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eBay Rare Coin Bidders Survival Guide

Beginner to Expert in 12 Easy Steps

No matter where you live or what time it is, eBay enables you to buy or bid on rare coins you want for your collection or as an investment. The process is convenient and enjoyable, and you can get excellent quality at affordable prices. (eBay has created marketing efficiencies for sellers, so you don't pay for a lot of overhead.) But, you can also get burned. A few sellers hidden behind eBay IDs misrepresent coins to extract quick bucks from gullible buyers. These sharks are easy to identify and with a little knowledge you can avoid problem coins. Simply follow these 12 steps to ensure a positive and rewarding eBay coin buying experience.

1) Check the seller's feedback
The very first thing to do before bidding or buying is to take advantage of a remarkable evaluation tool provided by eBay - feedback. Winning bidders or outright buyers can leave positive, negative, and neutral comments about their transactions. eBay posts these comments and compiles a "feedback rating" based on them. See it by clicking the "View Seller's feedback" link. A positive posting adds one point to a seller's feedback rating; a negative comment subtracts a point; a neutral statement doesn't affect the rating. eBay publishes the net number of feedbacks plus the number from unique users. To avoid being deceived by a high feedback rating created mainly by the seller's friends and relatives, be sure that a significant percentage of the positive feedbacks are from unique users. A seller who is honest, fair, and competent should have a low percentage of negative ratings. A box on the feedback page shows the number of positive, negative, and neutral ratings for the past six months. Negative ratings of more than 2% are a red flag. I recommend buying only from those who have been selling on eBay for six months or more and have 100 or more feedbacks with at least 98% of them positive. New sellers may offer good products and service, but sending them your money before they meet the feedback criteria isn't worth the risk.

2) Analyze the feedback information
Analyze the recent comments carefully. Remember that most eBayers are reluctant to post negative comments because they are afraid of retaliation (more on this concern later). Slow delivery (which might even be attributable to the method of shipping) is less significant than bad communication, bad service, and/or bad product. Complaints from several unique users that the coins received were inferior to the coins described on eBay suggest that the seller is a predator you should avoid. Check for the "B" or "S" on the right side of feedback comments. "B" means the person receiving feedback was the buyer; "S" means he or she was the seller. Even if the feedback rating is over 100, beware if most of feedbacks show a "B." A trader can make a series of $5 and $10 purchases to build up a positive rating, then use the positive rating to scam people into buying overpriced or never-delivered big-ticket items.

3) Visit seller's "ME" page
Every eBay seller can create a "ME" page. When sellers have done so, a "ME" icon appears in each of their listings, to the right of the user ID and rating. Click on it and check out the seller's self-description. See if there is a name and/or company name (not just the eBay user ID), snail mail address, and phone number (which you might want to try calling). See if there are banking and professional references. If there is no "ME" page, or if the "ME" page does not contain a name, address, and phone number, don't t buy from that seller. It would be very difficult in case of a problem.

4) Know your seller's location
The location of the seller is listed on each offer. eBay attracts sellers from all over the world. Many fraudulent sellers are from third-world countries. They steal a photo from a legitimate offering, display it with a low reserve to attract buyers, often insist on payment by cashier's check, money order, or wire, and never deliver the product. I recommend purchasing only from sellers located in the US, which also avoids problems with customs and long waits for delivery. Within the US, if everything else is equal, consider the tax implications. If the seller is in the same state as you, you may have to pay sales tax. (In California and many other states, rare coin purchases of over $1000 are exempt from sales tax.)

5) Make sure seller is a PNG and/or ANA member
Check the "ME" page for these affiliations. PNG - The Professional Numismatists Guild is the world's premier coin dealers association. Its fewer than 400 members must pass financial and character screening by an outside firm, have a minimum of five years of full-time professional numismatic experience, and adhere to a strict code of ethics. PNG members are in business for the long haul, not the quick rip-off. You can also protect yourself by buying from a seller who is a member of the American Numismatic Association, a nonprofit educational organization chartered by the United States Congress. The ANA does not screen its members, but you can bring a dispute about a coin bought from a member to the ANA Mediation Services. To take advantage of the service, I recommend that you join the ANA. The mediation service alone is well worth the ANA's $39 basic annual dues, to say nothing of the monthly magazine and a wealth of educational information the 28,000-member association provides.

