By Louis Golino for CoinWeek …..
The widely and eagerly-anticipated 25th Anniversary American Silver Eagle sets sold out on October 27 in 4 ½ hours, but large numbers of collectors were unable to place orders because of problems with the United States Mint’s web site and telephone order options.
The sets are limited to 100,000 units and each household could order up to five sets. Each set has five different 2011-dated silver eagles.
Two coins are unique to the set, the reverse proof coin and the “S” Mint burnished version from the San Francisco Mint. It also includes a proof coin from the Philadelphia Mint, a burnished coin from West Point, and a bullion coin from the Denver Mint (but with no mint mark).
eBay prices already average close to twice the Mint’s $300 price, and one major dealer, APMEX, is offering to pay $425 per set.
Legions of frustrated collectors spent the entire day working the phones and computers, taking time off work if they could, and many were not able to order even one set to keep their collections updated despite spending the entire day trying to place an order.
There were two main problems. First, the five per household limit was too high and enabled dealers and others looking to make a profit to scoop up the majority of the sets without giving a chance to the average collector.
This contradicts the U.S. Mint’s stated policy of seeking to distribute its coins to a wide audience in as fair a manner as possible. I would be surprised if the Mint does not receive numerous complaints on this matter.
Second, despite repeated episodes like this in recent years, the Mint has refused to invest the money it takes to upgrade its ordering system so that it can handle high volume coin releases.
Some people argue that because most days the Mint does less volume, it would not be worth the expense. But that does not strike me as the right way to look at this.
The Mint knew there would be extremely high demand for this set because the American silver eagle is the most widely collected modern U.S. coin and the most widely traded silver bullion coin in the world. It is the 21st-century equivalent of the Morgan silver dollar.
The Mint made a decision to delay upgrading its ordering system until next year.
During the agonizing afternoon of October 27, the Mint posted the following message on its Facebook page:
We apologize to those of you having difficulty getting through to place orders for the 2011 American Eagle 25th Anniversary Silver Coin Set. Our ordering system has been running at capacity – in fact, orders were placed for approximately 25,000 sets during the first hour of sales.
We are committed to improving your online ordering experience and have recently awarded a contract that will result in a new, state of art order management system. We appreciate your continued patience and understanding as we work toward implementing this new system in 2012.
It is really hard to understand why the world’s largest coin dealer has yet to implement a 21st-century ordering system. Surely, it does not take that long to find a competent vendor.
The Mint sells tens of millions of American silver eagles and millions of other gold and platinum bullion coins every year. Any well-run business would use some of those profits to develop a system that can handle high-volume coin releases.
If nothing else, such a system would have a hugely positive effect on the way collectors view the Mint. The Mint has already lost a quarter of its customer base compared to last year. The fiasco with the release of the 25th-anniversary set is not going to help its already troubled reputation.
It does have a monopoly on these products, but if it keeps pushing its luck, it will continue losing customers and angering others.
Given all this, it is especially hard to understand why the Mint decided to compound the problem by having a five-per-household limit, which in any event was easily circumvented by dealers and e-Bay flippers, who simply had their friends and family each order five sets, borrowed their credit cards, asked employees to spend their time putting orders in, etc.
This is hardly the first time this has happened.
In 2007 when the two first gold First Spouse coins were released, the Mint’s ordering system was strained to capacity, and coins sold out in about the same amount of time as the 25th-anniversary sets.
In 2009, the Lincoln Coin and Chronicles set was another ordering fiasco, and earlier that year the first buyers of the Ultra High Relief Double Eagles also had to spend the entire afternoon trying to order. And there are plenty of other examples.
Most people seem to agree that the Mint should have used a one- or two-per-household limit, at least for the first week of sales of the 25th-anniversary sets. That would have made it far easier to get through online or on the phone.
The limit could have then been adjusted after the first week if sets remained. And the average collector would have had a fighting chance to order a set.
Other have suggested that in this era of 9% unemployment the Mint could have hired additional temporary staff to work the phones taking orders. This would not have been a huge expense and would have helped alleviate some of the problems.
I have always tried to be fair in what I say publicly about the Mint and to be honest, I really think the Mint dropped the ball on this one.
At least by the time the 30th anniversary of the silver eagle program rolls by, the Mint should finally have a better system in place.
Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for Coin Week, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and websites.