Buying on the Internet

Buying Coins

The Internet has expanded the available market place enormously. Asian coins are rare in the US coin show market. Restrict it to coins types that circulated in Lanka and you hardly find any to add to a collection which has all of the more common types. Visiting the two large local coin shows held each year since 1993 in Baltimore and after 1996 in Pittsburgh I used to pickup one or two coins of interest.

Since about 1995, an increasing number of households have purchased computers and have got an E-mail address. The Internet and eBay have taken a leading role in collections because of its strength to put a buyer in contact with sellers world wide and replacing part of the role of Coin Shows. Many collectors and dealers some who would not naturally take to computers and the web are being forced to join so as not to miss out.

There are distinct advantages of a coin show and I do try to attend a few each year. However it is more to chat with some dealers, show some of my recent purchases for comment and see what they have for sale. In USA only a very small fraction of dealers cover World Coins or Currency, since most sell only US-coins or at most Ancients coins of Greek or Roman origin. I now find hardly anything of interest to buy, and find it painful to look through stacks of coins in boxes. I find the prices of Books and coins about a factor of 1.5 to 2 times larger than on the Internet. Part of this reflects the 40% markup that a dealer must put to cover his cost of selling and profit. One regular dealer told me that it costs him about $500 to attend a Show and it had been a loss in the last few Shows he had stopped attending them. Over the last few years there has been a clear trend of the Coin Shows being attended by less dealers of non-US coins.

Since mid 1997 I have purchased on Internet Auction such as on ebay. They make available a regular stream of even rare coin. Many dealers now regularly list on the Internet even their extensive stock of not so expensive coins. It is much faster to search through computer lists than stacks of coin boxes or binders. Over the last 7-years I have purchased over 300 coins on the Internet, and except in a few rare occasions was very happy with the quality of the coin I purchased and the price I paid for it. If you are patient and study the market without rushing to out-bid the first auction you see you can find any coin at an attractive price.

If an item you have looking for comes up for Auction only after say few years, it is probably rare and one is tempted to bid high on it since there may not be another listed for a long time. However an interesting case was the Proof version of the 1990 CBSL 40th anniversary crown sized silver coin. I knew that only 200 were distributed in Lanka and when I saw one appear for the first time on Ebay in 2002 March I purchased it with a winning bid. Soon after I found out that 2000 more had been sold by the Royal Mint, Three more appeared on Ebay Auction within a month from different sellers from various parts of the world, which discounts the probability that it was some single dealer stockpile being put into the market, and now suspect it was prompted by the first sale. So one does need to know if an item is truly rare like for example the 1945 issues of Wireless World which is clearly my most exciting find on Ebay, and took over 2-years to show up in a favourite search.

One however needs to learn to recognize the fakes which unfortunately are listed frequently. You need to learn to ask all the questions from the seller, such as to guarantee of authenticity if the coin is expensive. The ANA publishes a Dealers Code of Ethics, which states that terms and provisions may NOT provide a time limit for the return of a counterfeit coin unless dealer has informed the customer that a coin may not be genuine and buyer has agreed that the coin cannot be returned to seller for a refund in the event it is determined to be counterfeit. For low value coins the transaction cost including postage makes any returns a waste of time. I have returned only two in about 400 purchases. Make sure the image listed is the same as item on auction. Many sellers will reuse an image of coin without any indication to sell many of the same type.

When Yahoo auctions was free coins were listed more expensive than on ebay since the lack of buyers on Yahoo makes most items sell at the opening bid. Yahoo started charging in 2001 Jan and listing dropped by 90% to under 5% of that on ebay. If you are the only bidder on Ebay then you need to be sure of the market value. Some sellers start low which attracts bids and establish the value. Some start high and reduce only if they don't get any bids. After seeing a coin I wanted sell for $225/- I felt I was doing OK buying the next listed by the same seller for $185. However a year later another sold for $100 getting no bids at $150 and $120. I now have much more patience. If you look over a long period you will item you really like, with an authenticity you can trust, at a price you can afford. But that process is far more expensive time wise, but then is part of the joy of collecting.

It is easy to overlook that time is money, and that it is not worth spending too much time trying to save a few dollars. Unfortunately there are few who take this to an extreme and bid high without regard to value. There is not much one can do about them. Most bidders put only a small overbid to prevent the price rising too fast.
There are many type of Auction on ebay.

