fred S

The Scion Shop - Concern regarding value and buy-back of proof Krugerrand transaction

At the end of April 2024, I was contacted by a sales agent from The Scoin Shop with a proposal to exchange my six standard bullion Krugerrands for four proof Krugerrands. During this discussion, proof coins were presented as being more valuable than bullion coins, typically carrying a premium of approximately 30%, along with additional benefits as collectible items. Based on this information, I agreed to proceed with the exchange. It was not clear to me at the time that there is an important distinction between rare, low-mintage proof Krugerrands and more common-date proof coins. Based on my subsequent research, it appears that collector demand is generally stronger for rarer proof coins, while common-date proofs may not achieve similar premiums in the resale market. The proof coins allocated to me (1972 and 1978) appear to fall into the more common-date category. Currently, proof Krugerrands are advertised by Scoin Shop at approximately R129,000, while standard bullion Krugerrands are advertised at approximately R93,700. However, I was recently provided with an indicative buy-back price of approximately R83,000 for one of my proof coins, which is close to bullion value. This significant difference between the retail price and the buy-back price raises concerns for me about the practical resale value of these coins. It suggests that the premium paid may be difficult to recover unless a private buyer is found. From a practical perspective, I exchanged six one-ounce bullion Krugerrands for four one-ounce proof Krugerrands, effectively reducing my gold holding by two ounces. Based on the current buy-back indication, the premium attached to the proof coins does not appear to compensate for this difference in a resale scenario. Had I retained my original six bullion Krugerrands, I estimate that my current position would be substantially stronger. There were also some concerns regarding the delivery process. When I initially purchased coins, I was advised that specific coins were allocated and could be made available within a few days. However, when I later requested delivery, there were delays of several weeks. In addition, the coins were couriered from Johannesburg to Durban at a cost of approximately R7,000. I had requested delivery to a secure storage facility, but delivery to my residential address was insisted upon, which I found concerning. To resolve this matter, I would like to propose a straightforward solution: I am willing to return the four proof Krugerrands in exchange for my original six bullion Krugerrands, thereby reversing the transaction. I would appreciate the opportunity to resolve this matter amicably and would welcome a response from Scoin Shop management regarding this proposal. F J Stopforth