EBay sellers—One More Scam To Watch Out For

By Patrick A. Heller
Commentary on Precious Metals Prepared for CoinWeek.com …..

The advancements in digital photography and the ease of ability to post price lists and auctions on the internet have proved to be a real boon for coin sellers.  However, with the rise of legitimate online transactions comes new ways of trying to separate people from their hard-earned money.  My own company has just finished avoiding a scam that we have never before experienced.

Let me preface this story by admitting that everyone, no matter how diligent about details they might be, is perfect.  When you are shipping thousands of packages a year, the risk exists that a package may contain the incorrect contents or be shipped to the wrong person or address.  It can also happen that you may accidentally ship too many or too few of the item meant to go in the package.  Would you automatically believe a buyer who claimed the package they received was short by a one-ounce gold coin, especially considering the profit margin involved?

shipping_coinsFor a business such as the one I own, advancing technology offers partial protection against shipping mistakes.  Not only does my shipping room have a security camera covering the room, it also has a close-up camera of the shipping counter where packages are wrapped.

Here’s how you can use such a camera and an accurate scale to protect yourself from some scams.  Wrap the package in view of the close-up camera.  Make sure to display the product and count out the quantity of items so that anyone viewing the film would know what went into the package.  Make sure to also film the label attached to the package to show the address to which it was sent.  When finished wrapping the package, make sure to note the weight of the package in pounds and ounces on your own records.  We put this information in our registered mailing book for packages sent by this method and also on our copy of the transaction.

If your buyer claims to be short a one-ounce coin, it should be possible to recreate the package to see if the weight confirms it.  It should also be possible to sometimes backtrack from the fee charged by the post office to calculate the weight.  Finally, you can check the film to see how many pieces were packed.  My company has been pretty much done these steps for a few years.

The new scam we encountered was in our eBay sale a couple weeks ago of an early China 1 Oz Gold Panda in original plastic, but suffering from distinctive brown spots.  In order to sell it, we posted detailed photographs of the coin in the auction description.  The buyer who paid for it claimed that the piece he received was not the piece in the photos, so he wanted a refund.  As is our policy, the customer is entitled to return the item within 15 days of receipt for a full refund.  The customer sought reimbursement of the return postage costs on the grounds the piece was not the item pictured in the sale.

Earlier this week, we received the return package from the customer—sent first class mail with no insurance.  It definitely is not the same piece we offered for sale and shipped to this buyer.  The piece we sold had a satin finish while the returned item has a proof mirror finish.  There were several prominent spots on the returned piece, but all in different places than those on the coin we shipped.  The coin was also rotated about 60 degrees in the plastic, yet there were no marks on the inside of the plastic to indicate that the coin had shifted in the holder.

The clincher was that the piece returned weighed 0.9 grams heavier than the piece we shipped that weighed correctly.  In other words, the returned piece was a counterfeit.  We used our x-ray spectrometer to check metal content and found that the piece was only about 92% gold.

The buyer had already filed a complaint with eBay about us shipping the wrong item.  When we contacted eBay, they instructed us to file a police report on what happened, which we did.  After submitting all this information to eBay, their instructions were to reship the returned piece we received, and eBay would close the matter as far as our company was concerned.  Presumably, eBay will be dealing with this buyer directly.

While checking out this buyer on eBay, we discovered that this party was a seller of a variety of pre-1934 US Gold coins.  I wonder how many of his buyers might have also received a counterfeit gold piece that was short about $100 worth of gold.  At a company such as mine, counterfeits are much easier to detect (when two of the staff here each took the American Numismatic Association course on Advanced Detection of Counterfeit and Altered Coins, they both caught errors in the course’s teaching materials) than could be done by the novice or intermediate collector.

So, what are collectors to do to protect themselves against such scams? The first things I recommend are acquiring a good reference book containing diameters and weights of the coins you collect.  Second, get a good gram scale.  My own company uses and sells pocket scales for $19.95 that weigh up to 1,000 grams with an accuracy of 0.1 gram.  If you don’t want to splurge for calipers, try to find an accurate metric ruler.  If you are purchasing a certified coin, it might be possible to go online and verify that the certificate number matches the piece you have and that the photograph, if available, matches.

If the piece passes all of these tests, you can then seek an experienced collector or dealer to ask their opinion as to the authenticity and quality of the coin.  In my experience, good coin dealers are willing to share their expertise at no charge, though there are a few in the industry who automatically respond that coins bought elsewhere cannot be as nice as the ones that they are trying to sell.  When you go to coin shows, make sure you examine lots of pieces of the kind you collect to get an idea of the look that genuine pieces have.

Every dealer, much less learning collectors, has the experience of being fooled by altered and counterfeit coins.  By taking the precautions outlined above, especially if purchasing online from a seller you do not know, you are much more likely to avoid scams such as the one we just endured.


Patrick A. Heller was honored with the American Numismatic Association 2012 Harry J. Forman Numismatic Dealer of the Year Award.  He owns Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects.  Past newsletter issues can be viewed at http://www.libertycoinservice.com.  Other commentaries are available at Numismaster (under “News & Articles) .  His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com

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