It has been well established that a snipe or bidding at the last few seconds of an auction is to the buyers advantage. It reduces the active biding which is what raises the price of an item. It was an art and a thrill to get a bid in at 5-10 seconds before the end of Auction and win an item. This was particularly so if someone else was trying to do the same. The biggest problem with this approach was that you often forgot and sometimes miss-timed the snipe. But that in away is good damper on your addiction to collect coins and prevent winning too many items of lower interest.

To snipe you open two browser windows and display the listing in both. About 1-2 minutes before the close of Auction you bid and get the bid confirmation screen. On the other screen you list note the time remaining and list again. The difference in the rime remaining which will typically be under 10 seconds is the time taken for your request to reach and be replied by ebay server. But note if you see 20 seconds left display it is already 15 seconds left and if you bid at that time the ebay server will get your bid at 10 seconds which is OK. I have on occation won with a 0 seconds left reply. The perfect snipe. But remember to bid the maximum you are willing to pay since there will be no opportunity to increase your bid. You need to bid at about 40 seconds to be able to bid again. It takes about 1 minute to bid starting from displaying a bookmarked listing. If you are that late, then it is better to bid as soon as possible rather than try to time a snipe with a second screen.

Since E-bay has a confirmation loop it takes a minimum of about 10-15 seconds to bid, which means that there is practically no difference between an under 10 second snipe which is difficult and an under 20 second snipe which is easy. No bidder watching can manually come in and rebid on an item under 20 seconds since by then the bidder would need to have already commited to a higher bid. A bid at 30 seconds would even allow you to increase your bid if you notice you just missed.

Recently sites like esnipe and auctionsniper will do the snipe for you for an nominal 25 cents or 1% final value. Maybe ebay will soon cut in on this market either to prevent it or take the commission themselves. It will probably take the thrill away and cure my addiction. An automated system will always be more efficient in getting a snipe in close to the end than a manual snipe. To win in such a case it is necessary to bid the maximum you are willing to pay. It is always good to do that if sniping. If most of the regular snipers switch to automated snipes then it will become less important to snipe during last few seconds and an easy under 30 second snipe is all you need. One time however I watched an end of Auction I had setup to snipe and the snipe didn't go through. In this case I could have easily sniped by myself. I was later told that during busy weekends there could be large fluctuations in the responce time from different eBay servers.

The number of items I am buying on ebay has gone down significantly after a peak in the first half of 1999. Part of this decrease however is probably that most of the remaining items I would like for the LakdivaCoin collection are too rare to get listed on ebay and even if they do too expensive for me to buy.

Live Auction are more important for the more rare coins. Large collections are still rarely put on ebay. It appears that although there are more persons buying on the Internet, there is probably more money spent on live Auction serving the richer collectors who are not on the Internet. Bidding on live Auction is not that easy. Most auction houses are reluctant to mail catalogs due to the expense, or put them online due to limited usage of these services. Proxy bidding by computer feels safer to me than mail in bids, IMHO it is a matter of time before most auction go online so that you can bid live from where ever you are in the world. In 2002 some Live Auction such as from Heritage and Malter's have been posted on ebay Live Auction on which you can even bid live against a floor bidder using a Java enabled browser. However absentee proxy bids before the opening of the auction are like any other mail bidding. You don't know if you have been out-bid before the start of live Auction which lasts on average 15 seconds. The format is quite nice with a static image of item appearing on screen, with a chat dialog text on the side showing bids.

I never felt safe sending a high bid to a Auction House to win an item. I only took my chance bidding close to the minimum bid allowed, and let it go otherwise. I have felt more confident that E_bay will not max out my bid and know they do not. However one needs to watch out for Shill bidding, particularly in E-bay live where an Auction floor bid maybe placed to max-out the mail bid. Since the identity of Floor bidder is not given it is very easy to hide the shill bid from usual checks. Probably was a standard practice in live Auction houses, which are adapting to ebay Live.

I am now buying more coins on my annual trips back to Lanka. Buying back in Lanka has also advantages. It is nice to have examples of foreign coins that actually circulated in Lanka. Some collectors make this a big issue. IMHO it is not that important as long as one uses publications such as Codrington to ensure you only include types that have been published to have been found in Lanka. I try to match the year of issue but that too is not always easy. Anyway it is also illegal to export coins older than 100 years out of Lanka. The Internet however allows one to exhibit Lankan heritage to the world without exporting the items, and the prohibitive cost of good quality color printing.

How much to bid

As discussed above the snipe is the best way to bid. However you can snipe with only one bid and how much to bid one needs to decide. If you had lots of money you can risk bidding a large amount to ensure you will win, unless there is another who tries the same and the item will sell far above market value and the seller will be very happy.

