Log in to post
Michael Bugeja

Online Coin Auctions

Michael Bugeja

Michael Bugeja, a coin collector since childhood, is a professor at Iowa State University and also a former member of the Citizens Coinage Advisory Committee. He is a nationally known author, journalist and educator.

Visit one of our other blogs:

Archive for 'March 2016'

    Many Uncertified "Raw" Coins Are Cleaned

    March 30, 2016 9:14 PM by Michael Bugeja
    The above photo illustrates the difference between hairlines from cleaning and slide marks from coin albums with plastic strip protectors. 

    Harshly cleaned coins are common in Proxibid and eBay auctions. This 1884 Morgan dollar (above photo, left) shows deep hairlines from cleaning with a metal pad, essentially ruining the coin. You can see the arc of the cleaning here, curving downward and across the cheek.

    (Click the photo to expand.)

    Other kinds of cleaning are more difficult to detect.

    Lightly cleaned coins still have hairlines from rubbing with a cloth rather than metal pad. Again, these hairlines are seldom straight as in a horizontal or vertical streak; they usually are uneven or curved, as in a rubbing pattern.

    Horizontal or vertical streaks often are so-called "slide marks" caused by coin albums with plastic slip protectors. Dansco albums, for instance, have  such protectors. When hobbyists are not careful and "slide" the protectors to take out coins, the dust on the plastic rubs against the metal and causes those straight lines.

    Slide marks may lower eye appeal, but coins with them still are grade-worthy. Harshly and lightly cleaned coins will not earn a grade from the top holdering companies (PCGS, NGC, ANACS, ICG).

    The most difficult cleaned coin to detect in online photos comes from dipping in a solution that strips a thin layer from the metal. NGC has an informative article  about dipping. 

    Many dealers are skilled in dipping to remove tarnish, but some hobbyists who try this--using a solution like Jewel Luster--strip away too much of the top layer. The coin ends up losing the luster (ironically), leaving a dull surface. 

    The problem with online photos of such coins is the flash of a camera often bestows a "false" luster (light shining on metal) that the coin actually lacks.

    To avoid spending top dollar for cleaned coins, consider ones only in top-tier holders  Or ask the seller whether the coin has been dipped or otherwise cleaned. Never bid on a coin with poor photos that prevent you from discerning true condition--no matter what the seller says about the lot or what the flip states about mint state or value. 

    Read Terms Before Bidding, Auctioneer Advises

    March 26, 2016 9:03 PM by Michael Bugeja

    You might not immediately make the connection about the significance of onsite previews in Internet coin auctions, says licensed auctioneer Sheena Wallace, who operates Auctions by Wallace in Barhamsville, Virginia.

    But that information is there if you read the terms of service, and its presence is a plus when it comes to coins. 

    "While it is not feasible for an online bidder in California, for example, to personally preview a sale in Virginia, it is important to know when the items are available to preview," Wallace says.  "Meaning, if an auction does not offer any preview ... they are more than likely over-hyping coins."

    Preview times at her company occur a few hours before selling begins.

    Auctions by Wallace is a full service company that holds auctions in its 7,200-square-foot facility. It also dual lists those auctions on Proxibid. I have been bidding on coins in her sessions for several years and have been pleased with Wallace's communication and dedication to coin sales.

    She is one of the relative few auctioneers on Proxibid that guarantee the authenticity of coins. Many state all sales are final, even for counterfeit or mis-identified replicas. 

    Her house charges a reasonable 15% buyer's premium. She charges a $1 handling fee plus postage and provides tracking via email so you know when the coins ship and where they are during transit.
    Shipping is part of customer service, and she wonders about Proxibid sellers who refuse to combine lots as small as coins.

    Here's a verbatim example from one Proxibid auction house:  "IMPORTANT- YOU MAY NOT COMBINE PURCHASES TO SAVE ON SHIPPING. Small items, Cards, Coins, Jewelry and Baseballs - $12.95."

    That's a ludicrous policy. If you win two American Silver Eagles in separate lots from this seller, you will pay $25.90 plus the winning bids and 19.75% buyer's premium. That will cost you more than $85.

    Nonetheless, buyers do need to understand the cost of shipping, Wallace says. "I have seen recently that one company only charges $5 shipping.  That is great but they are charging 21% BP so the buyer's are paying for the shipping through BP.  

    "Another company only charges $5 but passes on the cost for insurance and signature confirmations--so you really don't know how to estimate for shipping because they are hiding the costs in insurance especially if they are using a third party shipping company and/or insurance company."

