Viewpoint: Why Impose $12.50 Direct Ship Fee?

By Michael Zielinski, Numismatic News December 05, 2011

This article was originally printed in Numismatic News.
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The U.S. Mint has made a further modification to the circulating $1 coin Direct Ship program. As of Nov. 15, the Mint will impose an order fulfillment charge of $12.50 for each box of coins ordered through the program.

The Direct Ship program was introduced in June 2008 as a means to proactively comply with the requirement of Public Law 109-145 to remove barriers and improve circulation of the $1 coin. Individuals or businesses were able to order quantities of $250 worth of $1 coins directly from the Mint at face value. Typically, the coins are distributed by the Federal Reserve Banks in $1,000 boxes or $2,000 bags. In theory, the direct distribution in smaller quantities would allow the $1 coins to be more easily introduced into circulation.

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Abuses of the program were widely reported in late 2009. Some individuals used the program to earn miles or rewards on their credit cards. Massive quantities of coins were ordered at face value with a credit card, which were immediately deposited at a bank. The net result was zero cost with the accrued credit card rewards. In the most extreme case, a Wall Street Journal article mentioned one person who claimed to have bought $800,000 in coins through the program.

Since this time, the U.S. Mint has struggled to curb the abuses to the program. Initially, the Mint was reported to have tracked down and cut off some of the biggest abusers. In early newspaper coverage, Mint representatives made statements indicating that coins ordered through the program would be treated as cash advances, although this turned out to be false. Later, the Mint imposed specific ordering limits and required customers to agree to comply with the intended purpose of the program. In July, the Mint stopped accepting credit card orders through the program and required payment by check, money order, or bank wire.

The Mint offered this explanation for the new $12.50 fee for each box ordered through the program: “This new charge is a result of our continual effort to review programs to ensure that they meet our commitment to prudent fiscal management on behalf of the American public.”

The decision to start imposing a fee now seems completely ridiculous.

According to data included in a report issued by the Board of Governors of the Federal Reserve System, the United States Mint distributed 244 million $1 coins through the Direct Ship Program through June 1. This means that the US. .Mint absorbed the costs of credit card fees, order fulfillment and shipping for nearly 1 million $250 boxes of coins, during a period of widespread abuse.

After the recent requirement for payment by check, money order or wire was imposed, surely anyone using the program just to earn credit card rewards would have stopped. So now that all of the abusers of the program are finally gone, the U.S. Mint will impose fees on the remaining legitimate users? And this is supposed to remove barriers and improve circulation of $1 coins? Clearly, the original concept of the Direct Ship program has gone completely out the window.

This Viewpoint was originally posted by Michael Zielinski on mintnewsblog. Viewpoint is a forum for the expression of opinion on a variety of numismatic subjects. To have your opinion considered for Viewpoint, write to David C. Harper, Editor, Numismatic News, 700 E. State St., Iola, WI 54990. Send email to david.harper@fwmedia.com.

Wednesday, July 21, 2010

US Mint Numismatic Gold Coin Prices Should Decline

Posted By CoinLink On May 24, 2010 @ 12:03 pm In Gold & Silver Bullion, Press Releases, US Coins, US Mint | No Comments

The U.S. Mint has confirmed that it plans to release five-ounce .999 fine silver bullion coins later this year in accordance with the AMERICA’S BEAUTIFUL NATIONAL PARKS QUARTER DOLLAR COIN ACT OF 2008 . The coins will be the first five-ounce coins ever produced by the Mint.

            The coins will bear the same designs as the new legal-tender quarters of the America the Beautiful Quarters Program. The first quarter in the program, honoring Hot Springs National Park in Arkansas, was released into the banking system April 19, 2010. Four more quarters will be released this year, with five quarters being released annually through 2021, concluding with the final quarter in 2022. The new quarters will commemorate 56 national parks and sites.

The Mint’s America the Beautiful Program will be well received as will be the companion five-ounce silver bullion coins. The America the Beautiful Quarters Program follows on the heels the U.S. Mint’s hugely successful State Quarters Program, which only recently concluded. The five-ounce coins will be sold via the U.S. Mint’s distribution system that has made American Eagle gold bullion coins and American Eagle silver bullion coins the best-selling gold and silver bullion coins in the world.