In a live auction you can see the interest of others and bid accordingly. That was the way even ebay is supposed to work but the snipe changes the environment. A unknown bidder can come at the last few seconds. Some Internet auction adopted a flexible end time which extended a few minutes each time there was a bid. This kills the snipe. IMHO the ability snipe was added to the popularity of eBay and it appears it will remain that way.

Basically one should bid the maximum one would be willing to pay for the item. However this is not the most economical since the value of the item may be less and if you bid against another person who has lots of money you might win this item at a high price, and not get the same item that may appear again in few weeks.

If an item is unique, has not appeared on auction for a long time, and I am really keen on it, I might bid as much as 2 to 3 time the estimated market value just to be safe. If the item appears regularly then there is no harm in bidding 10 or 30% below market value. Items often sell in this range. If I see an item selling with no reserve far below market value, particularly some thing I had bid a lot more and won in another auction, I might be tempted to bid 50% of market value. When a particular item which sold originally for $150 and currently on the Internet for $99, sold for $25 including S&H I thought I have got a good deal. A year later I got the same item for $8. including S&H. Many products sold as sets in the 1970's and 80's I have seen sold on eBay for far less than their original price. I have for example obtain most of the Sri Lanka items from the Franklin Mint countries of the world sets at little over the Silver value.

The Auction Listing

As a buyer of coins I find most Auction listing are of poor design. Some of this could delibarate to force the buyer to look at listing or posted images to findout anything about the coin on Auction, but in some cases it is pure lazyness or ignorance on the part of the seller to what is needed. Given below is a list of items I would like to see in a title and description in an auction listing of a single world coin. A better listing will surely reduce the number of questions to be answered and save the time of both the seller and prospective bidders on the item.

  1. Title must identify the coin type uniquely - Country - denomination and year. A catalog number is not that useful in a title.
  2. Image of both sides of the actual coin on Auction, scanned or digitally photographed to a resolution of about 300 dpi or higher taken outside any case such as a 2x2. Crop the scanned in images so that most of the image is of the Coin, and not the blank scanner field of view.
  3. Guarantee of authenticity and returns should be explicitly stated. For rare items some provenance is always interesting. Claim of ignorance is not an acceptable excuse to list a Forgery or doubtful coins without any caveat.
  4. Grade the coin even approximately even you just say Proof, Uncirculated, High grade, average or well circulated.
  5. Weight of coin to at least the nearest 0.1 grams should be given unless the coin is Machine Struck. Low cost Digital Scales to even 0.01 grams are now available to do weigh a coin very fast.
  6. Lots of coins of put into a single listing is not very attractive. Collector interest is varied. I once saw a lot of currency with a specialty Album sell for $55 when the identical individual sheets sold for a total $160 around the same time. I personally like to buy items less than about $50, and probably will not bid on a lot of say 3-items listed for over $100.
  7. Limit the description to the coin on Auction. Do not use any keywords in the listing that are not associated with that specific Coin.
  8. Postage and handling cost should be described. A statement such as Actual postage, Insurance + $X can always be stated. Give also policy on mailing multiple lots. Handling cost should be reasonable, particularly for low value items.
  9. Payment methods accepted, particularly if Cash payment is required. Online Payment with services like PayPal (which was purchased in 2002 by ebay) have made it simple to make even international payment. The about 3% cost to sellers is less than using credit cards for most dealers. Bank Charges for some reason make it still not very attractive in Europe.

Feedback Ratings

I have never sold on the Internet since I feel that any profit will not cover for the time wasted in the process. I leave feedback * to sellers I buy coins from based on

Feedback is supposed to guide you when bidding. But this is no safeguard. I know of one seller who had no negative feedback ship me a lower grade coin and when I complained left me the only negative feedback I have ever got. That seller has got lot more negatives since for the same kind of fraud, and has now closed his Ebay account, and deleted his feedback profile. Probably started a new Ebay account. This illustrates that negative Feedback doesn't stop sellers continuing in the same style. I also know of a seller who sold coins which two different buyers determined after receipt to be forgeries, but never left any negative feedback. This seller has fortunately been recognized and sold far less on ebay, and for other reasons now been suspended by E-bay.