    As we have mentioned before in my Online Coin Auction blog, reading terms of service is critical if you want the online bidding experience to pay off. Failing to read terms or worse, failing to pay for your items after the sale, can ruin what should be a win-win situation for seller and buyer.

    As for me, I won two silver commemoratives in a recent Wallace auction--a 1936 Wisconsin and 1936 Norfolk coin. They were sent within two days after the auction and arrived within the week. Better still, the Wisconsin coin is a knock-out. I hesitate to say it, but I think it will grade MS67. The Norfolk coin is toned a beautiful gold, and I think I have a shot at MS66.

    I'll report on those in a few months. They're on their way to PCGS.

    And I have Sheena Wallace to thank because I trust doing business with her. And that's the key, auctioneers: return business. The friendlier the terms of service, the greater the trust.

    Replica California Gold Sells on eBay

    March 23, 2016 6:57 AM by Michael Bugeja

    Earlier this month  we warned about fake and replica California fractional gold   selling on Proxibid, noting that the company eventually persuaded the auctioneers to take it down. The one pictured here sold after 37 bids on eBay for $205, despite my reporting the item four times to eBay, citing its rules, and once to the seller (without a response).

    The item was listed as 1/2 dollar "California Fractional Gold Coins" with the seller stating the two coins being offered were found in the proverbial estate lockbox. The seller added he is not a coin expert and so could not authenticate them.

    Those words are red flags in my book with any coin, especially when the seller seems to know the denomination and how to describe the lot numismatically. Of course, according to his disclaimer, he is not a coin expert and so couldn't authenticate the lot--an indication that he had an inkling about their authenticity.

    Connect with Coin World: 
    Every word of the description is most likely in error. It's not a 1/2 dollar, as the word dollar never appears. The replica is not from California and certainly isn't fractional gold (probably brass or gilt plated brass). And it is not a "coin," a word reserved for official mints.

    At best it is a replica. At worst, it is a counterfeit.

    What is most concerning about this, however, is not the seller but eBay, which made numismatic news om 2012 when it sent out this message:

    Based on this feedback, and after closely reviewing the coin experience on eBay, we have decided to update eBay's Stamps, currency, and coins policy to disallow replica coin listings on eBay.com, effective February 20. ... This update reflects standards across the coin industry and helps ensure compliance with applicable laws that require replica coins to be permanently marked with the word "copy." 

    Those who report replicas and fakes on the Coin and Currency category of eBay expect that it will take action. Four times this was done in the course of a week, and the item still sold.

    The good news is that this was the only replica being sold at the time on eBay. In the past, I could find several.

    California fractional gold is rare. One surefire way to insist on authenticity is to require the Breen-Gillio number as found in the book about the denomination, titled  California Pioneer Fractional Gold.

    What an Auction Bill Looks Like

    March 20, 2016 8:03 PM by Michael Bugeja

    Before I bid on any lot in a Proxibid auction, I take a careful look at the buyer's terms. This auction had a steep 20% premium, so my bids were going to be conservative. (Click the photo above to expand.)

    Newbies in online auctions often just consider the bid and not the premium when trying to win lots. The result is they max out their credit cards and drop out of the bidding game for months at a time.

    To sustain my buying and selling, I not only employ my "One Flaw Rule," rejecting any lot with a perceived flaw, as explained here earlier in the month. I also judge the grade carefully, in this case, on five Morgans--four raw ones and one potentially under-graded NGC one. I am conservative in my grading, too. If a lot looks like an MS64, I consider it MS63 or MS62.

    Connect with Coin World: 

    Judging the grade is difficult online. Often photos are subpar and that affects perception. Better to be conservative and lose the lot than optimistic and disappointed when the coin ... and the bill ...  arrive.

    Once I determine the grade, I consult with PCGS CoinFacts for auction values. I never use retail or when wholesale bids when buying online. The only reliable value is what people will pay for a coin in an auction, and that is often below retail and wholesale.

    But my conservatism continues. If the coin is raw, or if I intend to crack it out and resubmit it, I then factor in another $30 dollars for PCGS or NGC submission fees.

    The result is I do not often win many coins. I may bid on 50 lots and win 5. My intent is not to keep all the coins I win but to win with a low bid and then consign and sell near retail. I don't make any profit, typically, because I may keep a coin for my collection, tucked away in a bank box.

    In the end, I break even usually or slightly ahead, but it is a way to continue collecting coins without a large budget.