The five-ounce silver bullion coins will be near exact replicas of the legal-tender quarter dollars, with the inscriptions on the silver bullion coins identical to those on the quarters, including the denomination “quarter dollar.” However, legal-tender quarters will have milled edges (Also called reeded edges in the coin industry.) The five-ounce coins will not have milled edges but will have their fineness (.999) and their weighs (five troy ounces) incused as edge lettering. The individual coins will be three inches in diameter.

The Mint has not given a release date for the five-ounce coins beyond “mid-year.” Nor has the Mint disclosed how the coins will be packaged. The Mint ships its one-ounce Gold Eagle coins and one-ounce Silver Eagle coins five hundred to a box, twenty-five tubes, twenty coins to a tube. This packaging method has worked extremely well, both for shipping and for protecting the coins against damage during shipment and while stored by investors. It is likely that the Mint will package the coins five or ten to a tube, five hundred ounces (100 coins) to a box, which would weigh right at forty-two pounds.

Finally, the Mint has given no hint as to the premium at which it will sell the new five-ounces silver coins. It is likely that the America the Beautiful silver bullion coins will carry smaller premiums than the premiums on 1-oz Silver.

By Arlyn G. Sieber
April 29, 2010

Congress has authorized a myriad of commemorative coin series since 1982. Commemorative coins honor events, people, organizations, or other things, and are authorized by law. They are official U.S. government issues and legal tender, but they are not intended to circulate.

Instead, the U.S. Mint—at a premium above face value—sells them directly to collectors. Laws authorizing commemorative coins usually mandate that a certain amount of the purchase price benefit a group or event related to the coin’s theme.

In terms of cost, collecting modern commemoratives is a step up from collecting coins from circulation at face value or buying them at shops or shows for a few dollars each. But focusing on one or more collecting strategies, as outlined earlier, can keep purchases within a budget.

The Story Behind the Coins

The first U.S. commemorative coin was an 1892 half dollar for the Columbian Exposition. The exposition was held May 1-Oct. 30, 1893, in Chicago to commemorate the 400th anniversary of Columbus’ arrival in the New World. The U.S. Mint struck 950,000 Columbian half dollars dated 1892 and more than 1.5 million dated 1893.

The Columbian half dollar opened the door to many other commemorative coins from the 1910s and continuing into the 1950s. Most were silver half dollars, but there was also an 1893 quarter (also for the Columbian Exposition), a number of gold dollars, two gold $2.50 coins, and two gold $50 coins.

The coins were sold by the Mint at a premium above face value with a portion of the proceeds benefiting some organization or event related to the coin’s theme. Some of the coins commemorated state anniversaries or national themes, such as the U.S. Sesquicentennial in 1926.

There were no less than 18 commemorative half dollars issued in 1936 alone. Among them was an issue commemorating the 75th anniversary of the Battle of Gettysburg. Others, however, were of little national importance, such as issues for the Cincinnati Music Center and the centennial of Elgin, Ill.

Congress grew weary of U.S. coinage being used as local fundraisers, and the flow of commemorative coins slowed in the 1940s and ’50s. The last issue among what are commonly called “early” commemoratives was a 1954 half dollar honoring Booker T. Washington and George Washington Carver.

A 28-year hiatus on commemorative coinage ensued until Congress authorized a half dollar in the traditional 90-percent-silver composition to honor the 250th anniversary of George Washington’s birth in 1982. Thus began what are commonly called “modern” commemoratives.

The Washington coin was a winner in many respects: First, its theme was of truly national significance and worthy of commemoration. Second, its design by Mint engraver Elizabeth Jones featured a striking depiction of Washington on horseback, a departure from the staid busts used for portraiture on coins since the Lincoln cent of 1909. The reverse, also designed by Jones, features a view of Washington’s Mount Vernon home.

These factors, combined with the long break in commemorative coinage, made the coin popular with collectors. The Mint sold more than 2.2 million uncirculated versions (“D” mintmark) and almost 4.9 million proof versions (“S” mintmark).

Like the Columbian half dollar 90 years earlier, the George Washington half dollar opened the door to more commemorative coinage, and like the commemorative coinage of the 1930s, an undesirable proliferation resulted. The coins’ themes in the 1990s weren’t as localized as many of those in the 1930s, but commemorative coinage became an easy mark for senators and U.S. representatives looking to do a favor for a constituency or a favor for a fellow lawmaker by offering their vote for a commemorative coin program. Commemorative coins could raise funds for a pet cause through surcharges on the Mint’s sales of the coins, and a vote for a program went largely unnoticed by the general public.

