The End of Circulating $1 Coin Direct Ship Program?

Late last week, the United States Mint quietly removed references to the Circulating $1 Coin Direct Ship Program from their website and marked the associated product listings as “sold out.”

The US Mint’s main page about the Presidential $1 Coin Program used to include a link to a page with information about the Direct Ship Program. The link has been removed, although the destination page is still active. (See below, before and after.) A link was also previously included within the main navigation of the product catalog section of the website. This link was also removed. Until late last week, the US Mint had listed 2011 Native American Dollar Direct Ship Rolls and James Madison Dollar Direct Ship Rolls. These were marked as sold out.

The Direct Ship Program had been introduced in June 2008 under US Mint Director Edmund Moy. The program was created in order to proactively comply with the requirement of the Presidential $1 Coin Act to remove barriers and improve circulation of the $1 coin. Under the program, individuals or businesses could order $250 boxes of $1 coins directly from the US Mint at face value with no charge for shipping. Although well intentioned, some people started to abuse the program.

In late 2009, mainstream publications reported how some individuals had used the program to earn miles or rewards on their credit cards. The coins would be ordered at face value in large quantity and subsequently deposited directly into a bank account. One individual claimed to have bought $800,000 worth of coins through the program. The US Mint attempted various tactics to curb the abuses, but every few months there would be more stories about people taking advantage of the program.

In July 2012, the US Mint finally announced that credit cards would no longer be accepted for purchases through the program, which should have essentially ended all abuses. In November 2011, a $12.50 fulfillment fee was added to the program. This fee created a deterrent to anyone actually seeking to use the program to purchase coins for the purpose of spending them at face value.

The latest data available indicated that the US Mint had distributed 244 million $1 coins through the Direct Ship Program through June 1, 2011. A survey conducted by the Federal Reserve Banks estimated that about 60% of these were eventually deposited at Reserve Banks, contributing to the hoard of more than 1.25 billion $1 coins in storage.

At this point, I do not have confirmation as to whether the Direct Ship Program has been officially ended, or if it is suspended, or if it will be relaunched under different rules. It would not be too surprising if the program had been ended, given its checkered history. If the US Mint had acted sooner to curb abuses, the program may have had a better chance.

Going forward, collectors will have some new bulk options for purchasing $1 coins. Within the Federal Register, the US Mint published prices for 100-coin bags ($111.95), 250-coin boxes ($275.95), and 500-coin boxes ($550.95).

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Comments

  1. Mike says

    This was a GREAT idea by the Mint, but people took advantage and now it is gone. Most of us did the right thing by the Mint, but as usual the bad apples ruined it for all of us.

  2. J A says

    As to the fools that rang up mileage on their credit cards and all others who took advantage of this system, I hope you’re happy.

    I agree that this was a great idea for collectors. I ordered about $5,000 in presidential coins over the year from the DS program and faithfully spent them around town as was the intended purpose.

    This reminds me of a company I worked for that had an unlimited sick time policy. Well before you knew it, people were calling in sick to extend their weekends and just to hang out at home all too often. The policy was cancelled and the rest of us who followed the rules then had to pay the price.

  3. DCDave says

    Either the $1 bill OR the coin, PLEASE decide.
    Both will not work at the same time. Never has, never will.

  4. Brad says

    I wonder if all the people I used to tip with shiny new “golden” dollars and the guy who collects the money from the vending machines here at work will wonder what happened? I’ve already been missing being able to spend these things, but I was pretty much cut off after credit cards were no longer an option for the Direct Ship program. I definitely wasn’t going to spend $12.50 per box extra, either. My last avenue for getting a spending supply of the coins was at my bank, but now that no new issues will be put in circulation, I guess it’s over.

  5. merryxmasmrscrooge says

    my buddy works as an installer and repairman of vending machines stereo systems, and video games in hotels, restaurants, bars, amusement parks, game rooms, laundromats, and malls. he said his company is working on modifying the machines to take the $1 coins. they are making the change machines so you can put in a $10 and get 10 $1 coins instead of a bunch of quarters.

  6. says

    I think everyone saw this coming from a mile away when they changed the terms of the direct ship program to have an additional charge. I am a bit surprised it took them so long to be honest. I figured the creation of the bulk ordering options was meant to help shift people away from direct ship.

    I am also unsurprised at how the coins ended up back in the banks. Even if people spent them, businesses would eventually just take them to the banks and dump them. No local business in my area, excepting government run transportation, has ever give me a $1 coin in change.

  7. unlimited sick leave? says

    Interesting that a private company would have unlimited sick leave. In the federal gov’t no matter how many years you work, you can never get more than 4 hours every two weeks and if you don’t use what you accumulate by the end of the year, it is forfeited.

    Disappointing news on the direct ship program.

