Mr. Rawles,
Gil G. had some very informative information and almost all of his instructions can be transferred to purchasing silver in a local coin shop.
I have had nothing but a positive experience with buying “junk” silver on eBay.
On two separate occasions, my order was missing some required coins. I had purchased $5 face value (FV) in dimes. In one order, I had only received 49 dimes. I sent an email to the seller and they promptly (within hours) refunded my account with the price of the dime. In another order, one of the 50 dimes was a coin from 1968. Again, I quickly email to the seller and they mailed me a pre-1965 dime and $2 (I guess for my troubles). Because they sellers corrected the situation very quickly, I was able to leave a positive feedback that will help out other buyers. Make sure you check the sellers ratings and the comments. Before you purchase silver online, you need to be searching for an honest seller. After the silver purchase, make sure you have verified your purchase. Don’t just assume that you have received what you paid for. In the case where the seller sent me a 1968 dime, they had bought a roll of dimes a couple of years earlier and just put it on the shelf without fully checking the roll. They then sold it to me without checking it again. Accidents happen. Don’t automatically leave a negative rating. Most sellers are honest and want you to be satisfied with the deal. And they want their rating to be as high as possible.
Even though I have had a very positive experience, I stopped purchasing silver on eBay a little over a year ago. The main reason is because of the electronic “paper trail”. Ebay, PayPal, and my bank know exactly how much silver I have purchased online. I would hate to have this information handed over to some government official if/when it is decided to start confiscating precious metals. Yes, I know that silver hasn’t been confiscated in the past, but with recent laws/Executive Orders (NDAA, CISPA, National Defense Resources Preparedness Executive Order, HR 347), Washington DC wouldn’t surprise me if owning precious metals became outlawed.
I still purchase silver, however, I do so at a local coin shop. And I only purchase with cash. Also, the owner doesn’t have records with my name, so I don’t have to worry about him spilling who has purchased gold and silver from him.
Here is how I found this coin dealer. I went in pretending I knew nothing about silver and asked him some basic questions (make sure you understand the concepts presented in Gil G’s letter. You can also go to coinflation.com for current spot prices for US coins). I think my first question was “I heard somebody talking about ‘junk’ silver. What is that?” He responded with, “don’t ever call silver ‘junk'”. (Right away I knew that I was going to like him). He explained some basics, like purchasing non-numismatic coins, looking for pre-1965 US coins (for 90% silver) and 1965-1970 1/2 dollars (for 40% silver). After he successfully explained basic silver knowledge to me, I negotiated to pay spot price for the silver however, a small % over spot would have been acceptable. He pulled out his scale and we did business in cash.
One time, the owner accidentally sold me a Seated Liberty dime. This has some numismatic value. When I got home and went through the dimes (again, check your purchases since accidents can be made), I found the dime. The next time I went into purchase silver, I brought in the dime to trade back. He was impressed with my honesty and gave me a silver quarter for the dime even though I was only asking to trade for another dime. Lesson of the story, make friends with the owner. You are purchasing products from them. You want them to succeed so that you can continue to make your purchases. If you screw the owner, they will go out of business, and then you have no place to purchase.
I have also sent friends/co-workers his way. Almost every paycheck, I stop by and purchase some more silver. He has always given me a fair price (even when purchasing gold, he has also given me spot price) and has never asked for my last name. I just give him a call and the coins are ready for when I get to his shop.
If you have the opportunity to purchase anonymously, do it.
God bless, – Matthew G.
JWR
This was an excellent article, thank you for printing it. Gil is very knowledgeable and was pretty thorough. I work for a precious metals company and I am in charge of the eBay listings for our store. While we mainly deal in the collector’s slabbed coins, in our physical storefront we also have junk silver so I am familiar with it. Something I would like to mention for the newbies out there is to be aware of who you are dealing with on eBay, especially what country they are in. There have been a lot of problems and complaints lately about counterfeit silver that is coming from China and some other foreign nations. Some new folks might see the low prices and think they have themselves a deal when they really don’t. Also, make sure you read the entire listing and don’t be afraid to ask the seller questions. A reputable seller will always answer you and usually within 24 hours.
Another thing to remember for those that choose to buy locally, at least in Texas there is no sales tax on any purchases of precious metals totaling $1,000 or more and junk silver is not tracked by the government like bullion is, no paperwork to fill out.
You can also find the information on the composition of foreign/non US coins on the Internet but you may have to dig a little. For example, one site that lists the metals content of many foreign coins is Global Coins. [JWR Adds: The “by country” listing in the right hand bar is a quick way to navigate to find information on a particular coin.]
Thanks for your great blog great site, I learn something new every day! – A.M.M.
Mr. Rawles,
I found “A Beginner’s Guide to Buying Silver on eBay”, by Gil G. helpful and I acknowledge that he specifically wrote about eBay.
However, there may be a better way to buy silver; visiting a local coin dealer, and developing a relationship with them.
I recently began purchasing some silver on eBay buying us minted coins and found that this was an easy place to buy small amounts of silver
including silver dollars. What I did determine is that my local coin dealer would sell me the same coins as eBay typically for a lot less.
On my first visit to the coin shop in town I decided to purchase a silver dollar for my father’s birthday, a 1928 Peace dollar – minted on his birth year. I paid $30 for the coin and after viewing comparable sales on eBay I found that I did far better by visiting my local store.
My coin shop has been in business for over thirty years, in the same location, it is close to my work and the people understand customer service and they take the time to answer my questions.
So, my advice is, if there is a coin shop nearby give them an opportunity to earn your business.
Sincerely, – Greg in Tennessee