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Home >> Why Be Careful Buying Coins and Bullion Online?

Author: Gold Why Webmaster
Date: March, 2010
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Buying Coins Online  
© – A_Carina  
I'm super excited about today's article because it covers a serious topic, one that could save you hundreds if not thousands of dollars. I enjoy reading coin and bullion message boards (but don't post that much). Recently, I have noticed more posts about folks spending their hard earned money online on gold, silver, and copper bullion, only to see their hard earned money disappear with no product in return! Moreover, I have even received an email or two from loyal Gold Why readers about their experiences buying bullion online but never receiving their purchase. Every single time I hear about this kind of stuff, it upsets me quite a bit. I don't have a ton of money to invest in bullion. I know how difficult it is to save up your hard earned money to invest in some gold or silver coins. Today, I want to give back by explaining my personal tips for buying coins online carefully. The goal of this article: I want to make sure that no Gold Why reader ever makes a bad purchase online, losing their hard earned money on coins or bullion that is never shipped!

Tip 1: Always Be Careful Buying Coins Online, Even At Stores Reviewed On Gold Why

Gold Why is not a huge site. It's my personal hobby. At the same time, my site certainly has developed a following and continues to grow (and I thank you for that, it means a lot to me). Because of the name that Gold Why is starting to have, I am treated really well when I order coins and bullion online, especially from smaller stores. For that reason, I do believe that I sometimes experience enhanced customer service and shipping times versus the average person. When I do product reviews on this site, I never tip the mint off that I'll be doing a review. However, after my first order, I'm sure there's got to be some bias in the handling of my subsequent orders (once the store sees that a review is up and that their reputation is at stake). Please keep this in mind when buying bullion online, even from stores reviewed on my site. Just because I had a wonderful experience does not mean that's the case all the time for every person. At the end of the day, your hard earned money is yours. Treat it like gold. Remember to be careful even when you hear great things about a coin shop from me, your local coin club, or even your close friend. No two people's experiences are ever the same and it's always important to be alert and careful, formulating your own opinion. Please, remember to be paranoid about your hard earned money.

Another very important nuance: The reviews on this site are done at a set period in time. From time to time, I will make subsequent orders from the same store and do my best to update the articles. You can actually see when a review was done or updated by looking at the date toward the top of my articles. Please keep in mind that if my review was done more than three to six months ago, things very well may have changed. Customer service and quality is an ongoing effort and things are not always the same.

Tip 2: Test The Waters By Ordering a Small Amount of Gold or Silver First

So I just told you to be careful when ordering bullion online. What's the best way to do that? My personal strategy is making extremely small purchases. Sometimes, I'll start out with the smallest item in their catalog and make a test order. A great way to go small is ordering a one ounce silver round such as a silver eagle. In the copper bullion realm, I remember once making a test order that was under $5! Sure, you're going to eat some cost in terms of shipping (you'll pay expensive shipping to get one small item) but this will give you a lot of information about a coin store. You'll learn about their buying process, customer service, and shipping time. Then, once you build confidence, you may want to venture into some larger orders. However, I still say "orders" in plural because it's very important to hedge your bets. If you have $300 to spend on bullion, why not break it up into two $150 orders? Only make the second order once you've received the first one to your satisfaction.

Tip 3: Build a Personal Relationship With The Coin Store

Here's a super way to build confidence before making an order: Reach out and start asking the coin shop some informal questions. As may of you know, this is an awesome industry and the last thing I'm trying to do here is paint a negative picture. 99% of the time, folks are extremely honest and will be there to answer any question you may have, even if you're not looking to make an order. As you build a relationship via phone and email, you can build confidence that the coin store is going to take care of you. As mentioned earlier, however, it's important to keep that relationship up. Never assume the world is constant. Things change all the time and you need to stay on top of the bullion store in question before making new orders. Tip: If you try to reach out and can't get in contact with the store, please wait on your order. If the store is not responding, they could be overloaded or having temporary or permanent troubles. In this case, I've found it important to just wait a bit and then re-evaluate the situation later.