    This reminds of social security disability, which has been so abused by some people, that people who have legitimate serious disabilities are not approved and need a lawyer to submit a second application, and then they take the legal fees from a very limited disability check, making it hardly worth it in many cases. My doctor told me that he has blind patients who can’t get approved.

  8. Ed says

    Mike, I noticed info on the Mint’s website showing the upcoming Pres. Arthur coins but there is no ordering info on bulk offerings. Will the mint eventually add these options or ?????.

  9. ClevelandRocks says

    How long will the Mint continue to sell 5oz numismatic coins at only $7/oz over spot?

  10. KC says

    Just got my second Olympic ATB-P coin. It is very beutiful and quality is better. If the current price stays till chickasaw coming online, I will be buying more. When the silver price dips I will buy more of the ASE bullion as hedge.

  11. ClevelandRocks says

    I think Michael explained before that the Mint can’t sell numismatics PM products as they approach bullion prices, but don’t know the details.

    What is your favorite coin that you like to look at the most?
    I like the Indian gold Eagle, 1857 flying cent, 1921 Peace dollar, Julia Tyler gold proof, 2006 gold rev. proof and the ’09 UHR. My favorite ATB is Hot Springs ms69 bullion version, the Mt. Hood also very nice.

  12. Binary Vixen says

    Once again, the few spoil it for the many. Seems to be a recurring theme today in our society.

  13. says

    Very dissapointing. I actually was on the US mint website this weekend looking to buy a box. I guess it was good while it lasted. We used to keep a roll in the car for buying morning coffee.

  14. Louis Golino says

    Maybe all these changes will get more people excited about collecting dollar coins. Like many I told myself I would not collect them, but later I got an album and did just that. But I think I only have two rolls of them.

  15. mqracing says

    I went into full hoarding mode with the direct ship dollar coins. wound up getting 48 boxes. Never used airline miles— nor cared too. I liked them just because they were easy to stash and you could get them at face value. I’ll admit I haven’t circulated them but nor did I turn them in at my bank. They are still sitting in the bottom of the lake after a boating accident :=)

  16. Shutter says

    In late 2009, mainstream publications reported how some individuals had used the program to earn miles or rewards on their credit cards.

    The business about the credit card reward program is entirely beside the point. So what if someone made a few bucks of their credit card? IT doesn’t cost the mint any more or less in credit card discount whether you get reward points or not. Also some of the most lucrative reward programs have an annual benefit maximum.

    The coins would be ordered at face value in large quantity and subsequently deposited directly into a bank account. One individual claimed to have bought $800,000 worth of coins through the program.

    Obviously no one could deposit that many coins in one go. For one thing, the banks are required to file a CTR with the government for cash transactions over $10,000 and anything over a few hundred $$ in rolls would trigger the bank to file an SAR. For another, $800,000 would weigh over 6 tonnes. So this guy wold have to spread his deposits over number of banks and days to a point that it would be an almost full time job. Anyone who can live on 2-3% of $800,000 should be pitied, not envied.

    While there were probably many relatively small abuses, the $800,000 story was probably invented out of thin air by a Stephen Glass or Jayson Blair type and swallowed whole by others and then blown out of way out of proportion by Crane & Co. shills.

  17. Shutter says

    Michael,

    I was not accusing you of lying. However, a report claims to have read something on an anonymous site and then it becomes a fact? But let’s just take Mr Mccartney and “Mr Pickles” at their word. Some guy pulls into a bank with half a tonne of coins and no one asks questions or files reports? Really?

    But here is the kicker. Mr Pickles claims that his $800,000 helped him earn “lifetime platinum-elite status” on American Airlines using multiple credit cards. Three problems with that. (1) There is no such thing on AA. You have to earn that status every year. (2) You can’t earn such status by using credit cards points. You have to actually get into a plane and fly an awful lot paying actual money for tickets and/or upgrades. (3) Multiple credit cards? It’s true that Citi offers several credit cards tied to AA. But it’s just one bank, and they do keep track of that kind of activity and they do report anything like that.

    But wait, you say, he posted pictures. Pictures!!! No one would ever doctor a picture. Let’s see. He didn’t merely get $800,000 in coins over 2-3 years, but all at once. Or he tied up $800,000 over a period of time, just so he could photograph all the coins together and brag on an anonymous site. Because that’s what people with a spare $800,000 in cash do: scrounge for frequent flyer miles. You wouldn’t be interested in buying a bridge would you?

  18. Aimee says

    That’s a very thought provoking response shutter, it seems you may have put more effort in your response than the journalists over at the Wall Street Journal lol. I must say I’m certainly NOT surprised since that wouldn’t be all that difficult of a feat 🙂

  19. Shutter says

    Better men than I have observed that “Everybody lies”. They may lie about different things and for different reasons, but they all lie. Once you realize that, a healthy dose of skepticism is always in order. Also they don’t teach about how banks work in journalism schools.

