Risk Disclosure

Terms, Conditions, Risks and Considerations

1. Authenticity Risks.

Forgery and counterfeiting are risks associated with the purchase of rare coins. To minimize these risks, it is recommended that investors only buy coins certified by one of the leading independent coin grading services. With the exception of certain uncertified circulated coins, each coin sold by Blanchard has been graded by either the Professional Coin Grading Service ("PCGS") or by Numismatic Guaranty Corporation ("NGC"). Each of these coin grading services is recognized within the coin grading industry for its superior expertise, and each guarantees unequivocally that coins certified by it are authentic. Blanchard relies upon those guarantees in selling coins, and does not independently verify whether certified coins are authentic. Accordingly, Blanchard expressly disclaims any express or implied warranties otherwise attaching to the coins, including that the coins are merchantable.

2. Grading Risks.

The value of a rare coin is highly dependent upon the condition or "grade" of that coin. Since grading is a subjective process, there is risk in acquiring coins whose grades have not been independently certified by one of the leading independent coin grading services. The possibility exists that a coin could be misgraded by one of the independent grading services, and it is possible for such services to assign a different grade to the same coin upon resubmission. The guarantees provided by such services provide protection against misgrading, given the continuing solvency of the services. Blanchard cannot be responsible for any of the services' guarantees or for subsequent changes in their policies and expressly disclaims any express or implied warranties associated with the grades assigned by PCGS and NGC.

3. Blanchard Customer Satisfaction and Delivery Policy.

Blanchard offers a 10-day customer satisfaction policy after receipt of numismatic coins. Carefully inspect and evaluate your coins during this period. If you are displeased with your purchase for any reason whatsoever, you may return your coins to Blanchard within 10 days of receipt, in the same condition in which you received them, for a full refund, including shipping costs. If your order consists of the coins set forth below (hereinafter referred to as "Exchangeable Common Date Coins"), the 10-day customer satisfaction policy permits you to exchange your coins for other coins of the same denomination and grade but does not allow you to return the coins for a refund. Exchangeable Common Date Coins are $1.00, $2.50, $3.00, $5.00, $10.00 and $20.00 gold coins certified as Mint State 66 or lower by PCGS or NGC, as well as uncertified circulated coins. Bullion coins, those that trade at a premium of less than 15% over the value of their underlying precious metals content, are not subject to return or exchange. Sales of all such coins shall be final. Delivery of bullion orders is normally accomplished within two-three weeks from the date of receipt of payment. All bullion orders will be assessed the then current shipping charges. Numismatic coins normally ship within four-six weeks after payment is received. Client agrees that no warranties or guarantees have been given to client regarding any of the precious metals, coins, currency or other numismatic items purchased from Blanchard including but not limited to future value. Client agrees to promptly notify Blanchard’s client relations department in writing if anyone at Blanchard suggests a guarantee of profits or absence of losses, or makes any statement that is inconsistent with or contrary to the terms of this agreement.

4. Volatility.

The coin market is subject to substantial fluctuations including significant and rapid increases and decreases in value from time to time. Investors must be able to assume the risk of such price fluctuations.

5. Investment Performance.

Client acknowledges and agrees that all of client’s transactions with Blanchard shall be for investment or other commercial purposes and not for any personal, family, household or other consumer purposes. During the period in which relatively accurate statistics have been maintained, many rare coins have shown an excellent record as appreciating assets. Blanchard believes that rare coins are excellent long-term investments, but the future is never certain. The past performance of coins is a guide, not a prediction, of future events. Blanchard is always prepared to assist you in selecting coins for your portfolio or collection. You understand, however, that the decision to purchase coins, and which coins to purchase, is ultimately yours alone.

6. Unregulated State of the Rare Coin Market.

The coin market is not subject to some of the forms of governmental regulation applicable to other forms of investment. Conversely, there can be no assurance that, in the future, regulations which materially affect the coin market will not be imposed. At present, there are no restrictions on the ownership of rare coins, and rare coin ownership offers certain tax and privacy advantages. However, there is no guarantee that, in the future, these benefits will not be restricted or totally removed by government regulation. There is no guarantee that the existing electronic coin exchange, which has brought certain benefits to the rare coin market, may not limit or suspend its operations, which could be disruptive to the rare coin market.

