Don't let Counterfeits Spoil the Holidays by Peter Rexford on Creators.com

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Don't let Counterfeits Spoil the Holidays

For longer than I care to think about, at this time of year I begin offering suggestions for holiday-related gifts that collectors may enjoy. They usually range from quite inexpensive to "mortgage-the-home." Considering the economy, this year, I'll try to be fairly prudent in what I recommend. In fact, my first suggestion doesn't cost anything but can save you a fortune.

Let me begin by saying, when I was much younger, the running joke was to look at a product to see if it was stamped "Made In Japan." If so, the quality was sure to be rotten. Of course, that's changed — especially in the category of automobiles. Fast forward to today. Look at 90 percent of what's sold in stores and you'll see "Made In China." Many contend that's been a major problem for our economy and U.S. jobs. But here's the flip side. Coin collectors everywhere wish certain Chinese manufacturers would emblazon their products with that marking in BOLD letters.

The problem is a result of Chinese-made counterfeit "rare" coins. Even with the U.S. economy still in the doldrums, collectors spend an estimated $5 billion annually for their hobby or as an investment. Unfortunately, at the same time, the public is spending millions of dollars for fake U.S. coins made in China and sold at swap meets, flea markets or online auction sites. Worst of all, these counterfeits are very good and can fool most average collectors.

By law, any "replica" coin must have the word "COPY" stamped onto it. These counterfeit coins don't; they are clearly made to fool the buyer and make a small fortune for the seller. According to the hobby newspaper Coin World, a full 99 percent of the "replica" items do not have the word "COPY" on them. One brazen manufacturer in China boasted that he had made and sold over a million counterfeit coins.

The existence of counterfeits is no long an isolated situation. Some hobby publications have reported that millions of such fake coins from China have been foisted on unsuspecting buyers in the United States. Consequently, five groups — the American Numismatic Association (ANA), Industry Council for Tangible Assets (ICTA), Numismatic Guaranty Corporation (NGC), Professional Coin Grading Service (PCGS) and the Professional Numismatists Guild (PNG) — have issued an urgent warning advising any buyer to beware.

The advent of the spurious coins is eerily reminiscent of recent warnings regarding many autographs (especially those that are sports-related) being sold online.

Some have estimated that up to 90 percent of autographs sold online are bogus.

So, what's the solution? It's actually fairly simple. If you don't know rare coins — and most wouldn't be able to spot this caliber of counterfeit — you'd better know your coin dealer. Industry professionals suggest buyers only purchase from reputable and knowledgeable dealers who have a return policy with regard to non-genuine coins. And there's more.

For coins with a market value of over $100, having them authenticated, graded and certified is almost a must. There are reliable rare coin authentication companies with a long record of professionally guaranteeing the authenticity of rare coins. Two of the most prominent are Numismatic Guaranty Corp. and Professional Coin Grading Service. Each company is nationally recognized as reliable and accurate by coin dealers.

Here's one example of why having coins certified genuine is so important. A Mercury dime from 1916 in "Almost Uncirculated" condition is currently valued at an affordable $16. But, if on the back of the coin there is a tiny "D" denoting that it was struck in Denver, the value for that same coin skyrockets to — I'm not kidding — over $7,000.

That's a true example of what Chinese counterfeiters have created. The seller may offer the fake to you for a bargain price of $2,500. You think you've just made a steal. But, in truth, they've stolen $2,500 from you because the coin is effectively worthless.

None of this is meant to scare anyone away from collecting, but as with anything, knowledge is not only power but also profit.

One great investment for anyone interested in coins would be to spend a dollar on the booklet, "What You Should Know Before You Buy Rare Coins." Published by the Professional Numismatists Guild, it could save you or someone you know a major headache if not thousands of dollars.

To get one, send one dollar and a note requesting the pamphlet to: Professional Numismatists Guild, 3950 Concordia Lane, Fallbrook, CA 92028.

Editor's Note: A JPEG visual of a counterfeit 1916-D dime from China has been sent with this column.

To find out more about Peter Rexford and to read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.