    What surprises me, is that here more than a few people have had dealt quiet a bit with bank tellers and the mint, yet take utter nonsense completely on faith.

  20. simon says

    Embellishment is a fine art but simple math uncovers the fine details. The math is as follows : $800k at $25 a roll is 32,000 rolls or a 3,200 boxes of 10 rolls each. Say orders were placed over 3 years. So we have 1,067 boxes per year or about 21 boxes of ten rolls ( ~ $ 5k ) per week. A highly motivated profiteer could certainly muster the energy to take care of something like this. If said pioneering individual had say 4 different credit cards and dealt with 4 different banks he/she would deal with the offensive offloading scenario just once a month at each bank. Voila – it is possible!

  21. says

    Simon,

    I agree. I know someone who has exactly this kind of mindset. It may seem stupid to us, but there are really people who think like this. I know one of them!

  22. says

    Jon,

    Given that the Mint so far has declined twice to suspend silver even at $34, I expect that as long as we don’t pass $35, there’s a chance we might get Chickasaw at the $204.95 level.

    Needless to say, if that is the case, I will buy the second it goes on sale at noon.

  23. Shutter says

    simon,

    Assuming he had been ordering 21 boxes each and every week for 3 years, without the mint noticing, he couldn’t have been depositing them weekly until reaching the $800,000. He claims to have photographed them all at once. Meaning that he tied up that much money for the purpose of bragging to a bunch of strangers and creating evidence. Granted that 2008 and early months of 2009 were a good time to keep your assets in cash, but really?

    But let’s put aside his self-incriminating obsession. This guy, Mr Pickles, deposits 4-5 boxes of mint-fresh coins at the same bank each and every week for three years and no one files an SAR? Again, really?

    Not every problem can be solved by a calculator.

  24. DCDave says

    They must have a bunch of 2011 ATB sitting in a warehouse. Hope they weren’t foolish enough to produce the full 35K of each…
    Wondering when the sales report will be in for this past week?

  25. SDP says

    Anybody scooping up 2011 W ASE from the Mint in any abundance at these prices given the spot price of silver?

  26. Shutter says

    simon,

    Almost forgot. In between his weekly adventures with bank tellers, he must occasionally take to the friendly skies. Otherwise why would he bother with AA frequent miles status. Also he may have 4 different cards (or even more), but only City has cards tied to AA. Sometime during this adventure Citi would have noticed even if he used 4 different Citi cards.

  27. Michael in Bama says

    It would be my guess that a big CRANE flew in the window and dropped this story in the reporters lap!

  28. Shutter says

    CaptainOverkill,

    That’s the whole point. Lot’s of people were encouraged to participate in DirectShip by credit card benefits. I was. Getting $5 back on every $250 in coins was nice. Most of those people did not abuse the program either. I spent every single one of those coins, just like the government wanted me to. I didn’t even bother collecting any of those coins. There were some abuses, but at most, they were on a scale of a few thousand over the four years.

    The problem with the program wasn’t all the abuses. The problem was that it couldn’t work. After I spent the coins, they didn’t enter the circulation. They were taken to the bank by the merchants. The bank re-rolled them and sent them back to the Fed. You can’t blame the banks either. They were getting these coins from the merchants, plus they kept getting fresh rolls every few months also.

    As long as paper $1 bills were around, store clerks used them to make change and sent the coins back. When the fed stops printing paper, there will be a demand for coins.

  29. simon says

    Mr. Pickles had fun cooking up his queue-cumber, and I had fun decoding its recipe and ingredients. I stand by my analysis – It’s all about enjoying life, and its little oddities. Let’s laugh, be merry, and collect coins…!

  30. Two Cents says

    I have a question. The Mint is required by law to provide the dollar coins to the different Federal Reserve banks, which order the coins for their member banks, which order them for their customers.

    But, it has been pointed out that businesses don’t like the dollar coins, and the public doesn’t want to use them, so the coins are brought back to the banks. The banks, in turn, don’t want to keep the coins in their vaults and return the coins to the Federal Reserve, where the coins collect dust.

    Then the cycle repeats itself with every new issue (5x a year).

    My questions is: If no one wants the dollars in circulation — businesses, the public, the banks — why do the banks continue to order the coins with every issue, every year, by the millions?

    If the banks didn’t order the coins, the Federal Reserve wouldn’t order them from the Mint, who then wouldn’t be minting so many to provide the coins. Am I unaware of something else that is going on?

