back ungraded and not encapsulated. A note was included calling the error “man made.”
Finally, at a local coin show I examined a coin slabbed by a major grading company as a rotated die error. The coin was an obviously pieced together coin made from two separate Lincoln cents!
As proponents of our hobby, we have to work on the problems highlighted in my commentary.
The “five-year wall” might just be the “five-year learning curve” with the average person taking just about five years to give up on collecting coins. Is it any wonder? This hobby is shooting itself in the foot!
Bill O’Rourke is author of the monthly Coin World column “Found in Rolls.”