7. Bid Price.

Blanchard is a major buyer of rare coins. If you wish to sell your coins in the future, Blanchard encourages you to offer them to Blanchard first, although Blanchard cannot guarantee to make a bid on every coin or that Blanchard's bid will equal or exceed those from other coin dealers. Should Blanchard make a bid on your coins, it is Blanchard's current practice, which is subject to change at its sole discretion, to offer to buy back coins that it commonly sells at Blanchard's current bid price (the price at which it buys back coins sight-unseen from its clients). That bid price is raised or lowered on a daily, even hourly basis, depending upon various market conditions, Blanchard's inventory needs and the price and availability of comparable coins.

8. Economic Forces.

The success of an investment in rare coins is dependent, at least in part, upon extrinsic economic forces including supply, demand, international monetary conditions and inflation or the expectation of inflation. The impact of these forces on the value of coins cannot be predicted with any certainty. No assurance can be given that an investor will be able to sell his or her coins at a price greater than or equal to their acquisition cost. Rare coins are not suitable investments for investors seeking current income.

9. Blanchard Prices.

Because of expenses associated with the acquisition and sale of rare coins, expenses which are not involved in other investment assets, the spreads (the gross margins on selling price) charged by dealers in rare coins are typically higher than those associated with investments such as stocks, bonds and commodity futures contracts. Although higher or lower spreads may exist in certain instances, typically, the spread for relatively common coins sold by Blanchard with no reference to the date of issue is in the range between 8% and 23%, depending on the type, rarity and quality of the coin sold. The spread on coins of significant rarity sold by Blanchard may be in the 29% range, again subject to slightly higher or lower spreads in certain instances. Therefore, rare coins should be considered to be long-term investments with a holding period of at least three (3) to five (5) years. However, there is no guarantee that the holding of a coin, for any period, will result in appreciation. Blanchard’s typical spread on bullion coins (those that trade at a premium of less than 15% over the value of their underlying precious metal content) is approximately 1% to 5%.

10. Arbitration. This Agreement Contains a Binding and Enforceable Pre-Dispute Arbitration Clause.

  • Arbitration is final and binding on the parties.
  • The parties are waiving their right to seek remedies in court, including the right to jury trial.
  • Pre-arbitration discovery is generally more limited than and different from court proceedings.
  • The Arbitrator’s award is not required to include factual findings or legal reasoning and any party’s right to appeal or to seek modification of rulings by the Arbitrator is strictly limited.

Any controversy or claim arising out of or relating to transactions between you and Blanchard and Company, Inc. or any of Blanchard’s present or former officers, directors, agents or employees (collectively “Blanchard”) shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, which arbitration shall be conducted in New Orleans, Louisiana. Judgment upon the award rendered by the Arbitrator may be entered in any court having jurisdiction thereof. By accepting, opening or maintaining any account between you and Blanchard, you agree that all controversies between you and Blanchard which may arise from any account or for any cause whatsoever shall be determined by arbitration. This arbitration provision shall apply to any controversy or claim or issue in any controversy arising from events which occur prior to, on or subsequent to the execution of this arbitration agreement. The award of the Arbitrator shall be final.

This agreement shall be governed by the laws of the State of Louisiana excluding conflict of law principles, but subject to the Arbitration Agreement above. Any legal action or proceeding between client and Blanchard with respect to this agreement shall be brought in the Courts of the State of Louisiana and the Parish of Orleans or in the Federal Eastern District Court of the State of Louisiana. Client and Blanchard hereby accept the jurisdiction of these Courts, and waive all objections including any objection as to venue or based on the grounds of forum non-conveniens.

The parties further agree that any claims brought in connection with this agreement shall be brought in the party’s individual capacity and not as a Class member of any purported Class or representative proceedings. The parties further agree that the arbitration of a client’s claim will be conducted on an individual basis and will not be consolidated with the claim of any other client. The parties further agree that the arbitrator may not preside over any form of representative or class proceeding. Blanchard's liability in any and all claims whether in tort, contract, warranty, or otherwise shall not exceed the amount actually paid by the client for the items in dispute minus the item’s fair market value as of the date of the arbitration commencement. Under no circumstances shall Blanchard be liable to any person or entity for indirect, incidental, additional, punitive, exemplary, or consequential damages as a result of any legal proceedings.

11. The risks and considerations set forth herein are illustrative and not exclusive.

 

(Revised 9/12/14)