Coin firm’s $2 bill offer doesn’t make sense
It’s fair to say that Lex duPont totally digs $2 bills.
He always makes sure he has a few in his wallet. He particularly enjoys leaving $2 bills as tips. He loves the look on people’s faces when he lays one on them.
“It’s not an obsession,” DuPont, 59, told me. “But if you ask anyone, they’ll say, ‘Lex and those damn $2 bills.’”
So it was with more than passing interest to the West Los Angeles resident when he received an ad in the mail recently offering a “seldom-seen $2 note in crisp, uncirculated condition for $2!”
Wow — a $2 bill for just $2. But that’s not all.
DuPont would also receive a brand-new Great Smoky Mountains National Park quarter at no additional cost.
So that’s $2.25 worth of money for $2.
“I had to wonder,” DuPont said, “are these guys nuts?”
Good question, and not just because selling $2.25 worth of money for $2 would strike most people as perhaps not the savviest business model.
What also jumped out at DuPont was the ad saying that the “sought-after” $2 note was being marked down 78% from its regular price of $9.50.
“That’s really strange,” he said. “I never have a problem getting $2 bills at the bank for $2 each. I’ll get $100 worth of them in one visit.”
I put that to the test at a downtown Bank of America branch, where I asked the teller if she had any sought-after, seldom-seen $2 bills in stock.
“Sure,” she said, checking her inventory. “About 150 of them.”
At $9.50 each, that could have set me back $1,425. But the teller wanted only $2 for each $2 note, many of which, she said, were in pristine condition.
So what’s the story behind the ad DuPont received?
It was from New Hampshire’s Littleton Coin Co., which touts itself as “America’s favorite coin source.” Thanks to its aggressive marketing, Littleton is described by About.com as “perhaps the best-known coin dealer in America.”
“Our goal is to provide you with the largest selection of quality products, along with world-class customer service,” David Sundman, Littleton’s president, says on the company’s website. “We don’t want to just meet your expectations. We want to exceed them, so you can enjoy the best possible collecting experience.”
I’m no numismatist, but I found plenty of coin collectors online complaining about Littleton’s prices. One collector posted a YouTube video showing a coin he’d received from the company that he said could have been obtained for a fraction of the cost elsewhere.
Landon Sorgenstein, manager of Wilshire Coin in Santa Monica, said it’s an open secret in the collectible-cash world that Littleton isn’t the go-to place for the best deals.
“I’ve never seen anything that says they’re not trustworthy,” he said. “But the stuff Littleton sells, we sell a lot cheaper. I’m sure they have huge marketing costs that they have to pass on to consumers.”
I guess that could explain charging $9.50 for a $2 bill. But it doesn’t explain offering $2.25 worth of money for only $2.
In its ad, Littleton says that by requesting a $2 bill and free quarter, you’ll also receive “other fascinating selections from our Free Examination Coins-on-Approval Service.”
What that magnificently meaningless phrase means is that Littleton will include up to five additional coins with your order — a Kennedy half-dollar, say, or a buffalo-head nickel.
If you keep them, they’ll cost you as much as $30. If you don’t want them, you’ll have to return them using Littleton’s postage-paid label.
Anyone who got suckered into Columbia House’s mail-order record racket as a kid — and that includes me — probably will recall the hassle of having to return things you never wanted. Littleton’s prepaid label helps, but you still have to get the package back in the mail.
In any case, nowhere in Littleton’s ad does it spell out that “coins on approval” means you’ll automatically receive products you didn’t request.
John Hennessey, Littleton’s vice president of marketing, said this sales tactic is “a way to introduce potential new customers to our company.”
“Some people choose not to do business with us,” he said. “Enough do.”
I asked if the company’s ads adequately disclose that “coins on approval” means you’ll receive extra coins that you have to pay for if you decide to keep them.
“It seems clear to me when I read it,” Hennessey replied.
I also asked how Littleton can get away with charging $9.50 for a $2 note. Hennessey said that this is the company’s price for a $2 bill that’s never been circulated.
I said I could get an uncirculated $2 bill at the bank for $2.
“Yes, that’s probably true,” he said.
Littleton seems like a respectable company. While their marketing might be questionable, it doesn’t appear as though they’re trying to cheat anyone.
That said, I don’t recommend paying more than $2 for any $2 bill, “sought-after” or otherwise.
And if someone sweetens the deal with a free quarter, you can be sure they’ve got an ulterior motive.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to firstname.lastname@example.org.
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