US Coins

Ever wonder what happens to unsold U.S. Mint products?

Have you ever wondered what happens to United States Mint products when a particular item does not sell out? The Mint has processes in place for such an occurrence, but how the Mint deals with numismatic product inventory left over from closed-out programs depends on whether the items contain precious metals products.

When the U.S. Mint closes a program and products still remain in inventory, a process called “de-trashing” is used, according to Mint spokesman Michael White.

“Items identified for de-trashing are validated by the Department of Sales and Marketing (SAM) Product Management Branch Chief through the order management system and reconciled to the general ledger,” White said July 22. “The approved and validated list is then sent to the Accounting Division for review and approval. The Accounting Division reconciles the de-trashing list to the general ledger. Upon the Chief Financial Officer’s (CFO) approval, the list is forwarded to the Executive Steering Committee for final authorization to de-trash and melt the listed items.”

These specific steps in the physical de-trashing process for nonprecious metal products are taken, according to White:

? A task order is issued and the approved list is sent to the Fulfillment Center — the Mint’s contractor, Pitney-Bowes Government Solutions in Plainfield, Ind. — for the de-trash process to begin.

? The Fulfillment Center physically moves the inventory to the designated de-trashing area. Products are transferred to raw materials inventory to indicate the correct value. De-trashing begins at this point.

? Items are disassembled into their component parts by denomination or metal type. The Fulfillment Center generates a data sheet.

? De-trashed items are placed in secured containers and labeled.

? A United States Mint representative arranges the transfer by armored carrier of secured de-trashed items to a designated United States Mint facility.

? United States Mint Police and staff witness the destruction, which is done with a coin destruction machine — manufactured by Kuster Engineering B.V., a Dutch firm — that “waffles” the coins, rendering then unusable as coins. The scrap metal is then sent back to the strip manufacturers for recycling. The U.S. Mint introduced the Kuster equipment in 2003.

The Mint follows a slightly different physical de-trashing process for precious metal products:

? A task order is issued and the approved de-trash list is sent to the Fulfillment Center for the de-trash process to begin.

? The Fulfillment Center physically moves the inventory to the designated de-trashing area. Products are transferred to raw materials inventory to indicate the correct value. De-trashing begins at this point.

? Items are disassembled into their component parts by denomination or metal type. The Fulfillment Center generates a data sheet.

? The Fulfillment Center sends SAM a final list of de-trashed items.

? The appropriate United States Mint facility is sent the list of de-trashed items (San Francisco Mint for Proof silver coins; West Point for all other precious metals products).

? The Fulfillment Center places de-trashed items in trays that are vacuum-sealed. These trays are placed into securely taped and labeled cardboard boxes that are then placed in wooden crates. The crates are sealed and recorded.

? SAM arranges for an armored carrier to move the de-trashed products. Shipping authorization is approved and shipping details are provided to the United States Mint Police, chief financial officer, plant manager and Fulfillment Center.

? Precious metal coins (except the .900 fine silver Proof dime, quarter dollar and half dollar, which are sent to San Francisco), are returned to the West Point Mint, where the shipment count and weight are verified before coins are shipped to contractors for melting. Personnel at the West Point facility coordinate all aspects of the melt with fabricators, arranging for shipment of the secured containers by armored carrier to the outside vendors that melt the coins, as witnessed by United States Mint Police and staff.

White said when it comes to the de-trashing of Silver Proof sets, the silver coins from prior year sets are removed from the packaging, placed into bins and are stored at the San Francisco Mint. The facility then schedules melts with vendors in which the coins are melted down and the silver is refined for future use, White said.

White explained, “Metal reclaimed by the United States Mint as a result of destruction or a program’s end is recorded on the balance sheet as a raw material inventory item. That inventory item would be carried at the same value as the similar existing inventory.

“The offset to the increase to inventory (known as the ‘credit’ side of the journal entry) would be against the expense of the program that ended, White said.

Coin World asked U.S. Mint officials why the Mint continues to offer coins struck and dated in previous years beyond the end of the calendar year, rather than destroying the leftover inventory at year’s end.

“This was done only at the end of 2008, when the United States Mint began auditing inventory to transition to our new fulfillment center [from PSF Web in Memphis, Tenn., to Pitney-Bowes Government Solutions],” White said. “At that time it was determined that it would be more cost-effective to sell as much of that inventory as possible rather than de-trashing it.

“In addition, we have consistently used the term ‘Last Chance’ as a notification for products that are being discontinued.”

If product is left over at the close of a program and destined for destruction, that material to be de-trashed is not reported as part of the “mintage,” according to White.

“The United States Mint only reports sales figures,” White said. “Even for products with pre-established maximum limits, we still report out only sales — coins that have been monetized through issuance — not production figures.”

White added, “Any product/program with remaining inventory at the end of the selling period (e.g., annual sets, commemoratives, etc.) goes through one of the standard de-trashing processes described above.”

The Mint does not publicly report the number of each coin destroyed nor the rejection rate as part of the overall production numbers. ¦


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