Charles Morgan and Hubert Walker of Coin Week published an article March 26, 2016 about the Royal Mint's "nuanced"
interpretation of Legal Tender values of modern commemorative coins. Apparently "100 Pounds" is not exactly equal to "100
Pounds". Here's an excerpt - be sure to read the complete version online and follow the links to the cited material. -Editor
The Royal Mint of the United Kingdom, one of the world’s leading mints and manufacturers of circulating and commemorative coins, has
established a disturbing precedent by actively advising UK banks not to redeem collector coins at face value–despite the fact that the
Royal Mint states in its online product descriptions that collector coins are legal tender in the UK.
It’s a move that troubles industry insiders and the British public, many of whom were unaware that the commemorative coins they’ve
bought over the years have no practical monetary value.
The issue came to prominence at the end of 2015, when the Mint learned of a scheme wherein buyers would order bulk quantities of the
Buckingham Palace £100 commemorative coin only to later redeem them at face value.
According to article published in January 9 by the UK financial website thisismoney.uk, one man purchased 293 of the coins in order to
accrue airline miles on his credit card.
It wasn’t his first time, either. The man, identified only as “James”, said he would “purchase the face value of coins of £20,
£50 and £100 and max out [his] credit card.” Then he would take the coins to a branch of HSBC Bank and redeem them.
This seemed to work, until it didn’t.
For while James was making deposits, the bank was seeking guidance from the Royal Mint on what to do with these precious metal
commemorative coins – coins that, while advertised as “legal tender”, were not intended for circulation.
Fortunately for James (but maybe not so much for his preferred bank branch), he unloaded 210 of the coins before being told that the
remaining 80 would not be accepted.
At the time of this writing, 80 £100 pound commemorative coins, if convertible to circulating money, would have a value of
US$11,303, with an intrinsic value of approximately $2,441.60.
Legal tender has a very specific legal definition, and each issuing country defines its own rules in law. Small denominations are
typically legal tender only up to a certain dollar amount.
... the Royal Mint provides the following guidelines for the maximum legal tender of each of the coin denominations that it strikes:
- £100 – for any amount
- £50 – for any amount
- £20 – for any amount
- £5 (Crown) – for any amount
- £2 – for any amount
- £1 – for any amount
- 50p – for any amount not exceeding £10
- 25p (Crown) – for any amount not exceeding £10
- 20p – for any amount not exceeding £10
- 10p – for any amount not exceeding £5
- 5p – for any amount not exceeding £5
- 2p – for any amount not exceeding 20p
- 1p – for any amount not exceeding 20p
It is interesting to note that the coin denominations of £20, £50 and £100 are all special commemorative issues, and
not struck for general circulation. Yet, according to the Royal Mint, coins in these denominations have unlimited legal tender status.
If 100 Pounds is only "100 Pounds" then clearly these modern commemorative coins are "coins" in name only - thus the
quotes. We numismatists know that, but the public understandably does not. I have little sympathy for schemers who try to game the system
with these credit card rebate ploys - loopholes like that tend to get closed down quickly when the sellers figure out what's going
on. But it's these edge cases that push the boundaries and force the issues out into the open. You can't stamp these
denominations on coins with a "wink wink nudge nudge" and not expect it to come back and haunt you someday. It will be
interesting to see how this plays out in the U.K. and the rest of the world. -Editor
To read the complete article, see:
How The Royal Mint is Attempting to Redefine
“Legal Tender” for Collector Coins (www.coinweek.com/opinion/royal-mint-redefines-legal-tender-coin-collectors/)
Wayne Homren, Editor
The Numismatic Bibliomania Society is a non-profit organization
promoting numismatic literature. See our web site at coinbooks.org.
To submit items for publication in The E-Sylum, write to the Editor
at this address: email@example.com
To subscribe go to: https://my.binhost.com/lists/listinfo/esylum
Copyright © 1998 - 2020 The Numismatic Bibliomania Society (NBS)
All Rights Reserved.
NBS Home Page
Contact the NBS webmaster