Debating US Mint Ordering and Mintage Limits

by Mike Unser on October 28, 2016 · 55 comments

US Mint at Philadelphia

The United States Mint hosted its 2016 Numismatic Forum in Philadelphia (CoinNews photo of the U.S. Mint facilty at Philadelphia)

The United States Mint wants to make and sell as many coins as the public will buy, but admits there have been misses in balancing demand and mintages and in setting household ordering limits.

Back on Oct. 13, the U.S. Mint hosted its 2016 Numismatic Forum at the Federal Reserve Bank in Philadelphia. Mintages and products limits were among topics discussed in one of seven group sessions held at the event.

There were six of us randomly assigned to the group. Team members ranged from a collector who bought only coins that he liked; without care for their value, to a well-known dealer who has been in the coin business for over 40 years. Author and former Coin World editor Beth Deisher was also in the group, providing decades of insights she gleaned from reporting on numismatics.

In our group "assignment," U.S. Mint officials asked us to discuss their limits and give them recommendations. Before starting, we received the following summary guidance:

"How can we be more responsive and have the ability to include new customers? What are your thoughts and ideas regarding mintage limits, ordering via ‘Online/Call Center only’ or setting the appropriate Household Order Limit? How do we balance demand and mintage limits — for example, made to order vs fixed mintage limit?"

We had about an hour to debate and discuss topics. Those of us who didn’t already know learned quickly that there are no simple or perfect solutions that will make everyone happy.

There were varying perspectives, as you’d expect, but we were able to offer some consensus recommendations. We came to them after weighing options and talking with U.S. Mint officials to include Principal Deputy Director Rhett Jeppson and Dufour Woolfley, Division Chief of E-Commerce, Numismatics and Bullion Directorate. They recounted some of their obstacles, objectives and goals. In summarizing my takeaways from those:

  • The U.S. Mint usually doesn’t have a lot of metrics available to help in forecasting how well new products will sell, with this year’s 100th anniversary coinage a recent example. They have used customer surveys as a projection tool.

  • The U.S. Mint doesn’t like it when a new product goes on back order, noting that orders pretty much tank after it happens. Conversely, overproducing coins for the sake of having an unlimited supply doesn’t work — they don’t want to make too many coins or buy packaging only to later destroy them.

  • The U.S. Mint wants to ship products to customers as soon as possible, a point mentioned in multiple settings.

  • The U.S. Mint understands that a coin’s mintage and product limits can influence sales greatly — for good or bad.

  • The U.S. Mint outsources product packaging to makers overseas. It takes a lot more time to reorder and get additional packaging than it does to strike more coins, making initial sales projections all the more important.

I think most of us would have liked more time to kick around ideas but we did offer general recommendations. They included:

  • Transparency. The U.S. Mint should clearly communicate any limiting factors for a product before it launches.

  • Mintages. When it comes to high-profile products, consult with a small panel of collectors, dealers and other numismatists. Let the panel help in arriving at mintages for unique products like American Liberty Silver Medals and Ronald Reagan Coin & Chronicles Sets.

  • Household Order Limits. When ordering limits are in effect, start them at 1 coin per household and then move to unlimited after several hours/days or after sales hit or failed to reach a certain level. The public should be aware up front when limits will or could expire.

The goal of our last recommendation is to make sure popular products are available to as many collectors as possible while giving dealers an earlier opportunity to buy them in bulk. The group suggested a standard ordering limit of 1 coin through the first three days. I actually recommended a shorter period like a half day — from the noon release until midnight. I thought a 12-hour window met our main goals and could create more "buzz" around a coin’s launch and sharpen sales.

We didn’t have much time to debate the value of products made to order but we thought it was viable in certain instances. The 2013-W $50 Reverse Proof Gold Buffalo was made-to-order, selling only during a four-week window without mintage or household ordering limits. Essentially, modern commemorative coins fall into the same class because of mandated year-end sales deadlines and unrealistically high mintages.

Generally, there is less excitement with coins made to order. Unless you’re selling a gotta-have product, made-to-order encourages procrastination.

