Although it is easy to find a precious metals dealer, finding an honest and qualified one is much more challenging. There are a number of key attributes that you should demand in a gold and silver dealer. Key requirements are that he/she knows your business well, is financially stable, respected by peers, has demonstrated exemplary ethics, and who you can turn to in the event of a dispute.
A credible dealer will adhere to a dealer code of ethics such as that required by the American Numismatic Association. Their Distributor Code of Ethics can be viewed on their website.
6 TIPS FOR EVALUATING GOLD AND SILVER DEALERS
(1) Scope of dealer experience. What experience does the dealer you are considering have? If you are buying coins, especially for investment purposes, you want a knowledgeable and trustworthy coin dealer who can give you accurate and expert advice. You would never trust an inexperienced professional for any of your other investment needs, so don’t settle for less with your gold and silver purchases. Strong credentials and experience are a must.
(2) Does the distributor have significant assets? Although the vast majority of coins on the market are genuine, some counterfeits occasionally appear. You want to know that the dealer is likely to still be in business five years from now if that 1933 Saint-Gaudens gold dollar coin turns out to be a rare counterfeit..
(3) Is the dealer properly insured? Believe it or not, a significant number of dealers do not have adequate insurance on their inventory and transportation of gold and silver products. We have dual insurance policies with Lloyd’s of London to protect both our inventory and physical transportation. We also fully insure all shipments to our customers through all of the postal and freight carriers we use. Make sure your selected dealer is properly insured to safeguard your purchases.
(4) Is the coin dealer well known and respected among his peers? One of the best protections you can get is to use a dealer who has been vetted by your peers before being allowed to join an association or guild. Is the dealer a member of the board of directors of any of the precious metals associations? Are they active members of numismatic organizations? Organizations accredited to verify your dealer’s membership are: ICTA (Industry Council for Tangible Assets), American Numismatic Association and the Guild of Professional Numismatists.
(5) What are the ethical keys of the distributor? Coin dealers who subscribe to a code of ethical standards, such as the one adopted by ANA, have enough respect for their customers to take the extra time to give each potential customer an honest assessment if they wish to sell to the dealer. In addition, they must present the buyer with multiple low-premium bullion options unless the buyer is a collector or speculator. Only then are the numismatic and rare/antique coins a potential product for the buyer.
An ethical dealer will agree to honestly represent their products fairly, grade coins with integrity, and treat people ethically. One would expect these characteristics from any professional, but the precious metals industry is known for many who disregard our ethical standards.
(6) Do you have any recourse if something goes wrong? Coin dealers that are full members of the ANA have agreed to submit to binding arbitration to resolve disputes. This is a very important consideration if you are buying expensive coins or coins for investment purposes. What happens if there is a dispute or if the coins are lost in shipment? Avoid the headache of lawsuits and filing complaints with government agencies. Work with a dealer who provides you with sufficient resources and, again, is properly insured.