Friday, March 5, 2010
I saw an ad today on TV for the "$50 Gold Buffalo Tribute Proof", from the National Collectors Mint.
First thing I noticed was how "Official" sounding their name was. Like they were trying to sound trustworthy and official. I can see how many people would assume they are an authority in numismatics and are looking out for our best interest by the tone and context of their ad, but don't be fooled by official sounding names, or a crafty sales pitch.
Secondly, the very FIRST thing mentioned in the ad are facts about a coin they are NOT selling!
The advertisement starts off by telling you about the purest gold coin the US Mint ever minted, the .9999 ("four nines the ad says") of Pure 24K Gold $50 Gold Buffalo Coin. The ad then goes on to suggest that the US Mint had to stop production because they ran out of gold blanks to make any more coins out of. But, YOU can reserve your very own copy of the $50 Buffalo Tribute Gold Clad Tribute Proof in 31 mg of pure gold. How much gold is 31 mg of pure gold? Do you know? Does the average person know the value of 31 mg of pure gold? Read on to find out the actual value of 31 mg of pure gold.
The ad is misleading for several reasons. The first of which is, that the purpose of this particular advertising is to purposely mislead to you to make your own FALSE assumptions about what they are actually selling. They are telling you about the original $50 Gold Buffalo Coin, and how special it is because it is the purest gold coin ever minted by the US Mint, which it is, but that is NOT the coin this advertisement is selling! Secondly, they want you to assume that the US Mint ran out of gold blanks to make more coins out of. Since when does the US Government run out of gold? Fort knox is full of gold. This ad makes you assume that these coins are scarce.
The advertisement goes on to state that this $50 Buffalo Tribute Coin they are selling is a special release issue minted of 24K Pure Gold, a clad "masterpiece" that can be yours for just $19.95. The very next sentence mentions that this low price can only be guaranteed for a very limited time because gold is skyrocketing past $1000 per ounce. OH MY GOD you better get one right now before gold goes up or they run out of these coins!!!!!(please note sarcasm)
The entire advertisement is purposely misleading. The fact that the ad makes suggestions of scarcity, how pure the gold is in the original coin, and that these 31 mg 24K pure gold clad Tribute "materpieces" may not be available for long because gold is skyrocketing past $1000 per ounce. And you can only order a maximum of 5 of them.
There are plenty of folks out there that will fall for this type of advertising. If they are buying these tribute coins because they just want a "replica" of a coin they could not afford, ok, I have no problem with that. But...
What I understand is, that a majority of buyers are under-informed folks who fall for advertising like this because they "think" they are getting a good deal. The advertising leads them to make false assumptions about what they are actually buying. The ad makes the average person believe they are getting a scarce issue coin made of 24K gold, and it may only be available for a limited time because gold prices keep going up, and they better ACT NOW.
Here is the lesson to learn:
#1 31 mg of PURE GOLD is valued at 1.2 cents at today's gold bullion price of $1131 per ounce. This Tribute coin has less than .001 ounces of gold content. That's correct, less than a thousandth of an ounce!! Worthless.
Yup, that's corrrect, this advertisement for this Tribute coin contains less than 1.5 cents worth of gold. So why did it mention that these coins may not be around for long because gold is skyrocketing past $1000 per ounce???
#2 Advertisements with official sounding names, mentioning all kinds of facts about a coin they are NOT selling, should be a RED FLAG for anyone interested in buying coins or bullion.
#3 The National Collectors Mint is trying to sell you 1.2 cents worth of gold for $20 bucks. Is that a good deal?
One of the toughest jobs I have as a dealer is explaining to the good folks who are trying to sell me their collections is, why I am only offering them so little for some of their items, like these "replicas or copies". When they explain to me that they paid $20 or $30 dollars for these when they bought them, and they are only being offered .50 or $1 for them, they realize at that point that they had been "taken" by the slick advertising of some of these unscrupulous sellers.
Being an INFORMED buyer is crucial to being a successful collector and investor.
Wednesday, March 3, 2010
Throughout these blog posts you will learn the ins and outs of the hobby, from the perspective of a long time collector turned family operated business. You will learn how I started collecting wheat pennies as a young boy, and turned those very coins into my own business. You will also learn things like:
- How to get started in coin collecting.
- What should you buy and where should you buy it.
- Who can you trust?
- How to buy and sell on E-Bay.
- Learn the Art of Coin Grading.
- What determines a coin's value.
- How to determine if a coin has been cleaned, polished, or altered.
- How to start your own coin business.
And much much more. Stay tuned and please sign up to my blog for our most recent posts and information!
If you have any questions or comments please feel free to post them, or for any inquiries please feel to give us a call at 508.335.6788 or visit our website at: www.charltoncoins.com .
Find out how a one gallon plastic milk jug and the generosity of one individual changed my life when I was about 7 years old...