In a written statement to Congress, well-known rare coin dealer and award-winning numismatic author, Michael Fuljenz, stated that recent problems involving the marketing and delivery of popular gold and silver bullion coins are due to "a lack of adequate communications" by officials of the United States Mint.
Fuljenz, President of Universal Coin & Bullion in Beaumont, Texas, submitted his written comments for the record of the April 7, 2011 hearing on "Bullion Coin Programs of the United States Mint: Can They Be Improved?" conducted by the House Financial Services Subcommittee on Domestic Monetary Policy and Technology. The comments were accepted into the official record by Subcommittee Chairman Ron Paul of Texas, and mentioned during the hearing.
"What happens when there’s a failure to communicate? Retail dealers simply can not effectively promote and sell the Mint’s news products, and face the undeserved wrath of the public for problems the dealers did not create," Fuljenz explained.
Unable to obtain America the Beautiful bullion coins, Universal Coin & Bullion has started offering Royal Canadian Mint products to meet the public demand for silver bullion coins.
"I would love to sell more U.S. Mint products, but we need better communication and reliability to plan advertising around the release of U.S. Mint products. I sent an outline of my concerns and constructive recommendations to some long-time Mint employees I’ve known and respected. They subsequently were forwarded to upper-level Mint management. However, I never received a response from anyone in upper management," Fuljenz wrote.
Among the constructive suggestions he offered for improving the Mint’s communication with dealers and the public: give 30 to 60 days notice before new bullion issues are released, and be consistent by releasing annual bullion coins in the same quarter each year.
Universal Coin & Bullion sells over 100,000 of the United States Mint’s bullion coin products each year and spends over $2 million annually to advertise them, according to Fuljenz. In the past, UCB has done co-op advertising with the Mint, and Fuljenz participated in a consultation summit with then-Mint Director Philip N. Diehl.
Here is the complete text of the comments Fuljenz submitted to the hearing and entered in the Congressional Record.
Comments from Michael Fuljenz
President, Universal Coin & Bullion, Beaumont, Texas
Submitted for the record of the April 7, 2011 hearing on
"Bullion Coin Programs of the
United States Mint: Can They Be Improved?"
Conducted by the House Financial Services Subcommittee
on Domestic Monetary Policy and Technology
The recent, on-going problems created by the United States Mint involving sales of new issues of coins can be summed up by the famous line from the Paul Newman movie, Cool Hand Luke: "What we have here is (a) failure to communicate."
For the past decade there’s been a lack of willingness by the Mint to meet with major retailers. For me, this lack of adequate communications has created unnecessary expense and customer service issues because of the Mint’s production and delivery problems and indecisions with the Platinum Bullion Program, America the Beautiful coins and 2009-dated one-tenth ounce gold Eagles. The Mint must communicate with major dealers, not just it’s Authorized Purchasers (APs), to let everyone know when procedures are being abruptly changed or delayed for the typical planned release of new coins.
What happens when there’s a failure to communicate? Retail dealers simply can not effectively promote and sell the Mint’s new products, and face the undeserved wrath of the public for problems the dealers did not create.
Here’s what happened with my company, Universal Coin & Bullion in Beaumont, Texas. We planned for months to promote and sell the eagerly anticipated five-ounce America the Beautiful Silver Bullion Coins™. As we’ve done for over a decade with previous new issues, we obtained commitments from the Mint’s Authorized Purchasers to obtain the coins, but when the Mint prohibited APs from following through with our December orders it set off a costly chain-reaction of customer service nightmares. Anticipating delivery of the promised coins, Universal Coin & Bullion spent over $200,000 to purchase cover advertising space in various publications, including a coveted wrap-around ad in Coin World magazine. Contracts for expensive cover-wrap ads must be reserved, signed for and planned many months in advance. Other major dealers I know — to their detriment — did likewise.
Instead of making our customers happy by delivering their orders for the America the Beautiful coins, our company lost money, lost the confidence and trust of customers, and now we’ve turned to the Royal Canadian Mint to provide more bullion coin choices for our customers even though we want to sell United States Mint products.
Our company lost not only the $200,000 in advertising placement costs, but also thousands of man-hours with our staff handling customer complaints about the failure to deliver the advertised coins — and perhaps lost a million dollars in potential sales of other coins because our staff was busy talking with angry America the Beautiful customers. There’s another high-risk element, too: some customers who unfairly blame Universal and other dealers for the Mint’s failure to deliver filed complaints against those dealers with the media organizations that carried the dealer’s advertising. Some customers threatened to file complaints with the Better Business Bureau and various government agencies because of this issue.
The end result is that instead of planning on sales of future America the Beautiful coins, Universal Coin & Bullion has now started to offer Canadian products, such as the new Wolf and Grizzly Bear silver bullion coins. Communications with the Royal Canadian Mint about their products has become better and more reliable for retailers to plan their advertising. I would love to sell more U.S. Mint products, but we need better communication and reliability to plan advertising around the release of U.S. Mint products. I sent an outline of my concerns and constructive recommendations to some long-time Mint employees I’ve known and respected. They subsequently were forwarded to upper-level Mint management. However, I never received a response from anyone in upper management.
Here are additional, constructive suggestions from dealers who participate in the Mint’s Bulk Program.
Release dates should be spaced farther apart. The Mint is releasing proof Buffalo and proof platinum and gold Eagles within a 35 day period; three big programs in a short amount of time, giving little time for dealers to effectively market and fund the coins.
Dealers involved with the Mint’s Bulk Program also suggest raising the $50,000 credit card order maximum to $100,000, and not put a lengthy, onerous two-to-three week hold on the dealers’ credit cards which limits their ability to do more business.
Here are additional, constructive suggestions from retail dealers who participate in the United States Mint’s Bullion Program:
Dealers need more than ten days’ notice about when new issues will be released. Improve the transparency with 30 to 60 days’ notice so dealers can plan their advertising and marketing.
The Platinum Bullion Program needs to be consistently released in the same quarter each year.
We’re already in the second quarter of 2011, but dealers and collectors still don’t yet know when 2010-dated America the Beautiful special collector versions will be available, how they will be sold and why they were even made.
One more important action for the United States Mint to promptly consider: It’s website listing of National and Local American Eagle and American Buffalo gold coin program retailers contains many incorrect placements. Some of the nation’s largest dealers, such as Universal and one of our big Texas colleagues, Heritage Auctions, are mistakenly listed as "Local" when they should be "National." Many smaller, local and regional dealerships are incorrectly listed by the Mint as "National." Some of these problems were pointed out to the Mint months ago, but their website listing has not yet changed. Apparently, there appears to be a failure to communicate and a paralysis to act by upper level Mint management on even simple issues like this.
I welcome the opportunity to once again constructively work with the decision-makers at the United States Mint.