fred S

The Scoin Shop Misleading rip-off

The Scoin Shop - Misleading information and a rip-off deal. At the end of April 2024 I received a call from a Scoin Shop sales agent (name currently withheld) proposing that I exchange my six standard bullion Krugerrands for four proof Krugerrands. During that conversation the proofs were presented as being significantly more valuable than bullion coins, typically costing and being worth approximately 30% more. I was also told about the advantages of proof coins as collectible items and their potential usefulness in cross-border transfers and are VAT-free. What was not explained to me at the time was the important distinction between rare, low-mintage proof Krugerrands and common-date, high-mintage proof coins. After doing further research and speaking with individuals fami**** with coin investments and the numismatic market, I discovered that the vast majority of collectors are primarily interested in rare proof coins - typically low-mintage years such as 1967 or 1992. The proof coins allocated to me in the exchange, dated 1972 and 1978, are not considered rare collector pieces. In discussions with individuals fami**** with the numismatic market, I was repeatedly told that while rare proof Krugerrands may command strong collector premiums, common-date proof coins are generally purchased from dealers at substantial premiums but are very difficult to resell at anything close to those levels. My understanding now is that common-date proof Krugerrands generally trade for very little premium above the standard bullion Krugerrand price. Currently Scoin Shop advertises proof Krugerrands online for approximately R129,000, while standard bullion Krugerrands are advertised at approximately R93,700 (very interesting that the 1oz Krugerrand dates have been blocked out by a small notice that states "Random Year") I would be very interested to know how many collectors are realistically willing to pay anything close to those proof prices for common-date coins. More concerning is that a few days ago your company suggested a re-purchase price for one of my proof coins at approximately R83,000, which is essentially the same level as the bullion Krugerrand buy-back price. This situation raises a broader concern about the practical market value of common-date proof Krugerrands. If such coins are being marketed at prices in the region of R129,000, yet the same company is only willing to repurchase them at approximately R83,000, this represents a very substantial spread between the selling price and the buy-back price. A difference of this magnitude makes it extremely difficult for an investor to ever recover the premium paid, unless a private collector can be found who is willing to pay significantly above the bullion value. This critical aspect was not clearly explained to me when the exchange transaction was proposed. Viewed in simple terms - I exchanged six one-ounce bullion Krugerrands for four one-ounce proof Krugerrands, effectively giving up two ounces of gold on the understanding that the collectible premium attached to the proof coins would compensate for the difference. However, the buy-back price now offered suggests that this premium has little practical value in the resale market, leaving me in the position of having lost the equivalent of two ounces of gold. Had I simply retained my six bullion Krugerrands rather than exchanging them for four proof coins, I estimate that my position today would be approximately R160,000 better. There was also the issue of storage and delivery. When I originally purchased Krugerrands from Scoin Shop I was assured that specific coins were allocated to me and could be retrieved within four to five days. When I later requested delivery, however, I experienced delays of several weeks before the coins were finally released? Eventually the coins were couriered from Johannesburg to Durban at a cost of approximately R7,000. I also requested that the coins be delivered to a secure storage facility in Durban, but this was refused and delivery to my residential address was insisted upon. In the current security environment this placed my family in an unnecessarily uncomfortable and potentially unsafe position. In order to demonstrate that Scoin believes the original transaction was fair and reasonable, I would like to propose a straightforward resolution. I will return the four proof coins in exchange for my original six bullion Krugerrands and we can consider the matter closed. If the original transaction was as beneficial as it was presented to me, I cannot see why such a proposal would be unreasonable. I would prefer to resolve this matter amicably. However, I have an interesting recording with a sales agent and will take up my case with The Consumer Protection Act and also an ombudsman if I don't get satisfaction on this matter. I will continue to pursue the issue and ensure that potential buyers fully understand the realities surrounding the purchase of common-date proof coins. I would welcome a response from Scoin management explaining how this transaction can be viewed as fair value for a client and how my particular issue can be resolved promptly F J Stopforth