Pricing Controversy with New 5 oz. “America the Beautiful” Bullion Coins

By CoinLink on Friday, December 10, 2010
Filed Under: Dealer News, Gold & Silver Bullion, Items of Interest, Modern US Coins, US Mint

The U.S. Mint’s Dec. 1 announcement that the new 2010 America the Beautiful 5-ounce .999 fine silver bullion quarter dollars were to go on sale December 6th was canceled earlier this week over Mint concerns and complaints that the much anticipated coins were being overpriced.

The US mint does not distribute its bullion products directly to the public, but rather uses a network of 11 “Primary Distributors” who purchase the coins from the US Mint at $9.75 over the spot price of silver, and then in turn mostly wholesale these out to retail dealers. Few of these Primary Distributors have retail facilities.

Here is a list of the Primary Distributors:

A-Mark Precious Metals
Coins ‘N Things Inc.
MTB
Scotia Mocatta
Dillon Gage of Dallas
Prudential Securities Inc.
The Gold Center
American Precious Metals Exchange, Inc. (APMEX)
Commerzbank International (Luxembourg)
Deutsche Bank A.G. (Germany)
Tanaka Kikinzoku Kogyo K.K. (Japan)

As part of the December 1st announcement, the Mint surprisingly drastically reduced the mintage’s for the much anticipated 5 oz America the Beautiful Bullion coins from an anticipated 100,000 coin (for each of the 5 designs this year), to a mere 33,000.

After the announcement, APMEX decided to offer the 2010 5 coin set to customers and allow them to pre-order the coins from their website. Apmex is one of the few Primary Distributors that maintains a retail presence through their website (which is excellent by the way). The 5 coin set was being offered at $1,395.

Obviously with such limited supplies, the large (3 inches in diameter) bullion coins were expected to be in hot demand .

However within hours of this pre-launch offering, complaints started to be registered with the US Mint because Apmex, responding to the anticipated demand and low mintages, had placed a $130.00 premium per coin on the set.

Apmex customers didn’t seem to mind the hefty premiums too much because within 19 hours after the posted pre-launch offer, they had sold 1000 sets. But the US Mint did mind. In fact they halted the release of the new 5 oz coins to review the situation.

In a statement released by the US Mint, and posted on CoinUpdate the Mint made the following statements:

The United States Mint is aware of reports of concern by many consumers about the high prices and premiums being charged in the market for the newly released America the Beautiful Silver Bullion Coins. We are evaluating these reports and collecting information in order to assess the appropriate course of action to make certain that our customers are best served in the distribution of the coins, and to ensure the widest possible availability, accessibility and affordability of these coins.

The same day, the US Mint sent the following memo to primary distributors:

The United States Mint issued a press release on December 1, 2010, announcing the December 6, 2010, availability of the 2010 America the Beautiful Ounce Silver Bullion Coins through the established network of Authorized Purchasers who, in turn, would make them available on the secondary market. Due to the limited availability of the 2010 America the Beautiful Silver Bullion Coin coins, public anticipation has been extremely strong. Since the press release was issued, the United States Mint has received numerous calls and inquiries from the public regarding premiums being charged for these coins. As a result, we are delaying the launch of this program. No America the Beautiful Ounce Silver Bullion Coins orders will be confirmed today.

New Terms and Conditions for Primary Distributors

1. Authorized Purchasers shall make available for sale to the public all 2010 America the Beautiful Silver Bullion Coins that they acquire. The intention of this condition is to ensure that all 2010 America the Beautiful Silver Bullion Coins minted and issued by the United States Mint are sold to the public.

2. Authorized Purchasers may charge to their customers a price no higher than ten percent above the price at which the Authorized Purchasers acquire 2010 America the Beautiful Silver Bullion Coins from the United States Mint. Authorized Purchasers may charge their customers a reasonable shipping and handling fee; however, Authorized Purchasers may not charge any other fee, premium, or other expense to their customers to circumvent this ten-percent markup limitation. The intention of this condition is to ensure that members of the public can obtain these coins at a reasonable and affordable purchase price.

3. Authorized Purchasers must establish and enforce an order limit of one coin of each design for each household. A household is defined as all persons of a family, or living as a family, at a single mailing address. The intention of this condition is to ensure the broadest and fairest public accessibility to 2010 America the Beautiful Silver Bullion Coins, which are limited-mintage United States Mint products.

