Tuesday, June 01, 2010

Is the Bullion and Rare Coin Industry an Industry Full of "F"s?

According to Fox News's Glenn Beck, the coin industry is an industry full of F's when it comes to Better Business Bureau ratings

In many industries, you're best customers are also your best references to securing new customers. When I did some landscaping at my home a few years ago, the company supplied me with a list of addresses where they had done similar work. Another was provided when I had a new roof installed on my home.

At my job, software companies competing to sell my employer a million dollar enterprise software package not only provided lists of companies that had already purchased the software, but they also provided the names of individual employees at those companies that I could call and talk to.

But in the coin industry, privacy prevails. If you want to make a large purchase from a coin company for the first time, you can't count on a list of customers that you can talk to about their experiences. It is an industry where companies don't want to give out the names of their customers, and their customers don't want them to either. I like to refer to it as numismatic paranoia.

So before we make that first purchase, many of us go out to the Better Business Bureau (BBB) to at least check a company's ratings.

But how reliable are the BBB ratings?
Recently a controversy erupted between N.Y. Representative Anthony Weiner and Goldline International. While defending Goldline in an interview with Fox's Bill O'Reilly, Fox's Glenn Beck (also a Goldline spokesperson) made the following comment, "[Goldline has an] A+ credit rating from the Better Business Bureau. . . . They’ve retained their A+ rating in an industry that is full of F’s."

Another website CoinLink posted an article that showed that out of 20 companies they looked up at the BBB, only one had an "F" rating. It was that rating which led me to finally comment on the controversy.

On CoinLink's list, bullion dealer Monex has a BBB rating of F while Monaco Rare Coins has a BBB rating of A. The funny thing is that they are one and the same company operating out of the same location. How can one be an F while the other be an A?

Personally, I don't put much stock in BBB ratings. I've spent over a decade working for 20+ companies, but I was paid by only one. My business card had one company name on the front, but if you flipped it over there were 20 more on the other side.

From the IRS's point of view, each company was a separate entity, but in reality they were all under one roof with the same owner. The products shipped from the same warehouse by the same employees, and although each company had it's own 800 number, the same people answered the phones for all.

Yet the BBB ratings for each of these companies ranged from an A+ to a D. A pretty wide range considering that the customers for each company were dealing with the same group of people.

So how do you find a trustworthy dealer?

From other collectors. Coin clubs are a great place to talk to other collectors, and to get their opinions. But coin clubs also tend to have local dealers as members, so they may be a little biased.

Personally, I think the best way is through online forums. There are plenty of online forums for coin collectors where you can hear both the good and the bad. I look at it as sort of a review system not unlike the product reviews you see on Amazon.com.


At 6:15 PM, Anonymous Revitol said...

You've certainly researched this well. Awesome, awesome writing there mate! Had no idea about BBB ratings.


Post a Comment

<< Home