Tip 4: Go With The Big Name Coin Shops For Big Coin Orders

If you're going to make a serious purchase (anything over a few hundred dollars), I recommend going with the big names. Just search on Google and find the big companies that have been in business since the 1970s. You'll quickly find them. These are the coin shops that advertise on television, have tens (if not hundreds of employees), and are household names in our industry. Buying from the big guys is perhaps the easiest way to have that peace of mind that you're hard earned money is in good hands and that the gold bullion coins will be received flawlessly.

Tip 5: eBay and Paypal are Great For Online Bullion and Coin Purchases

I've said it many times on this site. I thoroughly enjoy buying gold and silver on eBay. You'll want to carefully read the entire article I just linked to and I'll just summarize here. eBay will very quickly kick any coin merchant off of their system that doesn't have excessively positive feedback. Therefore, if an eBay seller has a lot of positive feedback, you can typically rest assured that they will deliver. Otherwise, they would have already been kicked off of eBay. Second, Paypal (whether used with eBay or on its own) offers buyer protection. If you never receive your gold, silver, or copper, you can file a complaint with Paypal and often times get your money back. I have not had to use this service so I don't know all the details, but I have heard great things about Paypal's buyer protection and have heard stories of it being very successful for those buying coins online.

Tip 6: Please Have Realistic Expectations

From my experience the vast majority of people in our industry are really good people. Put another way, I have purchased a lot of bullion online and have always received my order. However, I'm going to tell you: There are times when my order took two or even three months to arrive! There are two cases I want to highlight. First, if you're ordering from a really large store, you'll typically have to pay by check and wait for two weeks for it to clear before they even think about shipping your order. Why? Bullion is a physical asset! The margins are very low. If your payment fails after the bullion is shipped, the seller loses their shirt. Contrast this with someone that sells software! Software costs almost nothing to produce and the company will not be in trouble if a small percentage of buyers have failed payments.

As a second case, let's think about the small store. Perhaps this small store even produces their own coins and bars, they're a "mint.". From my experience, a lot of these guys are one person operations that have full time jobs in addition to their mint. I love smaller mints because they offer incredible investment and collectible opportunities. However, things are typically slower with these guys. You will regularly have to wait at least a month (if not several) to receive your bullion. Why? A lot of the time, they carry a low inventory and have to "make" your coins after coming home from their regular 9 to 5. I can totally relate because Gold Why is my hobby and I have a 9 to 5 that prevents me from working on the site as much as I'd like. In this case, just make sure you understand what you're getting into and try to build a relationship with the store before buying. Also, in case particular case, I always recommend smaller purchases.

Conclusion and What To Do If You Are In Trouble

I sincerely hope these tips have helped you. As said earlier, it makes me upset to see anyone paying their hard earned money and then not receiving their bullion. From my experience, we're in an amazing industry, one where the vast majority of the folks involved are very honest. However, stuff happens from time to time and I hope my tips will help you when buying coins online. I'm not trying to scare you and I personally buy a lot of my coins online with a perfect batting average so far. I feel like my great batting average is a result of these coin buying tips highlighted here.

To close out, I wanted to briefly touch on a few points in case your coins have not arrived and you feel like you've been cheated. In this case, I recommend first taking a reality check. How long has it really been since you ordered? More than anyone, I get super excited about coin orders and can't wait for them to arrive. Don't let this excitement fog your reality. Second, if it has been "too long", try to contact the store. If you don't get a response after several tries, I would then go to the message boards (search on Google to see if one exists already about the store in question). If you're still having issues, it's time to talk to Paypal, the credit card company, and potentially the BBB (Better Business Bureau). I sincerely hope this case does not happen to you. Last but not least, if you're a bit afraid of buying coins online, you can also always go to your local coin shop. My personal strategy: I enjoy buying bullion coins both online and at my local coin shop.

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