Using Junk SIlver (pre-1965 US Coins) or Silver Rounds In Trade
Written by Eric VoughtThursday, 03 September 2009 19:46 - Last Updated Sunday, 13 December 2009 05:16
Silver rounds minted by others which contain one ounce of .999 fine silver can be traded asequivalent to Silver American Eagles--- with a significant exception in how taxes must be dealtwith. It is probably a good idea for merchants to offer a slight premium for the silver coins above their"trade value". This will encourage people to actively use the coins rather than just trading themin or hoarding them.
Small Purchases and Odd Amounts
The different denominations of pre-1965 coins make small purchases easier, but a silver dime isstill worth $1.40 FRN. This can be a serious problem if the value of the silver increasesmarkedly as expected; What do we do if a silver dime is worth $9.80? How do you make smallpurchases (or avoid rounding off large purchases)? There are two useful approaches: 1. Add enough modern currency to make the difference. If I make a nominal $2 purchasewith silver coinage having a market or agreed value of $1.40, then I add $0.60 in moderncoinage to the deal. (Don't forget sales tax!)2. Keep a running tab. This works best with repeat customers. When they pay using silvercoins valued at $10.00 for a $7.40 purchase, record a store credit of $2.60 (or perhaps $0.21 insilver currency). The customer can use that balance on their next purchase. This was done allthe time in the days when silver and gold coins were regularly used. A customer canintentionally "open a tab" by paying an amount of silver coins which they can then use a bit at atime whenever they purchase.My understanding is that amounts "on tab" are not realized as "income" until actually spent bythe customer. Until that point, they are a
: a debt owed to the customer.
How Do You Keep From Mixing Them Up?
Because many of these coins look and feel roughly like modern coins, it can be easy to mixthem up accidentally, in a pocket or change drawer. It is embarrassing to give someone a silverquarter in place of a modern $0.25 piece or use one in a machine. One way to do it is to put your silver coinage in small plastic coin sleeves/envelopes. These areinexpensive and make it harder to confuse. Of course you will still need to look at coins you
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