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BBB Consumer Tips for Precious Metals and Collectible Coin Buying

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BBB Consumer Tips for Precious Metals and Collectible Coin Buying Beware of Any Business: These tips were created by the Better Business Bureau, with input • That pressures you to purchase or sell now. from representatives of the local coin and precious metal industry, to assist • That cannot commit to a delivery or consumers in making educated payment schedule. Make sure you are clear buying decisions about the agreement. • That without any apparent assets or references (such as a bank, legal references BBB Consumer Tips for or past customers). Precious Metals and • That offers to pay cash to consumers – as Collectible Coin Buying this is a violation of Minnesota law. and Selling Better Business Bureau of Minnesota and North Dakota 220 S. River Ridge Circle, Burnsville, MN 55337 651-699-1111 • [email protected] • bbb.org Do Your Research: • Understand all company policies before any Common Industry Terms: transaction (e.g. returns, cancellation or • Before consulting a dealer, assess the value delivery policy). Precious Metal - Is a rare, naturally occurring of your items (in the current marketplace). metallic chemical element of high economic Dealers are not required to disclose the • If you have a dispute with the business, try value (for example: gold, silver, platinum and value of collectible items - above and to contact them first to resolve the issue(s). palladium.) beyond their precious metal content - Spot Price - The price at which the before a consumer sells them. Red Flags to Watch For: international market identifies the value of precious metals. It is also what is used by • Thoroughly research a company before • Be careful when doing business with dealers to calculate what price to set for the doing business. Make sure the business has a company that is not established or consumers. Spot price is a reference point the appropriate license and/or bond. Check reputable within the coins and precious that can be used to calculate base value of the dealer’s Business Review with the metal industry, or if you cannot find license an item. Better Business Bureau at bbb.org. information about the dealer. Bullion – A precious metal, in a variety of • Stay away from dealers that do not follow forms, which is traded near its intrinsic value • If possible, locate a local dealer with an such as bars, ingots, coins, or rounds. established location. Unscrupulous dealers state and local laws and regulations. It’s may be found on Internet auction sites or up to consumers to be aware of laws and Numismatic - Items whose value depends online classifieds. regulations. more on their rarity, condition, dates, and place of mint rather than on their bullion • Ask the dealer for references and be sure to • Be cautious of dealers using words like content. check them before you do business. “guaranteed profit” and “great investment.” Intrinsic Value – A value of a coin’s precious • Be leery of dealers willing to transact metal content, which may be different from • If possible, transact with dealers that are its collectible value. part of professional trade organizations. outside of their place of business; This way, you may have more assurance you Minnesota law requires that dealers must Collectible Value - What a collector or dealer are doing business with a dealer committed operate from the location designated in the may be willing to pay for a coin or jewelry to upholding standards. license. which may be more or less than the intrinsic value of the item. • Before making a purchase, consumers • Use your best judgment. As Premium - The additional value of precious should be aware of sales and tax laws that metals, coins or bullion over and above the the old saying apply – Minnesota law requires sales tax to spot price. The premium includes the value be paid on any retail purchases. goes, “If it of fabrication, distribution and a dealer fee. sounds or looks • Multiple evaluations of an item will provide a too good to be Scrap – Industry term referring to a precious good estimate of its worth. true - it probably metal item which has an intrinsic value and is is.” purchased with the purpose to be melted and refined into another form. • Understand specific terms used in the precious metal industry such as spot price, Locked in – When a price has been confirmed bullion, precious metal, or premium. (See between the buyer and the seller it becomes term definitions) a binding contract between the two parties. • Review local and state laws that govern the Subsequent price fluctuations do not change precious metal industry. the obligation to complete the transaction by either the buyer or the seller. .
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