What About Those Coins They Sell on TV?

If you are new to gold and silver coins, you may wonder about the coins sold on TV on shopping channels like HSN. Below is a typical presentation for a US silver eagle coin that aired earlier this year. The product being offered is a one ounce standard bullion version of a silver eagle produced by the US Mint. The coin is offered for a total of about $105 with shipping included. You may ask - Is this a coin I should buy?

On this blog, it is not our purpose to make specific investment recommendations or offer investment advice. Instead, the goal here is to provide quality information and resources so that someone new to gold and silver can better make those decisions for themselves. With that in mind, we will examine this coin as offered by HSN and provide some information and resources you can use to assess if this kind of coin would be of interest to you.

This silver eagle is the standard bullion version of the coin produced by the US Mint as noted above. The US Mint does not sell this version of the silver eagle directly to the general public, so you would need to find a coin dealer to buy one. The Mint sells these coins for a little over the spot price of silver only to a group of authorized purchasers approved by the Mint. You can learn more about that in detail from this article. 

This coin was submitted to the third party coin grading service NGC and was certified to be in MS70 condition (MS means Mint State). MS70 is considered a coin in perfect condition based on the grading scale used for coins. NGC is also certifying the coin is genuine and seals the coin in an air tight holder to preserve its condition. Grades given by grading services like NGC and PCGS are widely accepted when coins are valued for sale. The higher the grade, the higher the market value for the coin. NGC charges a fee to grade the coin. To submit a coin to NGC, you have to have annual membership. That runs $150 per year and gives you $150 of credit towards coin grading services. All things included, it would run you $20 to $25 per coin to have this coin graded at NGC if you used the lowest fee per coin. That means you are OK with waiting 2-3 weeks to get the coin back from them. If you only want one coin graded, the cost is quite a bit higher running closer to $50.

Coin dealers offer this coin both graded and ungraded to the public. An ungraded coin will sell for the spot price of silver plus a premium which varies from dealer to dealer. At the time of this article, an ungraded 2021 bullion silver eagle sells for about $38 to $41 not including any shipping fee. The price for an MS70 graded coin like this one can vary. You should do some comparison shopping for that price (find a list of dealers here -scroll to bottom of page). Other factors to consider than the base price are shipping fees, extra fees to purchase by credit card, and whether or not a return policy is offered if you want to return the coin for a refund.

What would it cost you to buy this coin and get it graded yourself? 

If you only want one graded coin, right now it would cost you about $40-$45 for the coin (with shipping included) and about $50 to have NGC grade it or a total of about $90 to $95. You would not be guaranteed the coin would grade MS70 as well. If you wanted to grade several coins with NGC, you could get the total cost per coin down to about $65 to $70 using the $150 annual membership credit.

What Does it Cost HSN for this coin graded at MS70?

We can estimate that. If they buy the coins direct in bulk from an authorized US Mint purchaser, we can assume they could probably get the coins for $30 to $32 per coin right now (with spot silver @ $27) since they buy in large quantity. Also, NGC offers bulk grading services at a reduced cost per coin. Since HSN sells tens of thousands of these kinds of graded coins a year, we can assume they likely pay $10 per coin or less. We'll use $10 for this estimate.  This means their total cost per coin is probably $40-$45 per coin. Also, HSN has to buy a lot of coins to get a large quantity of MS70 graded coins, so they have some money tied up in some coins that will not grade MS70. Those will get sold, but for less profit closer to break even. So they likely factor that into their asking price for the MS70 grade coins. Also, I assume HSN splits the profit per coin with their numismatic expert featured on the TV presentations. Of course we don't know how that may be split, but it's a cost for HSN reducing their net profit per coin.

Perhaps this helps you understand why HSN and other telemarketers sell so many of these coins. They know you can't do it yourself and come out much ahead and you also can't be sure your coin will grade MS70 if you do it yourself. For many people, it's just easier to buy the coin already graded MS70 if having an MS70 graded coin is important to them. Most are just buying one coin, so hunting around to compare pricing is not worth the time and trouble to them to perhaps save a few dollars.

Would someone new to silver coins want a graded coin or just regular ungraded bullion coins?

That is a question for each person to decide for themselves. My guess is that most people new to silver coins would want to get as much silver per dollar invested as possible. If that is the case, obviously they won't want to fool with graded coins since they can get 2 or 3 ungraded coins for the same investment. For anyone who is interested in graded coins, use this PCGS pricing guide to get a feel for the market selling price for the coins at the various grades. You can go to this page to see the price guide for silver eagles for various grades of Mint State coins for every year. If you happen to have a 1999 bullion silver eagle, you might want to grade that one. If it somehow graded MS70, it would have an estimated market value of $13,500. That's because so few coins made that year managed to grade MS70. Note that if it only grades MS69 (just one grade lower), suddenly the market value drops to $75. 

I hope this article accomplished our goal here to provide you with quality information and tools to be better informed for decision making. The more you know about coins you see for sale on TV, the better you can assess if they are for you or not.

I will add that watching the coin shows on TV (like on HSN) is something I can recommend whether you buy any coins that way or not. Most of the numismatic experts on those shows do include some good quality information on the coins in their sales pitch (see this video on the subtle difference in the "S mint" version of the 2021 bullion silver eagle as an example). You can often get some useful basic knowledge about the coins by watching the presentation. They may or may not offer coins that you have interest in. If you find you do have some interest in a particular coin, you can go and research the coin for price comparisons after learning about them on the show. So, in that regard, the TV coin show presentations do provide educational value in my view. In addition, they give you a feel for how popular a coin may be based on how well it sells during the presentation.

More Coin Info - Understanding the US Mint

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