6) Do not be deceived by a coin's certification
A recent survey of coin professionals conclusively proved what many have known for a long time: not all authentication and grading services are equal when it comes to critical questions such as grading accuracy and ability to detect cleaned, damaged, or counterfeits coins. This survey of over 150 dealers show that PCGS (Professional Coin Grading Service, in California) and NGC (Numismatic Guaranty Corporation, in Florida) were ranked "superior." Two 2nd-tier services, ANACS and Independent Coin Grading Company (ICG), were ranked "average." Many 3rd-tier services were ranked "poor" to "unacceptable." Given the significant price jumps between grades, there is no right price for the wrong coin. You throw away your money if you purchase raw (uncertified) coins or coins certified by inferior services. First-time rare coin buyers often believe that they can get a bargain by purchasing raw coins or coins from 3rd-tier grading services at prices that seem right for coins one or two grades lower. The reality is that prices too good to be true almost always are too good to be true, leaving the buyer with a problem coin. High value raw coins or coins from inferior grading services that are offered on eBay often are cleaned, repaired, damaged, or even counterfeit - difficult to sell in the future. Rarely have I seen high quality rare coins sold on eBay at below-wholesale price. Therefore when you seek to acquire a certified rare coin worth $200 or more, protect yourself by bidding on or buying only coins graded by NGC, PCGS, or ICG, three very respected and actively traded certification and authentication companies.

7) Check shipping terms, costs, and payment options
Scroll down below the product description to the terms of sale and read the details regarding shipping. You want to know the cost, speed, and security of the shipping process. Methods of shipping vary from seller to seller. They include parcel post, registered mail, Express Mail, and FedEx, each with or without insurance. When expensive items are involved, you want to be sure that they will be sent as quickly as possible by registered mail insured or FedEx. If your preferred method of payment is credit card, see which if any credit cards the seller accepts. Some sellers offer delayed payment or layaway plans. If you intend to use them, read the details carefully, and request clarification if necessary.

8) Read the return and refund policies
While you are in the terms section, read the policy on returning an item. All legitimate dealers have a return policy. If you are dissatisfied with a coin, you should be able to get your money back. Time frames differ from dealer to dealer; always check to see how many days you have to return a coin for a refund. See if the seller charges a restocking fee or gives only an exchange privilege or store credit rather than a money-back guarantee. If you do not find the return policy satisfactory - or if there is no posted return policy, and the seller will not respond to your email - don't bid or buy.

9) Check online pricing guides
Where can you find guidance on the right price to pay for a coin? eBay itself contains a powerful up-to-the-minute database. Go to eBay's home page, click on "Search," then click on "Advanced Search." In Keywords, type in what you are looking for, such as "1916-D dime." In Category, select "Coins," and check "Completed Items only." Click on "Search," and up comes a list of every eBay sale of a 1916-D dime in the past month (22 sales were listed the day I wrote this), with the final sale price, the number of bids, and a link to the original listing. Off eBay, other excellent numismatic pricing and information websites can help guide your bidding/buying decisions. For pricing, I recommend Coin Price Guide - PCGS (free) and NumisMedia Online Price Guide (full access requires a subscription). Coin Connoisseur contains market analysis and other informative articles, including information on the previously mentioned survey of grading services.

10) Email the seller with questions or concerns
If after looking at the offering you have questions about the picture, the description, the terms, or anything else, do not hesitate to email the seller with a question. Give the seller a few days to answer. If the answer is not satisfactory, or if there is no answer, rethink purchasing from this eBayer.

11) Pay safe
Paying by credit card is an excellent defensive move. If you call VISA or MasterCard, for example, within 60 days of a charge on your monthly statement and say you never received the item, they will credit you for the purchase while they investigate. Unless the seller can prove you did receive the item, you will not be responsible for payment. Sellers who accept payment by credit card know that buyers are protected and are more likely to regularly deliver what they advertise, whether you pay by credit card or not. One more thing while we're on the subject of credit cards: Never, never email your credit card number - email is not secure. Instead, call the seller with your number.

