Silvertowne Auctions Dishonest,Deceptive, Un-ethical Online Auctions Leipsic Ohio

The foregoing complaint is typical of others I've seen here.  Some claims are correct and some are not, at least per my experience.

Silvertowne auctions coins; I've never seen them auction coins from the major grading houses.  I have coins from them graded by firms like PCI and CCGS -- which as far as I know are not owned in any way by Silvertowne but do (or did) use inflated grading practices.  Therein lies the potential for evil.

I have been told repeatedly by Silvertowne's employees that they guarantee the authenticity of a coin, not its grade.  Silvertowne clearly fully is aware that the material it is selling from off-beat, third-party graders often is graded improperly (though not all of the grades offered are incorrect).  Silvertowne is being honest when it says all it guarantees is the authenticity of the coin, and it is the buyer's responsibility to grade the coin per the proper rule:  Buy the coin and not the holder!

If you're in the rare-coin business, as a dealer or hobbyist, you have to learn how to grade coins!

Where this gets pernicious is in the way Silvertowne conducts the auction.  Let's say that the firm is selling an 1851 half eagle graded MS61.  This is a rare coin that sells for about $2,000.  Now, let's say the grading is inflated, that the coin really is AU55.  This is a very common, early coronet half eagle you should be able to get for about $500 -- there is a big spread between a coin in true mint state and one that has been circulated.

Clearly, here, someone was trying to rip someone off by inflating the grade of the coin, but the perp wasn't necessarily Silvertowne.  By whatever means, Silvertowne simply has gotten hold of a slabbed coin from Flybynyte Graders and added it to one of their auctions.

But, what the auctioneers do is take advantage of maximum bids by saying in advance that the MS61 coin is "rare" and sells for $2,000 (which is true).  They then add that estimate as the value of the coin, viz., if the grade of the coin be correct (and some are but this one not), it is worth $2,000 (which also is true).

The auctioneer then starts the auction:  "Who will bid $2,000?"  Of course, there are no bids.  "Well, $1,500?"  Again, no bids.  "$1,000?"  Still no bids.  And, so, the auctioneer works down from the top rather than up from the bottom.

Now, let's say you really want this coin.  You put in a maximum internet bid of $550 ahead of time, just to be safe (I'm assuming you know how to grade coins and that the offered coin is AU).  Needless to say, since the auctioneer is working top down rather than bottom up, $550 dollars is what you are going to pay.

No one else I've ever run into runs an auction that way, and once you discover what has happened, you will feel ripped off.  You also might wind up with an improperly cleaned coin because Flybynyte Grading didn't bother to mention that (and Silvertowne doesn't mention it either).  But, to some extent, you can defeat this practice by attending an auction live online, waiting for someone else to make a bid, then deciding (per notes you've taken ahead of time) whether to up the bid a notch.  The floor bidders may be local dealers or even Silvertowne, itself, which eventually will put down a "bid" of what minimum it will accept for the coin.

And, if you bid a step higher, you likely will get the coin.