Saturday, January 24, 2009

Presidential Dollar Rolls: Collection or Investment?

"We are opening the vault for a limited time only. Don't miss this golden opportunity."

These were the words that greeted me when I opened the flyer that came in the mail today. The flyer was from a well known marketer of collectibles and billed itself as “The smart way to collect Presidential Dollars.”

The offer was for rolls of 12 Presidential dollars for "Only $34.95" plus $4.95 for shipping and service. That is more than a 200% premium over face value for coins that are currently in circulation.

Not a great investment

The offer asks you to consider “a similar series of U.S. President stamps . . . [that] sell today for 12 times or more than their original face value.” It includes a chart showing what a great investment these Presidential stamps issued in 1938 turned out to be. The chart showed the stamps rising in value by 1,200%!

Ironically, their chart starts with the stamps at face value and doesn’t include a 200% premium paid upfront as you would pay with their Presidential coins offer. More importantly, what do these Presidential stamps have to do with the future value of Presidential dollars?

As far as I’m concerned, nothing justifies paying a 200% premium when I can get uncirculated coins for face value.

Collecting at face value

As a coin collector, I am a big fan of the new Presidential dollars. I like the series better than the state quarters. But when it comes to buying the new dollars, I like to get mine at face value. My Presidential dollars are part of a collection, not an investment. Although it would be nice to have them eventually go up in value, I collect them with the expectation that they will never be a great investment.

Where can you get rolls at face value?
My 10 year old niece collects rolls of Presidential dollars. But she pays only $25 for a roll of 25. Where does she get them? From her bank. Unfortunately, not every bank has the rolls. The two banks closest to my house both have Presidential dollars, but neither has the rolls. However, after a few minutes of calling on the phone, I located one that does.

Where else can you get them at face value?

The U.S. Mint has a direct shipment program where they will send you 10 rolls at face value plus free shipping. It's the same as getting them from the bank. The catch is that you have to order 10 rolls and you can't specify which mint. But it's not like you are stuck with the other $225 worth of coins. You can break open the rolls and spend them. After all, that's the whole point of the program! One major drawback of this program for collectors is that they have not included every presidential coin in the program. Until the huge mintages of the early issues have been dispersed, this is unlikely to change.

But the U.S. Mint says the rolls are "circulating $1 coin rolls" and not uncirculated

Let's be realistic. The coins from the direct shipment program are uncirculated with regards to grading. The whole point of the direct shipment program is to get the coins into circulation. The banks aren't doing it so the U.S. Mint is going straight to the consumer.
I recently gave the direct shipment program a try and ordered a box of dollars. I have opened some of the rolls and the coins are definitely brilliant uncirculated. In fact, the coins are nicer than the individual coins I’ve gotten from the bank.

At the bank, I’ve had to watch as the tellers put their fingers all over individual coins as they were counted and then clanged all the coins as they were handed over to me. I’ve watch the grade of the coins go from uncirculated to circulated during that transaction.

What about the mail offer I received?
Even if I don't consider the coins an investment, why not buy my Presidential dollars from the offer I got in the mail? They list some reasons that make the offer seem like a good deal. Here are some of those reasons.

"Each Presidential $1 coin is a limited edition!"

Wait, let me randomly pull a coin out of my pocket. . . . It's a 1973 Philadelphia quarter dollar. Hmm, is this also a limited edition? Better check my Redbook. . . . Yep, here it is. The mintage for 1973 is limited to only 347,924,000. Oh my gosh! According to the Redbook, all of the change I have in my pocket consists of limited edition coins. I have to stop spending my money!

"Coin collecting is a rapidly growing hobby in the United States"

I'll give them this one although I'm not sure how many new collectors it will take to justify their 200%+ premium. This argument was used with the state quarters. Did that pay off?

"You may not have even seen any of these unique $1 coins in circulation because they're being snatched up and hoarded away as fast as they come out."

This one makes me laugh the most. We don't see them in circulation because nobody wants them. Try spending a few. I've had a cashier tell me how much she hates the coins because the next customer will refuse the coin as change.

If they are being "hoarded away," how will this really reflect on their future value?

The Hoarding Effect

Let's look at an example of a coin hoarded in the past. The 1883 Liberty Head nickel without the word “CENTS" on the reverse had a mintage of around 5.4 million and is worth $14 in AU-50 (2007 Redbook prices). Yet, the 1883 with the word “CENTS" has a mintage of over 16 million and it is worth $100 in AU-50. You would think that the lower mintage coin would have the higher value today. But once people heard about the design change to add the word cents to the reverse, they assumed the original design would become scarce. So they hoarded them. The result is that more of them survived in relatively good condition.This hoarding phenomenon recently occurred with the state quarters. (Believe me! I've seen some of the hoarding. Right mom?) If this is happening with the Presidential dollars, then I think it's safe to say this will negatively impact their future value to collectors.

