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cus­tomers, but if they see de­mand in the in­dus­try for cer­tain coins and medal­lions, then they will re­pur­chase the coins from the client.

Clearly there is lit­tle in­ter­est in Lizo’s 1/10oz Robben Is­land coins.

Van Ker­ck­hoven also con­tends that “we pro­vide a high stan­dard of train­ing to all our con­sul­tants so that they are equipped with the right knowl­edge to guide our cus­tomers, which is nei­ther mis­lead­ing nor mis­trust­ing in any man­ner”.

John Keogh, a coin dealer with 35 years’ ex­pe­ri­ence and founder mem­ber of the Coin Deal­ers’ As­so­ci­a­tion, dis­agrees.

“One of the roles of the Coin Deal­ers’ As­so­ci­a­tion has been to ed­u­cate the pub­lic so they do not get caught up in false pro­mo­tions,” says Keogh, who adds that coin col­lect­ing is a spe­cialised in­dus­try and, as an in­vest­ment class, has made peo­ple sig­nif­i­cant re­turns, but only on rare and col­lectable coins that go back hun­dreds of years.

For ex­am­ple, cur­rently a 1931 com­plete set of South African coins would fetch around R250 000 and Keogh says, as a col­lec­tors’ item, it will in­crease in value due to its rar­ity. Only 130 of th­ese proof sets (sets that have been graded and sealed) were made and only 100 ex­ist to­day, mak­ing them very rare.

The grad­ing process analy­ses the coin for any im­per­fec­tions or dam­age with a max­i­mum of 70 points awarded to the most “pure” coin. “Most cus­tomers, and even deal­ers, could not tell you the grade of a coin by look­ing at it,” says Keogh. Although a grad­ing sys­tem is ben­e­fi­cial for true col­lec­tor items such as the 1931 proof sets, it is of­ten used just as a mar­ket­ing ploy.

The R5 Mandela coin mar­ket­ing scam is a good ex­am­ple. Twenty-two mil­lion R5 coins were is­sued, en­sur­ing they would never carry any rar­ity value, yet peo­ple paid sig­nif­i­cant pre­mi­ums for what Keogh de­scribes as “a piece of plas­tic”.

The newly minted R5 Mandela coins were sent to the US for pack­ag­ing and grad­ing, sealed in plas­tic and then sold as “col­lectable”.

In terms of the gold Mandela coins or other com­mem­o­ra­tive coins such as the Robben Is­land coins pur­chased by Lizo, th­ese were minted in Norway on be­half of The South African Gold Coin Ex­change and the Nel­son Mandela Foun­da­tion and mar­keted through The Scoin Shops. Hun­dreds of them were minted and are only worth the value of the gold they con­tain, in the same way as a Kruger­rand would be val­ued.

“You can cal­cu­late the value by tak­ing the rand price of gold to­day,” says Keogh, but they do not at­tract any pre­mium as a col­lectable.

Lizo is in fact be­ing op­ti­mistic in believing that he would re­ceive even the orig­i­nal R5 000 that he paid for each medal­lion. When he bought the coins in De­cem­ber 2011, the rand gold price was around R13 300/oz, which means a 1/10oz coin would only have been worth R1 330. He sig­nif­i­cantly over­paid for the coins. Cur­rently, the rand gold price is around R18 400/oz, mean­ing the coins would only be worth R1 840 each.

Keogh adds that if a sales­per­son prom­ises to buy back a coin at its orig­i­nal value when you want to sell it, the prom­ise is only en­force­able if it is in writ­ing.

“Rare coins do make money, but you must know what you are do­ing,” con­cludes Keogh.

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