4. Authorized Purchasers may not sell, either directly or indirectly, 2010 America the Beautiful Silver Bullion Coins to their officers or employees. The intention of this condition is to ensure that 2010 America the Beautiful Silver Bullion Coins are available to the public and that Authorized Purchaser officers and employees do not have an unfair advantage over members of the public.

Bottom Line: The New America the Beautiful 5 oz Bullion coins are supposed to be released today, December 10th. The Primary Distributors have been restricted to charge no more than a 10% premium for the coins. Those Primary Distributors who do not agree with the New Terms and Conditions issued by the US Mint and/or do not purchase their allocation, with have the coins allocated to them re-distributed to other Primary Distributor no latter than December 20th.

All in all an interesting situation, and one that raises many questions that I am sure will be discussed for months to come. We will be doing a follow-up article on this in the near future.

Tags: America the Beautiful Bullion, bullion coins, Bullion Dealers, coin collecting, coin prices, Silver Bullion Coins, US Mint

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23 Comment(s)

Michael Davis | Dec 10, 2010 | Reply

Is there a rough estimate of what the price that the Mint will be selling the at?
Dee Trip | Dec 23, 2010 | Reply

How is the Shopping Channel on Dish able to offer these coins? I though that they were suppose to be offered to the general public and one per household. The mint needs to ask the dealers for a list of all the people they sold them to. I don’t even find anywhere to place an order. I am going to call all of them tomorrow to see when they will offer them. I just don’t see how the Shopping Channel can offer them for 3500 and this was suppose to be one per household. Damn
Michael | Jan 4, 2011 | Reply

Write/call/email your U.S. congressman and senators about how poorly the U.S. Mint has managed the America the Beautiful coins.
michael shaffer | Jan 5, 2011 | Reply

the coin vault on channel 227 on direct tv are selling the america the beautiful coin set graded ngc ms69er for 3999.00 plus s&h i wanted a set of these but d thousand dollars i feel like im being not just ripped off but i feel like we the citizens will lose out….
David | Jan 5, 2011 | Reply

EXACTLY — last night (1/4/11)the Home Shopping Networtk (HSN) was selling 210 sets of the 5 oz America the Beautiful coins for $5,0000 a set. The United States Government has compleletly screwed this up (just like it has border security, centers for Medicare & Medicaid, etc, etc.). Every authorized purchaser I have contacted states they are not yet selling to the lowly individual United States citizen.
David | Jan 5, 2011 | Reply

I meant $5,000 in my prior posting. Sorry.
Michael | Jan 6, 2011 | Reply

From what I have seen, the authorized distributors are holding onto the coins and not responding to inquiries — waiting on prices to rise or figuring out how to charge the highest price while still remaining in compliance with the new guidelines? I thought distributors were supposed to distribute. As usual with anything related to the Mint, it is the citizens that pay through the nose.

I saw the Home Shopping Network offering them for $5,000 a set yesterday evening (January 5th). They said they had 210 sets. This system is working out great for the middle men.

I called the Mint and was told to call (202) 354-7500 if I had a complaint. I was told this was the office in charge of bullion coins. There was a recording, but you can leave a message.
Dee Trip | Jan 12, 2011 | Reply

Well I did call them and got the recorder. But did complain. APMEX has had the coins since 12/10/2010. The Mint should take all 10 dealers that are hording them for HUGE profits off their list and find 10 coin dealers that do what they are suppose to do. Make all of these dealers account for each set and return them back and put them up for sale on the website. That is how it should of been to begin with. I do hope the mint takes some sort of action against these dealers.
Tim | Jan 17, 2011 | Reply

Coin Dealers are like Used Car Salesmen!!! Profiteers!!! Rip off Artists!!!

The 2 best solutions to make this fair for the public are found below!!!

Soultion #1:
The US Mint should make them available on their own website for the 10% markup plus reasonable shipping/handeling.

OR

The US mint should go through the thousands of FDIC Insured Banking Institutions all over the US to let them make them available for the 10% markup. The banking institutions would be very willing to invest for a guaranteed 10% one day return on investment(ROI.)
Timothy | Jan 17, 2011 | Reply

Absolutely. The FDIC Banking system is regulated in such a way that the Federal Government could very well monitor the books and if need be.