    These five were as I had assumed they would be by way of condition. The 1881 actually has a shot at MS65. The others may grade high, too. I had hoped the 1885-S would come in at MS64, but when I saw the coin, I think that may be s stretch. An MS63 looks more like it. Current auction values peg an MS64 at $500 and an MS63 at about $300.

    Finding Crossover Candidates

    March 16, 2016 7:13 PM by Michael Bugeja

    As the photo above shows, I won a PCI-holdered 1888-O Morgan dollar for $80 (with buyer's premium, $93.60) in a SilverTowne auction on Proxibid. The PCI grade was MS66, but this looked more like a gem MS65.

    Today I received the coin back in the PCGS holder. It graded MS65. Its value? $625.

    That's a tidy profit.

    Connect with Coin World:  

    Don't make the mistake, as many sellers on Proxibid and eBay do, believing that the older PCI-slabbed coins are close to first-tier grades as might be found in PCGS, NGC, ANACS or ICG. (We're not addressing the so-called new PCI but ones with green or yellow labels.)

    PCI was woefully inconsistent. Many of the coins marked MS66 are really MS64. But on occasion, you can find a PCI-holdered coin that might miss the mark by a point, as I did with the 1888-O. Some even can cross over at the same grade.

    PCGS and NGC have earned their reputation by being consistent, and if you study how those companies grade coins so that you can identify likely crossover candidates, you can build a great collection at a wholesale price.

    As always, however, my ability to do this took time. Over several years, I have been able to cherrypick premium quality coins in lesser holders and submit them as crossovers to PCGS. (NGC only considers crossovers from PCGS and no longer will look at coins in other holders, including ANACS and ICG.)

    The lesson here not only involves winning bids but the ability to grade. I recommend the third edition of Making the Grade: Comprehensive Grading Guide for US Coins.

    Identifying Fake California Gold

    March 13, 2016 9:22 AM by Michael Bugeja

    The photo above features a genuine California Fractional Gold piece with a US currency denomination on the reverse and a fake piece, or replica, on the right with a bear symbol, which is not from the 19th century, not gold and most assuredly not from California. It was listed in a Proxibid auction has "1855 Cal. Gold Token."

    At best, this should have been listed as a "plated gold or brass replica."

    If you spot a bear on the reverse, or any other symbol or text without an indication of denomination, such as "dollar," "dol." or even "d," my advice is not to bid more than $1. My local coin dealer sells them for that much, and he has a box of them.

    Connect with Coin World:  

    Three other Proxibid auctioneers are listing lots labeled "California Gold." James Peterson auction lists one correctly:  "SCARCE 1870 1/4 DOLLAR CALIFORNIA GOLD COIN FROM SAFE DEPOSIT."

    And then there are two lots offered by Weaver Auction, which carefully lists them as "2 California Gold Token Souvenirs: 1854 Octagonal, 1857 Round." I would not have listed the dates; however, I also had never seen these particular souvenirs before.

    To identify the tokens on the Weaver site, I consulted Mike Locke's California Gold guide. Go to the "California Gold Token Guide" link and scroll down  to "Wreath." You will see that these are collectible gilt brass tokens worth $15-45.

    Auctioneers need to check his site before identifying any token as gold, let along California fractional gold.

    Identifying real vs. fake or replica California gold is important because of value. Look at the photo above again. The genuine 1872/1 25-cent piece, MS65 prooflike, is worth about $800. The token on the right, about $1. If a bidder pays hundreds for a brass replica, and later learns about it, he or she may leave the hobby.  

    To learn more about how to detect fake California gold, view my Coin World article on the topic.

    "One Flaw Rule" in Online Coin Auctions

    March 9, 2016 5:13 AM by Michael Bugeja

    If you intend to bid in eBay or Proxibid auctions, you had best temper your enthusiasm to own a coin and adopt what I call "the one flaw rule."

    Before explaining that, I want to emphasize how hobbyist feelings get in the way of good sense when bidding on Internet. I know. I have been there. Occasionally, I still get carried away wishing to win a coin or snare a good bargain.

    When it comes to raw or uncertified coins, however, more often than not you will not win or get a bargain. You will lose money and enthusiasm. 

    Connect with Coin World:  

    Auctioneers on Internet portals rarely mention flaws in coins. They do this to sell problem coins especially. That impulse in the 1980s led to third-party holding companies such as NGC and PCGS.

    You have to be your own authenticator on Internet. 

    The "one flaw rule" will help you. Look closely at the online photos of a coin lot. Do not bid on any raw coin that only shows the obverse. You need to inspect the reverse, too.