The year 1994 alone brought five commemorative coin programs: World Cup soccer, National Prisoner of War Museum, U.S. Capitol Bicentennial, Vietnam Veterans Memorial, and Women in Military Service Memorial. Although each theme had its virtues, the market for commemorative coins couldn’t keep up with all the issues, and sales plummeted from the highs of the Washington half dollar and other early issues in the modern era.

In response, Congress passed the Commemorative Coin Reform Act of 1996. Among other provisions, it limits the number of commemorative themes to two per year. In addition, congressional proposals for commemorative coins must be reviewed by the Citizens Coinage Advisory Committee, which reports to the Treasury secretary. The 10-person committee consists of members from the general public and those with credentials in American history, sculpture, and numismatics.

Where to Get Them

Current-year commemoratives can be purchased directly from the U.S. Mint (www.usmint.gov). Issues from previous years can be purchased at shows, shops, or through advertisements in hobby publications, such as Coins magazine.

Collecting Strategies

A complete collection of every commemorative half dollar, silver dollar, and gold coin issued since 1982 is a commendable but daunting goal for many collectors, especially beginners. Following are suggestions for getting started in collecting modern commemoratives, which can lead to expanding the collection in the future:

Collect What You Like

If you see a modern commemorative coin and you like it, buy it. The coin may appeal to you because of its theme or design. Whatever the reason, if you like the coin and are willing to pay the asking price, it will make a great addition to your collection.

By Denomination

A new collector may want to focus on just the commemorative half dollars issued since 1982 or just the silver dollars. With a good value guide in hand and more money to spend, a new collector could also venture into gold coins and select one or more of the many commemorative gold $5 coins.

By Theme

Collectors of modern commemoratives can also focus on a particular theme that appeals to them, such as presidents, the Olympics or other sports, women, or military themes. Again, collect what you like.

As a Complement to a Circulating-Coin Collection

One or more commemorative coins can complement a collection of circulating coins with similar design themes. For example, a 1993 silver dollar commemorating the 250th anniversary of Thomas Jefferson’s birth can complement a collection of Westward Journey nickels. A 1990 silver dollar commemorating the centennial of Dwight Eisenhower’s birth can complement a collection of Eisenhower dollars.

By Set

When selling a current-year commemorative series, the U.S. Mint often offers various sets containing individual coins in the series in uncirculated and proof versions. For example, the 1986 Statue of Liberty Centennial coin series consisted of a base-metal half dollar, silver dollar, and gold $5. Various sets of the series offered by the Mint that year included a two-coin set consisting of an uncirculated silver dollar and clad half dollar; a three-coin set consisting of uncirculated versions of each coin; and a six-coin set consisting of proof and uncirculated versions of each coin.

These and sets of other series can be found in their original Mint packaging at shops and shows, and through advertisements in hobby publications such as Coins magazine.

How Much?

Some of the least popular commemorative coins at the time of their issue are the most expensive on the secondary market today, and some of the most popular commemorative coins at the time of their issue are the most affordable today. Why? The least popular coins didn’t sell as well, which resulted in lower mintages. Generally speaking, the scarcer coins are more valued by collectors, which increases demand and drives up their asking prices on the secondary market.

For example, the 1982 George Washington silver commemorative half dollar was popular and sold well at the time of issue. With millions of coins produced, either an uncirculated or proof example can be purchased for under $10.

In contrast, less than 50,000 uncirculated versions of the 1996 Atlanta Olympics commemorative clad half dollar with the swimmer design were produced. Expect to pay more than $150 for one on the secondary market.

Coin Prices magazine, available on many newsstands, provides a complete list of modern U.S. commemorative coins and a guide to current retail values.

Mintmarks

Modern U.S. commemorative coins have either a “P” mintmark for Philadelphia, “D” for Denver, “S” for San Francisco, or a “W” for West Point, N.Y. Mintmark location varies by coin.

Condition

Commemorative coins are specially handled and packaged at the mints. Thus, grading is less of a factor in purchasing and collecting them.

Still, check each coin before you purchase it or after you receive it in the mail. Make sure its surfaces are clean and free of scratches or other significant blemishes.

The U.S. Mint has a 30-day return policy for coins purchased directly from it. Mail-order dealers, such as those who advertise in Coins magazine, also offer return policies. Check individual ads for specific terms.

