US Coins

Mint officials identify scope of ‘bots’ in online sales

Before the U.S. Mint was able to recently implement modifications to the bureau’s website to stifle cyber attacks during limited-edition product releases, 60% of the online traffic was from users employing electronic scripts for bots to circumvent household ordering restrictions, according to Kirk Gillis, deputy associate director for sale and marketing at the Mint.

Gillis was one of five senior U.S. Mint officials who participated Aug. 25 in an online conference with the numismatic media.

The other Mint officials participating were Matt Holben, associate director for sales and marketing; Mint Director David J. Ryder; Kristie McNally, chief financial officer; and T.V. Johnson, chief of the Office of Corporate Communications.

Officials shared details of what the Mint is doing to more widely distribute limited numismatic products. Actions include employing integrated software packages to streamline the ordering experience.

Holben said that, over the past 18 to 19 months, the U.S. Mint has experienced exponential growth in numismatic and bullion products sales, to where demand could not be filled.

The growth included buyers using technology to circumvent restrictions on the number of orders of an offered product allowed per individual.

The cyber attacks were being coordinated by buyer groups and flippers solely interested in obtaining product for resale at considerably inflated prices, Holben said.

Mint officials are addressing both the wholesale and direct-to-consumer markets to maintain a balance, Holben said. Technology improvements have mitigated the cyber attacks, he said.

Holben said a number of technology improvements were made to the Mint’s e-commerce system, but would not disclose what companies provided what improvements, citing legal prohibitions.

Also citing advice from the Mint’s office of chief counsel, Mint officials would not disclose the identities of the 18 dealers who comprise the bureau’s controversial Authorized Bulk Purchase Program.

The ABPP allows participants to place orders that, in combination, can amount to up to 10% of the maximum mintage of a designated limited-edition product. ABPP dealers are assessed a premium, up to 5% more than what is charged to the public for the same product. The ABPP dealers are able to place their orders and pick up the ordered product a week before the product goes on sale to the public.

Holben said offering a percentage of the limited product to the ABPP has helped to stabilize secondary market prices.

Holben said enrollment options for some numismatic products allow the Mint to better forecast demand. As well, the Mint conducts customer surveys and has marketing consultants seek input on consumer demand for the bureau to better establish mintages, procure necessary materials for planchets and schedule necessary production at each of the four production facilities.

Demand for some core U.S. Mint numismatic products has outpaced demand for previous years’ releases, Holben said. Some releases, for which sales were expected to last for months, have been absorbed in a matter of minutes.

To better address product scheduling and to mitigate overproduction, quarterly projections of demand are sought from the 13 authorized purchasers that buy the Mint’s bullion issues, including American Eagle and American Buffalo issues.

Having programs where products can be pre-ordered earlier in the year for delivery later in the calendar year yields a number of benefits to the Mint, Holben said.

With commemorative coin programs, for example, the designated recipients for the surcharges on the purchase price of each coin have received the net proceeds much sooner after the Mint first recoups its production and associated costs.

Circulation demand

U.S. Mint Director David J. Ryder said circulating coin production staff at the Denver and Philadelphia Mints are working six days a week with mandatory overtime to meet the needs of the Federal Reserve for circulating coinage distribution.

“The Fed is taking all we can strike,” Ryder said.

Ryder took the blame for the bureau introducing multiple new products to entice new customers without fully recognizing the increased demand that would hit Mint products once the pandemic struck.

“We realized we didn’t anticipate the consumer volume,” Ryder said.

Processing orders

Gillis said to optimize payment options for customers buying select products, integrated software over the past 18 months has been able to increase the processing of orders from 96 per second to 217 per second.

Gillis said some bot activity is still present, but there is some legal question about whether all of it can be blocked.

Gillis said the Mint is looking at the possibility of adding a “waiting room” component to better moderate the flow of online traffic.

About the bots

According to Wikipedia, “an Internet bot, web robot, robot or simply bot, is a software application that runs automated tasks (scripts) over the Internet. Typically, bots perform tasks that are simple and repetitive much faster than a person could.”

New conditions were imposed July 15 by the U.S. Mint on participants in its Authorized Bulk Purchase Program, designed to prevent their circumventing the Mint’s order limits through use of automated web robots or other methods.

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