How To Make Money By Arbitraging Coins Bought At US Mint (Guaranteed Profit)

Here is a simple way to make a guaranteed profit.  Several times a year, the US Mint releases coins that are sought after by collectors. In case you are not familiar, the US Mint is the government agency tasked with manufacturing and distributing precious metal and collectible coins, and national medals.

Anyone can visit the US Mint website and buy these coins. To prevent collectors from hoarding these coins, the US Mint puts a limit on how many coins one individual can buy. This means that the collectors cannot buy the quantity they need by themselves. They can either buy it from individuals who purchased the coins from the US Mint or they can buy it from a  broker such as PFS Buyer’s Club.

How the deal works

Before you make the coin purchase at the US Mint website, you can go to the PFS website to “opt-in”. By opting in, you are committing to sell your coins to PFS at a pre-determined price. Your profit is the difference between the price at which you buy the coins from the Mint and the price you sell them to PFS. In addition, you can get rewards points from your credit card.

PFS will send you an envelope to send your coins. PFS will pay for shipping + insurance. In case your coins get lost, you will get paid as long as you have proof that you shipped the item.

What is PFS Buyers Club? How does it make money?

PFS Buyers Club is a broker that has relationships with large coin buyers. PFS offers to buy the coins from you at a certain price and sells them to the collectors at a higher price. They make money on the spread between the price they buy and the price they sell.

One word of caution. If you opt-in to sell your coins to PFS, follow through on your commitment. Otherwise, you risk the chance of getting blacklisted at PFS, which will prevent you from selling coins to PFS in the future.

You can do better but involves risk

PFS is the safest option because they guarantee you a price even before you buy the coin from the US Mint. But PFS makes money by buying the coins from you and selling them to their members. So there is an opportunity for you to do better.

There are a number of other coin dealers that will buy coins.  Call them and check if you can get a better price. In most cases, these places will only buy the coin after you have them in your hands. In case the coin dealers don’t buy the coins for the price you paid, you may be looking at a loss. So there is risk involved here. But you also have the opportunity to make more than what PFS offers you.

Example

In May 2021, the US Mint announced the sale of two coins

Morgan 2021 Silver Dollar with CC Privy Mark – $85 per coin, 10 coins max per individual (investment – $850) + $4.95 shipping
Morgan 2021 Silver Dollar with O Privy Mark, $85 per coin, 10 coins max per individual (investment – $850) + $4.95 shipping

PFS had an offer to buy 10 coins for $1,000 – that’s a profit of $145.05 for each coin set or $290 for both coin sets. On top of that, I get 2% cash back on $1700 spend – that’s another $34. So I am looking at a potential $324 profit from this deal.

How to track deals

Even if you have no intention of selling your coins to PFS, sign up for their membership. It’s free and PFS will send you emails when a good coin deal pops up. The email will contain details on the date of the sale, the price at which Mint sells the coins, the price at which PFS will buy it from you, and your profit. In addition, the email will have detailed instructions on how to purchase the coins at the US Mint website.

PFS typically accepts a limited number of opt-in. So you need to sign up quickly if you are interested in selling to PFS.

Use the right credit card to earn rewards

Major credit cards code purchases from the US Mint differently. For example, American Express codes them as cash advances which will incur fees and will not earn you any rewards points. Similarly, all U.S. Bank and Elan credit cards do not earn reward points on US Mint purchases.

I use the Citi Double Cash Card, which gives me 2% cashback. In my experience, all Chase, Citi, Barclay, Capital One credit cards will give you reward points or miles.

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