How to Store Them

Keep commemorative coins in their original U.S. Mint packaging, whether purchased directly from the Mint or on the secondary market. The packaging is suitable for long-term storage and protects the coins from wear and blemishes that occur when handled directly.

2009 Gold Buffalo Coins Sell Out

By Numismatic News April 06, 2010

Sellout of the 2009 one-ounce proof gold American Buffalo coin was announced by the U.S. Mint March 29.

Sales stopped when they reached approximately 50,000, though an updated figure was not provided from the prior week’s 49,388 reported in Mint Statistics on Page 50.

The proof Buffalo was the only taste of proof gold that collectors had in 2009 as a shortage of planchets kept the popular gold American Eagles out of production.

Sales of the proof 2009 one-ounce Buffalo began Oct. 29.

If the Mint can continue to satisfy the ongoing demand for bullion gold American Eagles, then the proofs and the “W” uncirculated coins will likely be struck and sold directly to collectors some time in 2010.

Mint Stats: Mint Hikes Prices for Gold Buffalo, Spouse

By Debbie Bradley, Numismatic News March 04, 2010

Other News & Articles

• Mint Stats: Mint Hikes Prices for Gold Buffalo, Spouse
• Think Twice Before Cleaning Any of Your Coins
• Disabled Vet Proof Prices Rise

 

Keep an eye on sales of gold Buffaloes and First Spouse coins in coming weeks, because they’ve seen a price hike.

When gold edged above a $1,100 an ounce average for a week on the London Fix, the Mint increased prices in accordance with its policy to reflect market prices. The change took place Feb. 24.

The price of First Spouse coins increased by $25 and gold Buffaloes by $50. The proof First Spouse coins went from $704 to $729, uncirculated First Spouse coins went from $691 to $716 and 2009 Buffalo gold coins increased from $1,360 to $1,410.

And in its first week of sales, the coin honoring Disabled American Veterans sold more than 98,000 coins, almost one-third of its total mintage of 350,000.

WASHINGTON (Commodity Online): The United States Mint has suspended sale of its one ounce gold coin and in a statement it said the mint has depleted its inventory of 2009 American Buffalo one ounce gold bullion coins.

According to Mineweb, supply problems also persist with smaller gold coins, particularly given the enormous demand for fractional sized gold coins following the suspension of the one ounce Gold Eagles. Thus the Mint was forced to issue a second memo on Friday saying the American Eagle Gold Tenth-Ounce Coin inventory was depleted and that inventory for the half-ounce and quarter-ounce coins remains very limited. Following the sale of these remaining gold coins on Friday, the Mint anticipated that it would again offer all fractional sizes by mid-December, but in an allocation process.

The resumption of American Silver Eagle bullion sales will resume this week. These silver coins were suspended along with the one ounce gold coins a week ago – also due to depletion.

The Mint had been trying to control sales by not releasing the 2009 coins for sale until late in the year – they are usually available throughout the year, but demand has proven to be enormous. This doesn’t mean though that coins are not available to the US public as some authorized dealers will continue to hold stocks, although these are being depleted rapidly and premiums charged on sales are increasing.

According to a report on website Coinupdate.com “The US Mint began sales of fractional weight American Gold Eagle bullion coins on December 3, 2009…. These fractional Gold Eagles are typically available throughout the year, but this year the Mint delayed the release to focus production on the one ounce bullion coins. After only one day of availability, the US Mint recorded sales of 56,000 of the one-half ounce coins, 58,000 of the one-quarter ounce coins, and 260,000 of the one-tenth ounce coins. They have indicated that the inventory for one-tenth ounce coins has already been depleted and the inventory for one-half and one-quarter ounce coins is limited. The remaining limited inventory will be offered via the US Mint’s standard allocation process and additional inventory is expected to be available in mid-December.”

While the shortage of US Mint offerings due to demand exceeding supply is, in reality, not that significant in terms of global gold sales it does demonstrate the extent to which demand for easily available physical gold has increased over the past two years. Some of this has been the ever increasing interest by the U.S. public in gold in general and also a certain amount of distrust generated by some commentators as to whether the various ‘paper gold’ offerings were secure.

(Source: Mineweb)

The U.S. Mint announced November 24th, 2009 that they were ceasing sales of 2009 1 oz Gold American Eagles and 2009 1 oz Silver American Eagles. They did not state when sales would resume. Prices on both are expected to increase due to strong demand and possible lack of product to sell.

If you are interested in purchasing these please call J&T Coins LLC at 866-267-6024.