My Thoughts On The Aftermath Of The U.S. Mint Coin Deal

Update: I’ve decided to close the comments, I think at this stage people are just talking in circles and nothing new is really being said. In addition it looks like a few dedicated trolls are creating comments with different names to try and make it seem like a lot of people agree with their point of the view.

Last week we posted a deal where readers could purchase an American Eagle 2019 One Ounce Silver Enhanced Reverse Proof coin for $86.9 (including shipping) and lock in $113.10 profit by committing to sell it to PFS Coins if they were lucky enough to be able to purchase the coin. In that post we made it clear that readers should only opt into this deal if they were 100% committed to selling the coin to PFS if they were successful.

I normally don’t post coin deals as the vast majority of them are not money makers and I don’t want readers to lose money. In this case PFS was offering a guaranteed profit so agreed to post after checking with  with other coin purchasers to see if they would offer a better rate (none would at the time of posting). The coin itself sold out extremely quickly and prices quickly soared to $500+ on eBay, despite the fact that readers had committed to selling to PFS I saw a lot of comments from readers saying that they were no longer going to stick to this commitment due to the higher prices. A lot of readers were saying that PFS were being greedy by not increasing their offer after the fact.

I don’t think it’s fair to protect yourself from any downside by opting into the PFS deal and then selling to other sellers if the value increases. I think there is also a lot of misunderstanding about how PFS actually does business. This comment from Aron provides some insight:

Our business model follow this typical path – We pre-sell our EXPECTED orders to a dealer or two – we made great connections (over 13 years doing this, and work with the largest in the business – names that were mentioned in this thread, name you all know).
we do this for EVERY DEAL WE RUN. the last time PFS didn’t pre-sell our expected orders was in October of 2015 (JFK C&C sets). We have done >20 deals since. This is a fact.

Now, typically we give ~60% of the premium the we receive (over mint cost) to our members, we have about 20% of opex, and are lucky/extremely happy if we net 20% of what the total premium is.

The price and premium we get ALWAYS has to do with the pre-sale “value” of the item.

CASE IN POINT – this is our 4th deal we ran this year. We did the Apollo coins at the start of the year, The Pride Sets in July, and we just did the Palladium coin a bit ago. ALL THREE OF THOSE DEALS we received a premium, shared it liberally with our members, and they ALL – each one of the three – declined in value RIGHT AWAY – neither sold out at the Mint, and buyers (including ourselves and our dealers) were able to buy as many as they wanted 24 hours later directly from the mint.

We came through – to every buyer – there were between $700 and $1987 in spend (depending on which deal) there were commissions paid out, FedEx labels sent, emails answered, boxes packed etc.

PFS NEVER went and negotiated with our members, hey, cancel your order, or let me pay you less since they’re worth less, or let me buy the coins ourselves so we can get our own credit card points. never.

ALL OF A SUDDEN there’s a deal the works in the favor our OUR DEALERS – (for us – and our members – this was a guaranteed deal and this should be like each and every other deal – where we had the guarantee and we had the risless profit…) but no, now PFS is the villain!! PFS is preying on people that had no clue while they knew this was going to explode!

FACT: PFS sold our entire quantity – even more than we’ll likely end up getting – PRIOR to the “value” increasing.

Realistically, there are two items here, there’s the silver eagle on Wednesday the 13th – that we all had a price and a fair value for, and we were all were SO EXCITED about getting paid $100 for spending 20 minutes at lunch break the next day.

And now the item dwarfed into something so much bigger, everyone wants in on the upside! I don’t get it, I really don’t. You can’t invest in a guaranteed Bank CD at 2% interest and then call the Banker and ask for the 20% that the S&P 500 returned!!! This is precisely what’s going on.

We clearly warned about it to…
“*There are 30,000 of these coins being minted, and we do not want to hold any extra inventory for ourselves. It truly is impossible to know if they’ll be a good investment / speculation and if they don’t sell out, the Mint will likely lift the household limits 24 hours after they go on sale.
*You must be approved before making the purchase. If you do not receive a confirmation email to purchase you will not be reimbursed.
*On the same note, since we want to fill our entire purchase order and are not accepting extra opt-ins, if you do want to partake in this deal, please make sure that you will be available to make the purchase at exactly 12PM ET.
*We cannot afford to be a backstop for people wanting to speculate afterward. Any unfilled quantity we have, could have went to someone else that may not have been approved for the offer because of your spot. If you opt in – you must be fully committed to fulfill the deal.”

If the opposite happened and coin prices had dropped, I have no doubt PFS would have kept their end of the bargain (as they have in the past). I think it’s disappointing that some readers decided not to honor their side of the deal after the fact. In the future I don’t think we will post these coin deals, I don’t feel comfortable knowing that readers will renege on their side of the deal (and let’s be honest what coin purchase would want to offer a guaranteed deal to our readership again) if it becomes more profitable to do so.