A home run product coupled with confident sales forecasts give this method the best chance of success. It lets the Mint build inventory so products can begin shipping on their launch. In 2013, many buyers of the reverse proof Buffalo had to wait several weeks to receive theirs. That didn’t go over well.

There was one of our group members who pretty much disagreed with almost everything we discussed, and expressed very little trust in Mint officials. He represents a slice of the Mint’s customer base that, frankly, I don’t think they’ll ever win over. Some of his viewpoints were understandable but he lost footing by arguing instead of suggesting possible solutions to issues he felt were important.

Please feel free to comment or offer your own ideas. I owe the Mint some follow-up information and I can include your thoughts.

{ 5 comments… read them below or add one }

JesustheLionofJudah November 1, 2016 at 12:03 pm

I would posit thank Household Limits should never be fewer than 5 – people have children and grandchildren they would like to buy for plus most collectors also like to have 3 to 5 of the coins anyway.
Having a household limit of only 1 is destructive to the salability of the coin because the coin will never sellout like that and once people see that a sellout has not been achieved probably 20 percent of the people will return their coins/cancel their order because they see that the coin will not be valuable.
Conversely, making a household limit of 5 means collectors can buy several and it is much easier to hit a sellout and therefore achieve the goal of making a VALUABLE coin, which is what people want to collect – its WHY virtually all people collect coins because they are supposed to increase in value as an investment.
It would be a terrible idea to buy stocks that decrease or stay the same as the purchase price, so why would anyone buy coins that perform the same way? They wouldn’t.
The US Mint COULD have had home runs with all the Kennedy coins and the Gold SLQ as well as many other coins the last 10 years but instead they have retarded their sales (me personally I’ve virtually stopped buying all US Mint coins because they have been worth the same or lower than issue price due to high mintages and HH limits of 1) through Very high mintages (gold coins should NEVER have mintages higher than 50,000 and even that is a very high number – the more gold in it, like 3 oz or something, then lower the mintage to 10,000 or lower) and HH limit of 1.
So, I’ll start buying again when the US MINT makes coins that have LOW MINTAGES (ie 50,000 for a single gold coin, 100,000 to 150,000 for a single silver coin) and a household limit of FIVE.

JesustheLionofJudah November 1, 2016 at 12:07 pm

Also, ALWAYS first come, first serve

jim November 2, 2016 at 1:42 pm

Seth –
Miserable numbers from a mint who says they don’t have a lot of metrics. A loss of 23% revenue says the mint should revisit the numismatic business and seriously consider abandoning it altogether. Or continue on with just a few staples and proven winners. Based on these numbers coin collecting is obviously a dying hobby with only 8% of the collecting population under the age of 45.

Or maybe it’s our thinking that needs to be revised and stop trying to make the US Mint a competitor in a world where Congressional oversight is a built-in road to failure.

Either way, I’m glad to see these numbers even if they are bad news. Those of us on the outside never get to see inside the mint in this way. Thanks.

joera November 6, 2016 at 1:23 am

As far as the packing goes we buy the coin, not the package. I know the packaging is important and needed but it is not the center of the product. Depending on the coin or coin program being issued the packing, for me anyway, should include information about the coin or coins in the set. Like on the Reagan Coin & Chronicles Set for instance, why was the Silver Eagle included in that set? What is the planed mintage of the coin? In what year did that coin program start and in what year of production is that coin in. But then again, the package is not the center of collecting.
And there should be more of these meetings in more cities through out the year to keep with the collecting community.

bobby November 7, 2016 at 10:48 am

I buy as many new products as I can afford. if I wanted graded I would buy it of the TV. I like OGP the coins I buy I am also buying the box that they come in.
after spending $600 bucks on a gold quarter. you would think they could put some paper around my single coin to keep it from rattling around in the box it came in. upon receiving my single coin I could clearly here two items in the box. I could only assume the coin came out of its holder. they were rattling around in this government box like the last two tick taks in there container. after two attempts to get an OGP from the mint . I cancelled my order. and will support my local coin shop and purchase graded coins . I am done with the US MINT.

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