Buying rare coins can be a fun, exciting, and interesting way to learn about history while simultaneously investing in a profitable and safe commodity.
But as with all investments, there is the risk of scams, and of having an unlucky encounter with someone who has abandoned morality and honesty in exchange for money.
When you hear rare coins scams, the first think that probably comes to mind is forgeries and counterfeits—coins that appear to be real and historic, but aren’t actually what they say they are.
While this is certainly the most common form in which scam artists make off with victims’ money there is a new scam that is pervading the country, and is all too successful. This scam consists of the selling of rare coin secrets, most commonly the “free silver story.”
Many new collectors have been victimized and have paid $20, $50, or even upwards of $100 for the secret to supposedly getting free silver at your local bank. Scammers begin by luring in the inexperienced investor, claiming to have a secret mantra that will cause bank tellers to give you free silver.
In reality, this secret isn’t really all that secretive, and consists of simply asking your bank teller for a roll of half-dollars. Ordinarily, half-dollars are worth 50 cents, however, in the years prior to 1971, the U.S. mint made half-dollars with an abnormally high concentration of silver.
If your lucky stars happen to be shining, you may find one of these coins in your roll of half-dollars, which you paid $10 for. Because of silver’s value, which hovers just over $20, you will make a marginal profit, and in effect be given a piece of silver which you did not directly pay for, hence the term “free silver.”
However, even this can be misleading, as the marginal profit is even less than you might imagine. To begin, your local bank may not even carry in stock half-dollars, so you may find yourself traveling down the road in order to find a bank that does in fact have them.
After this, you must spend the time sifting through rolls of half-dollars; time which you could have used more constructively to work making as much or more on a minimum wage job. Once you have sat and collected a few silver coins, you will have to sell them in order for them to be worth more than the legal tender 50 cents they were minted for. This may impose another cost, and will certainly take more time but of your schedule to do.
If you get this far, don’t think that you’ve made out with the free silver just yet, because now you have a pile of half-dollars that are only worth the usual 50 cents, and you probably want that changed back into paper money. Banks don’t like loose change, and if you want to exchange these coins for paper money, you will have to do one of two things—roll the coins back in the paper yourself, or pay a fee to use a coin counter and save yourself the time, but lose a few cents to every dollar.
If you are truly persistent and have made it through this exhaustive process, you are probably feeling pretty good about yourself. After all that work, you really did get some free silver, and you sold it off for a profit without having to do any rigorous work. Now think back to the beginning, and to how much you paid the “secret seller” for this covert information. Even if you managed to make $50, you probably paid that much to the scammer, who made it in a split-second, giving you information you could find online in an instant. When it comes to rare coin investing, there are no secrets or freebies, so just stick to reliable, traditional research, and enjoy the benefits of this great market as is.