    The 1878-CC coin above is a perfect example. The obverse looks fine. But the reverse has the cut or scratch. As soon as you spot that, leave the coin lot and look at other prospects. 

    Do not bid unless the perceived flaw is mentioned in the description.

    In this 1878-CC Morgan
    , also on Proxibid, the seller identifies the flaw on the reverse: "small scratch on rev." 

    Finally, keep in mind that you won't find that perfect coin or bargain every day on Internet. You may find it once a month, and that's plenty. So find the flaw and move on. You'll be glad you did!

    Know Shipping Policies Before You Bid

    March 5, 2016 3:14 PM by Michael Bugeja

    Shipping policies on eBay are better than what you might find on an auction portal like Proxibid or iCollector. For starters, eBay monitors shipping and rewards best practices.

    For instance, sellers automatically receive a 5-star shipping time rating if they expedite shipping or if tracking information is uploaded by the end of the next business day after payment is received.

    Proxibid has a rating system, too, for shipping. I can't make much sense of it because auctioneers with terrible shipping policies rarely receive a rating lower than four out of five stars. 

    Connect with Coin World:  

    Here's an example: "Shipping and handling fees are $60.00 per flat rate USPS box, which includes insurance, tracking, and priority 2-3 day shipping."

    Suppose you won a $25 Silver Eagle? That will cost you about $90.

    Auctioneers who only recently decided to use Internet portals are used to calling the shots on everything--from no charge-backs (even on counterfeit coins) to no shipping whatsoever, requiring buyers to find local businesses like UPS and make arrangements for pick-up.

    I do not bid in any Proxibid auction that requires me to contact third-party shippers who will want credit card information. As soon as the auctioneer passes the coins to the shipper (and who knows what happens to the lots then?), the auctioneer no longer is responsible for loss of items. 

    When bidding on coins in auction portals, watch out for padded extra charges and handling fees. Here's an auctioneer that charges 79 cents per lot with another fee at 35 cents per minute handling with $3 minimum.

    Another auctioneer says he'll do shipping a week after the auction. He charges a $5.00 per box packing fee plus the actual cost of shipping. It makes no sense to charge coin buyers per lot. Auctioneers should want bidders to win many! If anything, discount shipping for multiple lots. And charging for some packing supplies is suspicious, especially when coins are shipped wrapped in torn newspapers or scraps from US Post Office boxes (a violation) and free boxes from that local post office, too.

    These are problem shippers. But you'll also find several auctioneers on Proxibid who understand that shipping matters and who do a respectable job.

    Several Proxibid auctioneers, like this one, state: "Exact shipping cost will be charged.Sometimes additional postal services or insurance may be added to the invoice if need, based upon value, weight, size and destination."

    Some auctioneers charge a flat fee, $5-$8, and ship within 24 hours. 

    Those tend to be ones that have repeat business because, as Internet sellers know, customer service is paramount and shipping is the major component of that service.

    Counterfeits Taken Down on Proxibid

    March 2, 2016 5:46 AM by Michael Bugeja

    ​A purported 1799 Draped Bust Silver Dollar, which should have a large eagle reverse, appeared this month in a Proxibid auction. The fake has what appears to be a 1797 large eagle reverse. There are other suspicious diagnostics, but these stand out.

    I contacted Proxibid through its "Report the Item" link when I first encountered the counterfeit. The lot was listed only as "Silver Coin." Bidders had enough knowledge to know that early silver dollars are rare; but they seem to have had insufficient knowledge to tell genuine from counterfeit. When bidding exceeded the $500 mark, I contacted Proxibid again, and this time the lot was removed.

    I also spotted a fake California fractional gold lot in another auction whose seller I know. I sent her an email and a Coin World link and this lot, too, was taken down. This was a conscientious seller who happens to follow this blog, so everything went well. 

    Connect with Coin World:  

    This morning I found another fractional gold fake and reported this to Proxibid, too. 

    I realize that in the numismatic community we abhor counterfeit coins because when discovered, they so infuriate buyers that they often drop out of the hobby, particularly if the coin is a perceived rarity and they have paid hundreds or thousands to win it. 

    However, I also keep in mind that Proxibid is a technology company. Its job is to notify the auctioneer. If the auctioneer refuses to take down the lot, because they mistakenly believe all sales are final--tell that to the US Government when selling a fake--then the buyer has some leverage if the "Report the Item" is used.

    Selling counterfeits is against Proxibid user rules. 

    The lesson here is to learn about counterfeits by reading the work of CW's Michael Fahey and other experts. Knowledge not only is power in numismatics; it also is fraud insurance.