Are Obama Coins a Rip-Off?

Do Colorized Obama Coins Have Investment Potential?

Obama Coins
Most Obama coins being sold are unofficial marketing ploys. The Obama coin depicted here was made in a special, private, limited edition of 300 for party supporters. Photo illustration by Christopher Furlong/Getty Images.

Obama Coin Sold on TV

Barack Obama coins were already being sold by TV shopping show coin dealers and small non-governmental mints, even before Obama was elected President of the United States. Colorized coins featuring portraits of him are appealing collectibles because Obama has stirred the emotions of many Americans like no other Presidential candidate in U.S. history probably ever has. The sellers of Obama coins play up the historic and emotional aspects of Obama's success, often marketing these coins as rare, limited edition collectibles that could increase in value over time.

When you mix emotions and investment decisions, your pocketbook is nearly always a loser.

According to nationally known coin expert Scott A. Travers, author of The Coin Collector's Survival Manual, "These coins are absolutely terrible investments. The value of these coins is what you can spend them for today. And the value of these coins for the foreseeable future will still be the face value — what you can spend them for. Do not buy these coins as anything other than souvenirs."

Obama Coins as an Investment

Travers goes on to warn, "We know that a consumer buys these items as an investment when he or she purchases very high numbers of them. There is a reasonable assumption that if a consumer places an order for 300 or 500 of these items that future profit potential has motivated the purchase. There is little or no profit expectation in the mind of the consumer if a small number are purchased.

Small quantity purchases are often for family and friends. I recommend never purchasing these coins as an investment or in the hopes of making money."

Obama Coins Made From Presidential Dollars

One of the most heavily marketed types of Obama coins are the Obama Inaugural Dollars. The ads for these coins have slick TV and Web videos showing emotion-laden footage of Obama walking among crowds of ordinary Americans, and speaking to flag-waving crowds.

One ad claims that you can "own a piece of American History" and then goes to incorrectly identify a normal, circulating Presidential Dollar as a "Presidential Inaugural Dollar." These Obama coins are being sold for prices ranging from $9.95 plus shipping (total: $14.90) to nearly $30 each, and all they really are is defaced Presidential Dollars that you can get for $1 at the bank!

Most of the Obama coins which use a Presidential Dollar for the host coin are colorized through the application of a decal, which is permanently fused to the coin's surface using a hot glue process. In doing so, these marketers are wiping out the faces of our nation's Founding Fathers and placing their garish colorized designs on our U.S. legal tender coinage. The result is a coin that is numismatically worthless; in other words, these colorized Obama coins will never have any value to coin collectors as collectible Presidential Dollars because the original surfaces of the coins have been destroyed by the colorization process.

State Quarters Also Become Obama Coins

The private mints who create these "collectible" Obama coins are also defacing State Quarters by colorizing them. Although many colorized State Quarters are made using the decal process, some of these Obama coins are being created by employing a somewhat higher-quality process - using multiple layers of a polymer-based ink, to coat the coins with a portrait of Obama.

In one version being sold on TV, the Illinois State Quarter's portrait of George Washington is being replaced by one of Barack Obama. The Illinois Quarter features a young Abraham Lincoln on the tails side of the coin, resulting in a coin with Obama on one side and Lincoln on the other. Now there's a combination to stir the emotions of any patriotic American!

There is certainly nothing wrong with buying colorized Obama coins as souvenirs if you think they are attractive and worth the money. But buy them with realistic expectations, keeping in mind that millions of them might be being produced, and that they are not at all likely to increase in value over what you paid for them. Just because Obama's election to the presidency is historic, that doesn't make every single collectible coin someone is hawking equally historic.

The State Quarter Obama coins are selling for $9.95 on up to $14.95 for a version with Joe Biden and Obama together. The Quarter that the colorized design is printed on is worth $0.25 (assuming someone would accept it in commerce in its mutilated condition).