The smart way to collect
Simply put, the smart way to collect Presidential dollars is NOT to invest in Presidential dollars! Millions of Americans were introduced to coin collecting through the joy and fun of collecting state quarters. Let’s hope that the Presidential dollars have a similar affect on the hobby.


At 7:23 PM, Anonymous Anonymous said...

Well said on all counts.

At 8:22 AM, Anonymous Anonymous said...

Well I saw an infomercial this weekend that was for this same offer. They even had a display of the Presidential stamps that have risen in value by "1,200%!"

Again, they talked about the coins not circulating and being hoarded by collectors. Both statements contradicting the idea that these will greatly appreciate in value.

Then I was surprised when they had a coin expert, referred to as the "father of the state quarters program," come on and to support the deal.

The expert was none other than David L. Ganz, writer for the Numismatic News!

Of all people that I thought would be looking out for collectors' interest, David L. Ganz is one of the last ones I thought would be a sellout and help screw new collectors to the hobby.

I'm thinking I may cancel my subscription. It wouldn't be much of a loss since Ganz writes more about what he eats on vacation than about numismatics anyway.

At 5:06 PM, Blogger Stephen said...

Thanks! Your commentary has ended up saving me a lot of money. I was intrigued by the flyer I received today in the mail, but wisdom prevailed and I decided to check the Internet for what people were saying about the coins (and offer) before signing up. Now I can live happily knowing that this offer is an outright scam.

At 5:52 PM, Anonymous Anonymous said...

Well who wrote you could buy the presidential dollars at face value lied. The U.S. Mint said that you can't and that you must pay per roll $35.95 plus S&H $4.95 which comes out to be $40.90 per roll of $25.00 which is absolutely unbelievable. As most people can't afford that to collect the circulating dollars for their children which is what I was doing for my grandchild. Isn't it nice that the U.S. Mint had to stop making as many as before so that they could charge almost twice the amount they are worth (face value). Something should be done. Diana Nicolas

At 12:00 PM, Blogger A.C. Dwyer said...

Thanks for the comment Diana. I agree that $35.95 plus shipping is too much. But I'm confused by your comment "well who wrote you could buy the Presidential dollars at face value lied." I've got Presidential dollar rolls for each President that I paid face value for. Some I got directly from the U.S. Mint at face value (postage free) from their Direct Shipment program. Others that were not available through that program I found at banks. While not all banks carry them, a few phone calls always finds at least one or two that do. Although the rolls don't specify which mint the coins are from, I'm not collecting them by mint anyway. I just want one per President.

At 8:25 AM, Anonymous PNC said...

Hoarding has the same effect on every collectors item... Comics, stamps, Minton or Spode even Prints, books.

Pres Dollars is not a great idea other than a nice box!

At 8:27 AM, Anonymous TJ Silver said...

Just seen the Ad... Thanks for the info I will not be buying and non circulation coins.

And how can there be so many cancelled mint limited edition coins? LoL

At 5:25 AM, Anonymous Anonymous said...

Obviously what has happened this company has purchased all these coins in hopes of the value to increase, which has not happened. They now are trying to get rid of this massive stockpile of coins, by ripping you off! No Thanks!

At 2:35 AM, Anonymous Anonymous said...

One mans junk is someone's treasure.

"Obviously what has happened this company has purchased all these coins in hopes of the value to increase, which has not happened. They now are trying to get rid of this massive stockpile of coins, by ripping you off!"


At 11:51 AM, Anonymous Anonymous said...

What happened to the days of having one of each mint mark in decent condition? If you were a serious collector you had Mint state coins with the Proofs. Now you have Mint state in Business Strike and Satin Finish, edge lettering Position A&B of both Business and Satin Finish, Proofs, First Day Strikes, and Silver Proofs. This is crazy!!!! Anyone else think so???

At 9:36 AM, Anonymous Anonymous said...


At 3:54 PM, Anonymous DISTRUSTING said...


At 9:29 PM, Anonymous A.C. Dwyer said...

Hmm, I've been breaking open my rolls and spending them, but I never did count any of them to see if they were short. I may have to start counting the coins when I open the rolls.


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