Should I buy coins from the post office? How to get fooled by fancy boxes.

Looking to buy gold or silver coins from the Post?

Coming up on Christmas, these make great gifts. If you are walking to the post office to buy coins, there are a few things to keep in mind.

Take the advice of The Spruce’s James Bucki, who knows a thing or two about the inner workings of the coin market - you’re buying these because you like them, so be sure you do.

Pro: normally you’re buying something a lot more aesthetically pleasing.

Con: normally, you’re paying anywhere from 2x to 5x more.

The real hurdle to buying post office coins is the price. Be they Royal Canadian Mint, or from another mint, they are tremendously more expensive.

Not a fan of Sockeyed Salmon? Then don’t invest in coins engraved with salmon.

The same goes for any other collectable coin. If it commemorates something you wouldn’t think twice about, avoid it. If you buy coins from the post office, you’re buying collectible coins.

Bucki also advises educating yourself on the marketplace, and this is where the question of whether you should buy coins from the post office comes in.

So what exactly are we paying for at the post?

The big factors include things like packaging.  You are essentially paying for the gift box as much as the gift. The aesthetics is another. First, you have to factor in the cost of designing and producing these more expensive products. Second, limited edition sets are more expensive to produce, per coin.

Below are a few key reasons for why Canada Post so often charges at least double market price for silver and gold coinage. Keep Mr. Bucki’s advice in mind while running through these reasons. Perhaps they will convince you to invest at the Post. Probably, they won’t.

Rarity.

Rarity is a common factor in coin investment that will push price up because demand is greater. In some instances, rarity plays an important role in the pricing of Canada Post coins. Consider that the gold coin mentioned above (going for $2,888) is one of only 588 in existence.

This point does not hold weight (excuse the pun) for the silver coin, however, which is one of 5,500. It’s worth noting that these are one-of-a-kind designs for each year, thus contributing to the added price at sale.

Design.

The Canada Post purchases and curates coin manufacture with the Canadian Mint. That’s not a bad place to be as a coin dealer.

A strong and enduring professional relationship between these two institutions of government allows the Post to sell immaculately designed coins. The cost of the manufacture and numismatic value contribute another added cost at sale.

Declining Revenues.

The Post is losing a fair bit of pre-existing revenue as the shipping market continues to evolve. A financial report covering 2011-2015 from Canada Post confirmed that profits were down in all key areas of mail distribution, except for segment parcels (the impact of e-commerce).

In conjunction with several other cost cutting endeavours, it’s clear the Post is looking to make as much money as they can from their merchandise – even if it means gouging the price of silver and gold coins.

How to buy coins from the post office and still pay less?

If you want to pay less for post office coins, consider buying second-hand post-office coins such as from the Royal Canadian Mint. Beyond your local coin dealer, you might look online to eBay stores.

While you might not be getting the newest shiniest coins, you’re getting significantly higher value. Bullion is an alternative to buying coins from the post office. Contrary to what perpetual market bulls tell you, there are a lot of long-term bullion investors.

When Global Bullion looked into whether Royal Canadian Mint coins are a good investment, the key difference between investors and collectors came to motives. Investors are much more focused on the intrinsic value of their purchases. They want to buy gold and silver coins cheap.

For them, precious metals are in fact a safe haven for investment against inflation.

What kind of coins should I buy from the post office or elsewhere?

The main question you’ll face is what kind of coin to buy, and that involves research. If you don’t know of any alternatives to buy coins from the post office, you’re probably missing out on some great pieces. For that matter, you’ll be shocked to find the price difference between Canada Post coins and those sold by Canadian bullion dealers.

Here is a breakdown, starting with gold coins:

- Canada Post: A 0.9 oz. 99.99% Gold Coin for CAD $2,888.88. - Canada Online Dealer: A 1.0 oz. 99.99% Gold Coin for CAD $1684.95 at time of writing. More than a $1,200 difference. It’s strange since both the Canada Post and dealers sell tax free and Global Bullion often offers free shipping.

What about silver coins?

- Canada Post: A 0.75 oz. 99.99% Silver Coin, 99.99% for CAD $159.95. - Bullion Supplier: A 1.0 oz. 99.99% Silver Coin for CAD $24.30 at time of writing. That’s roughly $125 more or nearly 5 x as much... There is very little reason to buy coins from the Post Office if you’re not a fan of specially designed premium coinage. Recall Mr. Bucki’s advice and research gold and silver bullion dealers in Canada that keep their prices at or near the metal’s intrinsic value.