U.S. Mint and PNG Warn Against Obama Coins

A few weeks after I published this, both the U.S. Mint and the Professional Numismatists Guild (PNG) also issued warnings about Obama coins, cautioning that they should not be viewed as rare coins or an investment, but only as a souvenir item. You should also read the U.S. Mint's Obama coins consumer advisory.

Official Obama Coins

Not all of the Obama coins floating around are unofficial, nor are they all just colorized U.S. pocket change. One the next page, I tell you about the two coins Obama actually does have something to do with, and whether they're a good investment or not.

Edited by: James Bucki

As explained in part one of this article, there are plenty of marketers trying to cash in on President Obama's historic rise to the White House by selling so-called "official" Obama coins. In my expert opinion, none of these unauthorized Obama coins are a good investment. So many millions of them are being sold that they will never be worth even half of what people are paying for them anytime in the next three generations.

However, there is one coin that President Obama himself has authorized, and which is being sold on Obama's official non-government Web site. The coin, (which should technically be described as a "medal,") is being offered in three metals: bronze, silver, and gold.

The Official Obama Coins' Specifications

The official Obama coins were struck by the Medalcraft Mint under contract for Obama's Presidential Inaugural Committee. They depict a portrait of President Barack Obama on the obverse (heads side) which was designed by Marc Mellon. The reverse, designed by Thomas Rogers, Sr., depicts Obama's Presidential Inaugural Seal with an inscription below. The inscription reads, "44th President of the United States of America Inaugurated Jan. 20, 2009."

The bronze and silver medals are a hefty 2.75 inches in diameter, and come with a wood display base and a certificate of authenticity. The bronze official Obama medal has no mintage limit, and sells for $60 on Obama's Web site.

The silver medal is made of pure (.999 fine) silver and sells for $400.

The Obama gold medal is 1.25 inches in diameter and struck in 14k gold, with a 24k plating to enhance its appearance. The only way to get the gold Obama medal is to buy the entire set of three types for $3,000. The set comes in a hardwood presentation box and includes the certificate of authenticity.

Official Obama Coins - A Good Investment?

The official Obama coins are a much better investment than the junk being sold by unauthorized marketers, but the bronze Obama inaugural coin is probably not going to be a big investment winner because there is no limit to how many are being made. One of the key considerations when buying any collectible for investment purposes must be rarity! The bronze Obama medal is not rare or limited in number.

The silver and gold Obama medals do have a limited mintage, 10,499 for the silver and 500 for the gold. But the second question you must ask yourself when buying a collectible for investment reasons is, "am I paying too much for it?" This is something you'll have to decide for yourself, but keep in mind that few collectors can afford to pay such high prices. The future resale value might not stay as high as the issue price was.

Where to Buy the Official Obama Coins

The best place to buy the official Obama coins is at Obama's own inaugural souvenirs Web site. In fact, for the silver and gold versions, Obama's site is the only place to buy them, unless someone is reselling.

Several other marketers and coin dealers are selling the bronze official Obama coin for varying prices.

If you see the official Obama inaugural coins in gold and silver for sale elsewhere, you'll almost certainly pay more for them than if you bought them directly from Obama's store.

There was one other official Obama coin that was sanctioned by the Democratic Party, but it was never sold to the public. According to the Birmingham Post, the Democratic Party placed an order with the Winston Elizabeth & Windsor (WEW) mint in England for about £100,000 ($156,000) worth of silver Obama coins to be used as gifts for party supporters. (Why the Democratic Party is buying from companies in England, rather than the USA is an issue beyond the scope of this article.)

These WEW silver Obama coins, which were made from specially-designed dies, were issued in a numbered limited edition of 300 coins. If you were lucky enough to have received one of these official Obama coins, you just might have a collectible with some potential to increase in value over the years!

Note: After this article was published, the WEW Mint began selling Obama coins struck from dies that are the same, or very similar to, the ones commissioned by the Democratic Party. The WEW coins which are for sale to the public are not the official coins mentioned above! They are not part of the rare numbered issue, and they are not authorized by President Obama.