As long as the US Mint had a legal and binding agreement with the Publically Traded Banks, the bank Executives would be risking lawsuit and dismissal if they attempted to profit more than the agreed 10%. Lawsuit from shareholders for placing the bank in jeopardy and lawsuit from buyers who would have paid too much.

OR

Sure, there is no reason for the US Mint to have a go-between when everyone can go to the local library to access the Internet and order straight from the US Mint.
Robert Kane | Jan 18, 2011 | Reply

Just bought mine for $875.33 for the set from A-Mark Direct. They did charge an outrageous $99 shipping fee, but it is still far less then these other theives are asking.
Dee Trip | Jan 18, 2011 | Reply

Great…. I put my name on the list. Hopefully I will be able to get them. Thanks
Jerry Cyr | Jan 22, 2011 | Reply

Could someone please let me know where to find a list to enter my name to purchase a ATB set! Thanx!
PAUL | Jan 27, 2011 | Reply

I attempted to obtain these coins well in advance and was told they would only be sold to the mint dealers – and they could only make a small profit. So it appears the dealers who received these coins sold them to friends, who in turn sold them for high mark ups and then gave kick backs to the dealers– one person on ebay told me he had gotten the coins “DIRECTLY FROM THE US MINT”. This happened before and the Mint did nothing about it – except make plans for the next time to screw the “true collectors”…These coins are by definition, collector coins – but the US Mint has made them an easy way for coin dealers and profiteers to screw the very people these coins were made for. US Mint – go to hell
George | Jan 29, 2011 | Reply

I should think there would be an FBI investigaion into how Home Shopping got quantities of these to offer. Sounds like a racketeering issue or some corrupt folks at the mint?
Dee Trip | Feb 3, 2011 | Reply

Was able to place my order for them from Amark. 875 plus 99 shipping. Next week they will sell more.
anysnail | Feb 13, 2011 | Reply

i am just now getting into coin collecting. is all this something i may as well get used to? if it is i’ll leave it all be and let the collecting be for you pros. it’s a shame too, i really like yellowstone park.
BullionBuyer | Feb 14, 2011 | Reply

anysnail:

If you are interested in buying rare numismatic coins as a collector, then I would urge you not to touch the America the Beautiful Series. With a minting of 300K coins, these are not even nearly “rare” coins.

Let’s use Dee Trip’s example above. Dee paid $875 for five 5 ounce silver coins (or 25 T.oz). He also paid $99 for shipping for a total of $974. If Dee bought the coins on February 3, as indicated by his post, the spot price of 1 ounce of pure silver was $28.30, or $707.50 for 25 Troy ounces. So, Dee paid a total premium of $266.5 ($10.66/Toz) over the spot value of his 25 ounces of silver as of February 3, 2011. Another way to say it is that Dee paid a total commission of 37% of the total value of his purchase on February 3rd. That’s very high for a mere bullion grade coin.
BullionBuyer | Feb 14, 2011 | Reply

Sorry, that was 165K total coins minted (33K per design). A little over half of what I said above, but in my view, still not a true numismatic collector’s coin.
Dee Trip | Feb 22, 2011 | Reply

Got my coins. SO excited………
Memf2dafizzo | Feb 27, 2011 | Reply

Very poor analogy BullionBuyer. You’re only basing the value of the coins on the cost of silver and not the collectible value of the coin type. Not to get into a long drawn out discussion, this will prove how wrong you are about the coin’s worth. PCGS already has a price guide value for these coins. Standard MS grades of 63 are valued at $350 “EACH”. First strike in that same grade is $365. So they’re already going to fetch between $1750 and $1825 a set if someone decides to get them graded and place them up for sell. PCGS doesn’t have a price for MS69 or MS70 grades yet so there’s no telling how much they will be worth. Trust me… these coins are great collectibles and it will show within the next year or two. Just remember that I told you so.
Memf2dafizzo | Mar 15, 2011 | Reply

In regards to my above message, I was just given a link to eBay througha PCGS email newsletter and a America the Beautiful 5 oz. set was graded PCGSMS69DMPL. The set sold for $10,000. How’s that for value and profit. BullionBuyer, I hate to say I told you so but guess what… I told you so. Now… do you still feel the same way about these coins?
eagle1 | May 17, 2011 | Reply

I found the Hot Springs 5 oz at our local coin store. Selling for 652 bucks. So much for the ten percent mark up. This same store buys your coins (silver) at 30% below market value and sells it for $7.50 above spot. I don’t shop there anymore