Many eBay sellers don't accept direct payment by credit card, but do accept payment through PayPal. PayPal offers some protection for consumers, but at a lower level than most credit cards, through a more complex procedure. PayPal's Buyer Complaint Policy includes some additional protection for eBay buyers (eBay owns PayPal). Of course, you could dispute a PayPal charge through your credit card company, but PayPal's buyer complaint policy includes potential penalties for doing so.

If you pay by check and want fast delivery, particularly if the seller is in a different state than you, send a money order or cashier's check. That way the seller should be able to ship within 2-3 days, rather than waiting a week or more to be sure your personal check has cleared. To save on their PayPal or credit card fees, many sellers offer a discount for payment by check or money order.

12) Print out the photos
There should be a photograph of the obverse (front) and reverse (back) of the coin (if not, email the seller as suggested in # 10 above). If you're the successful bidder or you use the "Buy It Now" option, print out the photo or save it to a file on your computer, then carefully compare the overall look and the details to the actual coin when it arrives. If the coin you are bidding on or buying is certified by a third party grading service you should see or ask the seller for a photo showing the entire capsule. The capsule should show a certification number, so that you can compare the numbers to make sure the coin you get is the coin you bought.

After you receive your coins:

Inspect promptly
When you receive a coin purchased on eBay, the most important and urgent task is to inspect the coin well within the seller's time limit for returns. If you are not happy for any reason, return the coin using registered mail insured or FedEx, so that you have proof of delivery. Do not keep a coin out of fear of negative feedback by the seller (yes, sellers also get to rate buyers). Most sellers are motivated to keep problems quiet rather than publicize them.

Check the shipping/packaging
Was your coin shipped promptly? Was it packed well? Did anything on the outside of the package, even in the return address, indicate that it contained coins? If so, inform the seller that such an indication is a no-no. You don't want to publicize the idea that your home contains valuable coins.

When posting feedback, be fair and precise
When your transaction has been completed and you're happy with the service, delivery, and quality of the coin, post the positive feedback the seller has earned, and request that he/she do the same for you as the buyer, which will help you in future purchases. If you're not happy with the transaction, let the seller know and give him or her an opportunity to make it right. If you have been fair and the seller will not resolve the problem, don't be afraid to post negative feedback. It's the responsible thing to do and it helps protect everyone in the eBay community. Be certain that you are correct and be factual.

If you have been the victim of fraud or deception, the facts will show that. What if the transaction was "kind of OK"? Maybe the coin was as described, but the seller was slow to ship and the packaging was inferior. These gray areas are suitable for giving neutral feedback. Save the heavy hit of negative feedback for a seller who has proven themselves to be purposely deceptive or fraudulent.

Barry Stuppler urges you to forward this article to friends who buy coins on eBay. Barry has helped thousands of collectors and investors develop successful strategies for acquiring high-grade rare coins. Now in his second term as a member of the Board of Governors of the American Numismatic Association (ANA), he served as chairperson of the ANA's Consumer Protection Committee. He is a founder and a member of the Board of Directors of ICTA, the coin community's lobbying organization in Washington DC.

Throughout his four decades as professional numismatist, Barry has been active in the rare coin community's fight to set ethical standards for dealers. He has consulted with US Postal Inspectors, the Federal Trade Commission, and the FBI to squash scams against coin collectors. In the 1980s he spearheaded a successful legislative effort in California to provide sales tax exemptions for rare coins; similar exemptions have been passed by most states. In the 1990s he founded and published Coin Connoisseur, a magazine devoted to education about the opportunities and pitfalls of coin collecting and investing.

He has been a member of Professional Numismatists Guild since 1982, and was recently appointed by Governor Gray Davis to serve as a member of the California State Quarter Committee, which will help select the design of California's statehood quarter in 2005. Most important, Barry has helped thousands of 1st-time collectors and investors enjoy and benefit from the many rewards that rare coins provide. You can reach Barry at (888) 454-0444 or barry@coinmag.com.