    And, why … ok, this is another question … why does the Federal Reserve not send out the returned dollars to fulfill future orders? It would seem imprudent to order more coins from the Mint when they already have more than sufficient quantities on hand. One of the Federal Reserve’s duties is to regulate the supply of coinage in circulation, and yet it continues this practice of ordering more dollar coins than is necessary and stockpiling the oversupply. The Federal Reserve recirculates the Kennedy half dollars, so why not the small-size dollars?

    And, why don’t the banks who order the coins in the first place, keep the returned coins and recirculate them as needed, instead of shipping them off to the Federal Reserve, only to order more later on?

    It would seem that the fault with the whole mess of any overabundance of dollar coins can be laid at the steps of the banks that order the coins unnecessarily, and the Federal Reserve that fail to regulate the supply. Recirculating the coins within the banking system would appear to be the best solution to the problem – at least until Congress does away with the paper dollar.

    But again, there may be something that I’m missing. Is something else going on that I am unaware of?

  31. Matt L. Detectre says

    Collectors of the mint issue 5 oz ATB might get lucky for a while as one commenter way above observed. The mint is probably unloading these at a record pace now that silver is goin’ up and their price isn’t. They may be reluctant to increase prices on the 5 ozers. while these are flyin’ out the door. Lets see what mint sales show to see if they are “flyin’ out the door.”

  32. Shutter says

    why does the Federal Reserve not send out the returned dollars to fulfill future orders?

    That’s easy. “The Presidential $1 Coin Program is the only circulating commemorative coin program to have statutorily mandated introductory periods in which Reserve Banks are required to make specific designs available in unmixed quantities”.

    One thing you need to understand is that the Congress insists on micromanaging this. That’s why this year the program will have 3 presidents on 4 different coins and 1st spouse program will have 2 1sr ladies on 3 coins plus another woman who was never married to anyone. And then next year, we’ll have 5 1st ladies to go with 4 presidents.

  33. Brad says

    It’s possible the prices on the numismatic ATB 5 oz. coins won’t be raised for a while, unless silver gets so high that the metal value actually exceeds the sales price (which would happen at $41/oz.). I think at that time the Mint would be forced to raise the price, if for no other reason than the AP’s crying “foul” that the Mint is underselling them and effectively stealing buyers who would otherwise buy the bullion versions from them. Who WOULDN’T buy collectible silver coins at NO MARKUP?

    I’ll bet the Mint will hold off on an increase as long as they can so they can move as many out the door as possible. Everyone likes to get a perceived bargain, and the more narrow the gap gets the faster these will sell.

    Since the upcoming Chickasaw coin still mentions the 35,000 mintage limit, I’m thinking the Mint very well may have struck all five of the 2011’s at that level. In hindsight it’s too high, but the coins used to sell a lot faster. It seems like if the Mint already KNEW that it would be impossible to fulfill orders for 35,000 coins, the actual number struck would be referenced. Since the coins are being put on sale after it’s too late to strike any more, it would make sense not to state a limit that doesn’t exist.

  34. Wylson says

    I doubt the last 3 P pucks were struck to 35K. I wouldn’t be surprised they go dark at about 2/3rds the mintage limit. There quit away from 2/3rds yet. Shows how demand for these has fallen in the crapper.

    Disclaimer: I still kinda like ’em

  35. says

    You guys can still go to your bank and order $1000 boxes of the one dollar coins. You might get lucky with an uncirculated box or you might get a circulated box but you CAN STILL GET THE COINS FROM YOUR BANK.

  36. J A says

    Mike, I take it you mean you can get existing and previous presidential coins. You don’t mean that the banks will carry the future Presidents, do you?

  37. Brad says

    The way I understand it, the banks will not carry any new designs until the Mint begins striking the Presidential Dollars for circulation again. So, any dollar coins that would be sent to the banks from the Fed for now will be James Garfield or prior designs.

  38. says

    J. A. they will be from 2011 or earlier. None of the new releases. But you have to remember they have over a billion that haven’t even been circulated yet. At the current rate they are being used supplies are supposed to last for the next ten years.

  39. Kenneth Homyak says

    idots stop printing paper dollars also stop making pennies you can save that way then people will have to use the dollar coin

  40. Jeff Handshaw says

    Aren’t they now failing to:”comply with the requirement of the Presidential $1 Coin Act to remove barriers and improve circulation of the $1 coin”? I would certainly call a fulfillment fee a barrier for most of us to buy and circulate these coins…in fact their actions have functionally deterred the circulation of these coins now that you can’t even get them at the bank…so unless you plan on profiting on these (by selling them on e-bay to cover the fulfillment fee), now, circulation will be the exception.
    Why not simply have limited an order to ONE item type per credit card per release, and only offer each release in counts of 100, problem solved…IDIOTS

  41. Gail says

    Well this just sucks. All they had to do was just stop excepting credit cards and that wouldn’t solved the problem. Thanks idiots who abuse the system

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