Are Obama Coins a Rip-Off?

Do Colorized Obama Coins Have Investment Potential?

Official Barack Obama inauguration coin
Christopher Furlong/Getty Images

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 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. If a consumer purchases a small number of coins we know that there is little or no profit incentive driving the purchase.

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 advertisements 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 advertisement 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." Companies are selling Obama coins for prices ranging from $9.95 plus shipping (total: $14.90) to nearly $30 each, and all they are selling are defaced Presidential Dollars that you can get for $1 at the bank!

Manufacturers colorized most of the Obama coins using a Presidential Dollar for the host coin and applying 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. Because the colorization process has destroyed the original surfaces of the coins, these colorized Obama coins will never have any value to coin collectors as collectible Presidential Dollars.

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.

Marketers are selling one version on TV that uses the Illinois State Quarter's portrait of George Washington and replacing it with 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 manufacturers produced millions of them and that they are not likely to increase in value. 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 $3.95 on up to $9.95 for a version with Joe Biden and Obama together. The bottom line is that the Obama coin is still only worth twenty-five cents.

U.S. Mint and PNG Warn Against Obama Coins

Both the U.S. Mint and the Professional Numismatists Guild (PNG) issued warnings about Obama coins, cautioning that the coins are not viewed as rare coins nor an investment, but only as a souvenir item.

Official Obama Coins

As explained previously, 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. Experts agree that none of these unauthorized Obama coins are a good investment. Marketers have sold millions of them, and 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. Obama's official non-government Web site sold these coins during his tenure in office. The coin, which is technically classified by experts as a "medal," was offered in three metal compositions: bronze, silver, and gold.

The Official Obama Coins' Specifications                        

Medalcraft Mint struck the official Obama medals 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, came with a wood display base and a certificate of authenticity.

The bronze official Obama medal had no mintage limit and sold for $60 on Obama's Web site. The silver medal was made of pure (.999 fine) silver and sold 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 was 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.

Were the Medals A Good Investment?

The official Obama coins were a much better purchasing decision than the junk sold by unauthorized marketers. The bronze Obama inaugural coin is probably not going increase in value because there is no limit to how many the manufacturer could make. One of the key considerations when buying any collectible for investment purposes must be a rarity! The bronze Obama medal is not rare nor 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?" The answer to this question 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 most popular place that people bought the official Obama coins was at Obama's inaugural souvenirs website. In fact, for the silver and gold versions, Obama's site was the only place to buy them, unless someone is reselling at a public auction site like eBay.

Several other marketers and coin dealers have sold the bronze official Obama coin for a variety of 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 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 that the party was going to use as gifts for supporters.

The WEW Mint made these silver Obama coins from specially-designed dies and issued them in a 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!

After this initial offering, the WEW Mint sold Obama coins struck from dies that were 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 President Obama did not authorize them.

Edited by: James Bucki