A Treasury Department Office of Inspector General probe closed in 2015 confirmed that the U.S. Mint oversold and overshipped the 2014-W National Baseball Hall of Fame $5 gold coins to customers by more than 100 coins above the statutory authorization. However, no provisions exist for civil or criminal penalties for the federal law violation.

Auditing of program sales indicate that, although the Mint oversold the coin, the final net mintages combined in Proof and Uncirculated for the commemorative gold half eagle fell just below the 50,000 limit after all returns were reconciled.

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An oversight that resulted in selling more coins than were permitted under provisions of the National Baseball Hall of Fame Commemorative Coin Act, Public Law 112-152, is being blamed on the Mint’s transition between order fulfillment contractors.

Transition

The Mint switched contractors late in 2014 from Pitney Bowes Government Solutions, later Novitex, in Plainfield, Ind., to PSFweb in Memphis, Tenn.

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The transition required that numismatic product inventory be moved between warehouse facilities in the two cities. According to the report, stock was not properly segregated to prevent the sale and shipment of too many coins.

The transition between order fulfillment contractors occurred with the close of the federal Fiscal Year 2014, which ended Sept. 30, 2014, and the start Oct. 1, 2014, of FY2015.

The transition also coincided with the Mint’s conversion to a multimillion-dollar online order management system that replaced a system more than a decade out of date.

According to the TOIG investigation report, the Mint’s then acting (and now chief) counsel Jean Gentry was notified internally through the Mint’s Office of Protection of a possible breach in the production and sales protocol for commemorative coins.

The probe determined that the West Point Mint struck 32,500 Proof and 17,750 Uncirculated Baseball gold $5 half eagles for a combined total of 50,250 coins — 250 coins more than the legislated authorization.

It was determined through the investigation that the Mint commonly produces coins above the statutory limit to replace “damaged or unwanted” coins.

The overproduction is executed when “demand indicates a potential sellout,” according to the TOIG investigation report.

In the case of the Baseball coins, the additional 250 coins were produced in August 2014. TOIG investigators learned that the extra quantity of the Baseball gold coins was maintained by Pitney Bowes/Novitex in Plainfield, Ind., as “do not sell” product, but in the transition, the overproduction was somehow recategorized from protected to “available for sale” and was distributed by PSFweb.

The snafu resulted in an oversell recorded as 104 coins above the statutory ceiling.

Audited mintages for the program provided to Coin World by the U.S. Mint on June 15, 2017, recorded a total final mintage of 50,104 coins — 32,427 Proof pieces and 17,677 Uncirculated coins.

It is customary during the order reconciliation process that product is made available to customers next in line when orders are canceled because of returns or expired credit cards. This practice usually allows product to be sold and shipped to customers without exceeding the issuing limit established under the enabling legislation.

Examples of the gold coins still in their original Mint packaging are selling on the secondary market for nearly $900, more than double the issue price, with certified examples trading much higher.

Resolution

Subsequent to the TOIG investigation, the Mint has implemented procedures to prevent recurrence of the overselling above statutory maximums.

For future coin programs, any additional production above established limits to cover damaged coins and returns will now be maintained at the production facility where the coins are struck. The extra production will not be delivered to the contracted fulfillment center until customer returns actually occur. Such “overage” production is then to be properly marked and segregated at the fulfillment center warehouse.

The Mint’s online electronic sales system has been modified to automatically prevent sales beyond authorized limits.