Trigger warning — if you were one of the many collectors who were unsuccessful in buying one of the Winged Liberty Head gold dimes from the U.S. Mint on April 21 and you are still upset about being shut out, you might want to pause before reading this next bit.
Promotional copy at the Home Shopping Network website: “2016 SP70 ANACS First Day of Issue Limited Edition of 1,789 24K Gold Mercury Dime ... $499.95.”
To translate, the online and television shopping network acquired at minimum nearly 1,800 of the hotly anticipated gold dimes, sold by the Mint for a price of $205 each with a household of 10 coins.
That represents about 1.4 percent of the 121,201 coins sold in the initial wave of sales from the maximum mintage of 125,000 pieces, and they are now being offered at more than twice the price (cost of grading and encapsulating included).
The Mint’s sale of the 2016-W Winged Liberty Head gold dime unfolded like many of its long-awaited and hotly anticipated products. The coin went on sale at noon Eastern Time, was switched from “available” to “back order” status about 20 minutes later, and then to “currently unavailable” about 40 minutes into the sale.
The speed at which the coin sold out was made possible in part by the 10-coin household limit. That bar was too high, collectors have told us, adding that the limit made it easier for retailers to snap up sizeable quantities of the coins.
My phone started ringing and email inbox beeping around 1 p.m. April 21, maybe even sooner. Collectors were contacting me to complain that they had been unable to buy one of the dimes. Most said the 10-coin household limit was too high; a one- or two-coin limit would have been better. This is a familiar refrain; the collectors make a good point.
Many of the callers also predicted that dealers would be able to acquire quantities of coins well beyond the household limit. Most were upset with this possibility.
I think anyone would understand why a collector who was locked out of buying one of the coins would be upset with a retailer offering large numbers of the coins at prices well above the issue price. It is easy to see why some believe that the system is rigged in favor of dealers and not collectors. But is it?
Companies like HSN and some of Coin World’s advertisers build their inventories in several ways: The firms may have employees order the maximum number of coins on their personal accounts and then reimburse them. Firms also turn to the secondary market, buying coins from their customers or others at a premium; it is not unusual to receive an email from such a company before or after a sale begins, offering to pay a premium for each coin the recipient will sell to the firm. And while the practice does upset some collectors who see such techniques as improperly circumventing the household limits, some collectors already intend to buy the maximum number of coins, pick the best one to keep, and sell the rest to a dealer, often financing the purchase of the coin they kept and making a nice profit beyond that. It is tough to fault any collector for doing that.
The reality is that the Mint has not found a better way to sell in-demand products. The Mint order system cannot distinguish why a particular buyer is purchasing a coin or coins, whether it is for a collection to be held long term or to be quickly flipped for a profit. I doubt anyone would want the government to tell a buyer what he or she can do with the coins once purchased. If anyone has a better idea that might be feasible, let us hear it.
However, the Mint can do a better job of determining household limits. Ten was too many for this coin; a better limit would have been one or two coins for the first couple of days of sales, then a higher limit. A lower limit could have helped spread the coins around a little better.
The Mint still has time before it launches sales of the gold Standing Liberty quarter dollar and Walking Liberty half dollar, part of the same Centennial program celebrating these three beautiful coins. Although the smaller size and lower price made the dime the most desirable coin for collectors on a limited budget, the Mint should still listen to collectors and lower the household limit for both other coins.