Ebay feedback is one measure although we all know the system is not perfect. Feedback is a fully automated brain-less system which allows any report to be recorded and assume that positive reports will out-weigh the few misguided and sometimes malicious negative reports. Feedback can only identify the really bad dealers, but they anyway don't sell for too long . Also a negative rating from a $500 purchase is counted same as a positive from a $1 deal. So for example a dealer who sells lots of low cost good coins and profits from selling a few expensive fakes, will escape detection. Many SCAM artists will buy or sell a lot of cheap items to buildup a feedback rating before selling a large amount of fakes. When detected they get unregistered by eBay and start new with a new identity. Most of the expensive fakes IF identified anyway gets returned and go unrecorded as most buyers who are able to return for a refund see NO need to leave any negative feedback and avoid the risk of retaliation.

PowerSellers need to maintain better than 98% positive feedback. A larger fraction particularly in a Seller who has a high total number needs to be looked at before bidding. If all of the feedback is from Buying, or if the feedback comes from a lot of small purchases in a short period, that should sound the alarm bells. If the feedback has been made private just avoid the seller unless you are crazy.

Attempt to minimize sale of Forgeries on Internet

In general, coins made in the same era, by other than the authorized minting authority, are called counterfeits, and those imitations created in more modern times forgeries. Even coins in reputable collections of major institutions must be considered suspect unless the provenance (a pedigree or "proof of origin") establishes the coin as found in context at a controlled archaeological site.

A basic need of a collector is to decide if to bid or buy an item wanted for a collection based on an image and/or description posted on the web and the reputation of the seller that can be found out before the end of the Auction.

In 2000 December Alan VanArsdale started egroup CoinForgeryDiscussionList to have an open forum for discussion of sale of Forgeries. The discussions are archived and online. If they are edited, summarized and properly index they make a very useful reference.

Clearly a web-site of known fakes will help, if in a well organized, search-able online database. They will particularly help new collectors tell the obvious fakes from the probably real coins. To identify dealers who sell fakes it is better to have a database of few well documented independently refereed cases in some confidential system which can be used to help make a decision if to bid or buy an item.

Even having a lists of coin types-years on which forgery Reports have been published is very useful. I suggest a complete index to the Bulletin of the International Bureau for the Suppression of Counterfeit Coins (IBSCC) that ANA now publish in collaboration with International Association Professional Numismatists (IAPN). I was informed in 2001 May that Brian Silliman of ANA is compiling such an index, and have seen an incomplete but nice draft.

Ebay links to online authentication for autographs, it will be nice to have something similar for coins. For example when a suspected coin is sold a high quality scan of 300 dpi or higher is sent to a group of experts in that field to authenticate and and the reports and images compiled indicating the mode of evaluation appended by any response from the Seller. The buyer pays all postage & Insurance costs if the coin itself need to be sent, and the expert(s) do the review free of charge.

Each of us have some knowledge and experience. The power of the Internet is to be able to share it wisely via forums like this, so that all of us don't make the same error over and over again and keep a forger in business forever.

IMHO what is ideally needed is something run along the lines of a credit Bureau reports from which remains somewhat confidential but to a large extent is able to minimize financial fraud, although have clearly on rare occasions hurt some innocent persons.

I personally follow the policy of never buying any coins from any dealer I have seen selling forgeries I can obviously recognize as such. In this way I decrease my probability of buying a forgery which is more difficult to recognize as such by either the craftiness, carelessness or ignorance of the seller. Even those in the "Tourist-Fake Coin" trade in Lanka sell some obviously genuine coins, but that is to mainly improve their chance of passing off a fake. Boycotting them completely is IMHO the best option to follow.

Scams selling Replica Coins as Genuine

Despite all efforts over many years to educate beginner coin collectors of scams on the Internet there is a thriving trade of fake coins on the Internet. The largest is in ancient Greek and Roman coins which are the most popular among those who collect outside the modern era. Read my notes on the Toronto scam which is most illustrative of their operation.

I investigate inform sellers who list on ebay of coins attributed to Ceylon which are obviously fake. The E-mail exchange rarely goes beyond the sellers removing item from Auction and thanking me for the information. Most have little knowledge of Ceylon coins and take the advice given. However few email exchanges have been extended and are more interesting to read. This I find particularly true for fake coins which reappear for auction.

I think the numismatic community led maybe by ANA should call on eBay to create a page for sale of Coins as they have done for stamps and request eBay to direct every bidder of a coin on a Private Auction to that page so that buyers are explicitly warned about the dangers and what they should look for to minimize their chances of getting scammed or sold fakes. Seems that APS has been more active in this effort than ANA or ANS.

