What should I check before buying a coin shop or bullion dealer?

A coin shop or bullion dealer holds stock that can change in value from one day to the next, and customers trust it with things they cannot easily replace. Start with the stock, then the places it is kept, then the people and accounts that keep the business running.

Counting stock that moves with the market

Agree early how inventory will be counted at closing and against what reference. Bullion is easy to weigh but changes in value daily, so the contract should say which day’s quote applies. Collector pieces need a different method. Ask for the purchase records, and ask your accountant how the stock should be carried in the books. Our page on what to check before buying a pawn shop raises similar points.

Authentication, grading and provenance

For coins and stamps, find out who authenticated and graded each piece, and whether certificates come with them. Ask where items came from and whether any are held for other people. A buyer who cannot tell customer property from shop stock may find out too late. Consider an independent appraiser for the more valuable items.

Security, insurance and accounts

• Safe, vault and alarm arrangements, and who holds the keys and codes
• Insurance for stock on site and in transit, and what it excludes
• Refiner, wholesaler and supplier accounts, and whether they carry over
• Which collectors and wholesale contacts deal with the owner personally

Ask a lawyer what compliance duties apply to a dealer in precious metals and whether the shop has met them.