Today, the United States Mint announced the America the Beautiful Quarters Bulk Purchase Program. At first, I was pretty excited about the announcement, until I read that the bulk purchases must be made in increments of $50,000. Even though most collectors will not be able to purchase through the program, it will still have an impact on anyone collecting the series.
As I have mentioned in prior posts, circulating coins are generally distributed to the channels of circulation through the Federal Reserve Banks. They supply coins to banks and other depository institutions in quantities sufficient to meet transactional demand without regard to the date or design of the coins.
For the 50 State Quarters Program and the Presidential Dollars Program, special ordering procedures were provided, which allowed banks to order unmixed quantities of the newly issued coins for certain periods surrounding the circulation release date. Special ordering procedures were not put into place for the new America the Beautiful Quarters Program.
Although some of the newly issued quarters eventually make their way into circulation, the lack of ability for banks to order the new issues specifically makes distribution spotty and uncertain, as compared to the State Quarters.
The Bulk Purchase Program provides for the purchase of bulk bags containing 200,000 coins, with a face value of $50,000. There is a processing fee of 3% or $1,500 for each order. Purchasers must also arrange pick up of the coins from the Philadelphia Mint (P mint mark coins) or Denver Mint (D mint mark coins) by a licensed commercial carrier.
Orders for upcoming America the Beautiful Quarters can be processed up to one week before the circulation release date. Interestingly, previous releases of the series will be accepted as long as unassigned inventory exists. The US Mint includes the following within the Q&A section:
“Orders for previously released coins will be accepted as long as unassigned inventory exists. The United States Mint may produce additional coins to satisfy orders throughout the year for the first few designs if time and resources permit; however, there is no guarantee, and orders may be refused. As the end of the calendar year approaches, flexibility in supplying previously released quarters diminishes.”
This explains why the US Mint’s monthly production statistics indicate that the figures for America the Beautiful Quarters are “preliminary” with several asterisks. In the past, the US Mint has stopped production of one rotating circulating coin design before beginning production of the next. Apparently, now the US Mint may continue minting all designs during year of issue.
Because of the high minimum purchase requirements and pick up arrangements, it’s unlikely that the average individual coin collector will be able to use the program to obtain new coins. The US Mint suggests that smaller quantities should be purchased through the two roll sets ($20 face value for $32.95) or the 100-coin bags ($25 face value for $35.95).
The Bulk Purchase Program will likely have some indirect impacts to the average collector. It may create a more abundant supply of each quarter on the secondary market if dealers purchase the coins in bulk quantities. In the short term, this should make acquiring the coins easier, but in the long term it may hold down the values of low mintage coins. Rather than distributing a small mintage broadly, many coins will be in the hands of collectors through the numismatic bags and rolls offerings and potential hoards will be in the hands of dealers and others through the bulk purchase program.
Studying production figures for low mintage coins will become a more difficult task. Since production for each coin can take place throughout the entire year of issue (if time and resources permit), any coins with low preliminary production figures might be ordered in quantity through the bulk purchase program, increasing mintages and creating hoards.