The main problem is that it is difficult for eBay or USPS to prove that the item sold was a forgery. Authentication is not an exact science. Maybe if the seller is proven to have purchased them directly from a well known replica firm which is willing to testify to the sale of these replicas to the eBay seller. But by manufacturing those coins without the word COPY as required by the Hobby protection act the firm has also done wrong.

Posting Coins by Mail

Standard Letters go though fast sorting machines at post offices and need to be well packed to ensure no damage to them. Corrugated paper like from Safe-T-mailer are used by most sellers on the Internet and are sufficient to protect the coins. The coins could also be wrapped in tissue. I have so far not had any damage done or lost any coins sent by Mail. The only occasion I had some concern was on two shipments one from Australia and the other from U.K. which took over 6-weeks to arrive by Air-Mail.

I am not sure how much USPS insurance under US$50 is worth since that does not provide any certificate of mailing and you can claim only if damaged and not lost. It provides no tracking. Why attract attention which might have mail stolen. Insurance above $50 which costs over $2.20 is probably useful for expensive items (1-2% of value). USPS Insurance allows you to file a claim if the item is not received after 30 days of posting and presumed lost. The Original mailing receipt must be presented when filing a claim. The article, container and packaging must be presented to file a claim for damage or loss of contents. If item costs less than about $10 IMHO the best option is Online confirmation of Delivery which costs 45 cents. It is available of small packages sent by First Class as long as it is over 3/4 inch thick. A empty cigarette-like box or foam peanuts will make a small jiffy bag to required thickness.

Many dealers self-insure since they find that more economical. Posting payment often request in Cash because of high bank charges on even small payments to Europe and Australia was a bigger risk. International PayPal has finally solved that problem. Ebay's own Billpoint has copied it and since it is integrated into Auction listing, payment is just a few clicks after you have registered. Does not allow user to add text comment to payment. The general rule is to send payment before shipment, and dealers do have a bit more protection as they clearly need. Auction provide some buyer insurance for mid priced items, between $25 and $200. On Dutch Auctions this amount is of the Total transaction (No of items*cost per item) that is insured.

Note however that to safeguard national heritage it is a crime by Sri Lanka Law to export genuine antiquities including coins older than 100 years out of Sri Lanka, although it is not a crime for collectors to buy, sell or own them in Sri Lanka. So to buy an ancient coin from Lanka by International mail you are either an accessory to the seller breaking the law or or YOU are breaking the law of the Hobby Protection Act by importing a forgery :-)

Talking of secure postage, an ebay Seller in Australia sent me a $5 coin for which I paid $1.50 postage. It was sent by registered Air-Mail. The U.S. Postal Service wouldn't even deliver to my wife. I had to go to Post Office show picture ID with my current address, sign and pick it up from their locked Safe !!!. So if you want to be fully safe, but maybe annoy the buyer ...

Shipping & Handling is seen by some sellers as a way to increase the price cover all of their cost in selling. The item cost to buyer is total including cost of making Payment and cost of Shipping and handling charged. So for low value items postage can add significantly to the price particularly if purchased from overseas. So unless S&H is specified I will always ask. One time seller insisted and charged for Priority mail after I asked for least expensive postage. Item was posted by First Class for lot less. I requested a refund of difference which came after a bit of nudging to PayPal. I felt it was important to send a message to seller that he did wrong.

Global Priority mail is a nice way to post items particularly to Europe and Astralia. If item is small and heavy (upto 4lbs! ) if stuffed into a small 10x6 flat rate envelope will go for $5.00 including Internet Tracking.

Some learning experiences

In 2001 Sept I purchased on Internet for $100+6(S&H) a MyWeigh MX-50 digital scale. In 2001 Oct a seller with feedback rating of 6 an with one negative in two sales listed 50 of them on Ebay Dutch Auction with stating bid of $25. The day before the Auction closed a week later there were only 2-bids, either because buyers saw this as "too good to be true" or had no knowledge of this new product recently put on the market. A posting by me on generated 7 more including mine. The seller refused to sell E-mailing a series of contradictory excuses.

My complaint to ebay resulted probably in only a warning, I got a long document about the importance of giving negative feedback even at the risk of getting retaliatory feedback. Only two of nine bidders left negatives which is a measure of why feedback does not work the way it should. Ebay ensured they got their commission as the Auction listing remained open without cancellation. Probably since she was an employee of Paypal did not send me any E-mail reply. PayPal did phone me and request more information and I sent them the correspondence which was not acknowledged. Seller lost her Business paypal account. She seems to have refunded part of paypal payments she received, keeping probably the transaction cost.

Some useful links