Wednesday, August 13, 2008

What Do I Do With An Inherited Stamp Collection?

Last week, I received the following e-mail, which I will paraphrase:

My Mom inherited thousands of stamps about a year ago. We spent months looking them up in the Scott Standard Postage Stamp Catalog. After a couple of months of research, we came to the conclusion that in this very, very, old collection of stamps are some very rare stamps.

Once I read about you and studied your web pages, I decided to take a chance in contacting you. None of us collect stamps. And although I have thoroughly enjoyed studying and learning about them, we would like for them to find a home where they can be enjoyed and not shut up in a bank vault.

After responding privately to the e-mail's author and receiving permission from her, I have decided to make portions on my reply public since this is the second request from a non-collector on what to do with inherited stamps in just the last few months. I've also been asked a similar question from one of my regular readers who has also taken the time and effort to send me an envelope full of duplicate stamps as a donation.

My paraphrased reply is recorded below. Hopefully, it can be used to help readers that find themselves in a situation where they want to dispose of a stamp collection, when they themselves have limited knowledge of the philately hobby.

There are a few things that a non-collector can do to dispose of a stamp collection. The one thing you have tried -- valuing your stamps using a stamp catalog -- is often the most frustrating and can lead to disappointment. Be forewarned that you almost never get anywhere near the catalog value of stamps when they sell. Here's why.

The value listed in most stamp catalogs represent what a dealer would charge you if you went to them to purchase that stamp. It is their selling price, not their buying price. It does not take into account volume discounts, past business dealings with the dealer, or any other thing that establishes you as a frequent customer. For example, most of the 20 cent catalog values that you see in Scott's Standard Postage Stamp Catalog, for example, are the minimum value and are simply for the dealer's time and effort to secure that one stamp. In reality, many of these minimum value stamps are worth much less, sometimes only a penny or two. But a dealer has to stock them, take up space with their inventory, pay the light bill with them, etc.

When it comes to stamps that have a higher catalog value, a dealer's offering price will be closer to the catalog value, simply because their catalog value is due more to their rarity than for recouping the dealer's overhead.

Extremely rare stamps in great condition can and do yield a premium value over the catalog value. However, these types of stamps are very rare.

By the way, I would not recommend selling just a few stamps here and there, as a "cherry-picked" collection drops in value rapidly, once the higher-valued stamps are gone.

It's helpful to remember that the dealer can only stay in business by selling stamps. He can have the rarest stamp of all, but if he can't put food on his table with his business, he's soon out of work. So the dealer naturally wants to buy as cheap as he possibly can and sell as high as he possibly can.

This is not to suggest that a dealer will automatically take advantage of your lack of knowledge of stamps and offer a ridiculously low price for your collection. Yes, a few unscrupulous dealers might lowball their offer, but I think most dealers, especially those that have been in business for a long time and are members of recognized philatelic organizations, will offer you a fair price. However, the name of the game is to buy low and sell high.

Another thing that works someone trying to sell a stamp collections is that stamp collecting as a hobby has been in retreat for a number of years. I wish it wasn't so, but there are fewer and fewer stamp collectors, so the market is over-saturated with stamp sellers and under-saturated with stamp buyers. This, of course, is the supply and demand cycle of economics; there are lots of sellers, but few buyers.

Still another thing that hurts a non-collector who tries to sell a collection is that they tend to over-estimate the condition of the stamps they are trying to sell. Many stamps have to be in perfect condition to be anywhere close to their catalog value. That would include things like how well-centered the stamp is, if there are any damaged perforations, if the cancellation mark on a used stamp is light, etc. A stamp can quickly lose half of its value, if there is the slightest disturbance of the gum on the back of the stamp. It's like the old saw about real estate ("location!, location!, location!") except that for stamp collecting it is condition!, condition!, condition!

Now that I've shared the "bad" news, let me give a few pointers on what you may be able to do..

  1. Consider using the collection as a starting point for your own collection. The stamp collecting hobby is not for everyone, but it does have its benefits. One of those is that it can fit anyone's budget. Another is that you can usually collect stamps well into your golden years because it is not as physically demanding as many other hobbies.

  2. If you are determined to sell the collection, you can always accept any amount of money that was offered by a dealer. If it was an inherited collection, you have zero invested in it, so any amount you get will be better than no amount. I'd try to get quotes from at least two sources before I would close the deal, since you might just happen upon one of the few unscrupulous dealers in the business.

  3. If you think the collection has one or more rare stamps .... for instance, one that catalog over $250 or so, you could send them off to be expertized. Expertizing is the process in which a philatelic expert will evaluate the stamp by determining if it is a genuine stamp. There are many forgeries in the history of stamp collecting, so this is an important step. Some services will also grade the stamp by evaluating key aspects of the stamp: is it centered on the paper, is the paper in good condition, are the colors bold, etc. Most will not give an estimate of its value, just its condition and whether it is a forgery or not.

    There are sometimes substantial fees for this process so you would have to determine which stamps you can afford to have expertized and graded. Typically, it is only justified for higher-valued stamps.

    Once you are armed with a grade and condition of a stamp, it would be a simple matter to e-mail some dealers, see if they are interested, and try to sell the entire collection to them.

  4. Sell the collection on a stamp auction site. It might be a good thing for you to do, or it might be something that you can consign someone to do for you. However, non-collectors have to be careful in this venue. Having a poor description or an improperly labeled stamp will just result in missed opportunities, frustrated buyers, and a generally negative experience.

  5. Did the deceased person have close friends that were stamp collectors? If so, maybe they will help you establish a value, or possibly offer to buy the collection from you. You might could even set up an installment plan with the deceased person's close friends where you receive more money than a dealer would offer, but over a period of months.

  6. Re-evaluate whether you really want to sell them. If the collection is of some sentimental value, such as a deceased parent's collection, maybe it would be worth more in sentimental value to see that a child or grandchild keep them in the family. A decision such as this would depend on tangible factors, such as what a dealer might pay, as well as intangible factors, such as their value as a sentimental object or the closeness of the recipient.

  7. Consider donating them to a charity. Many stamp magazines have a few ads from recognized charities that request donations of stamps. Other charities might be more local to you and your family, such as nearby veterans' hospitals, schools, or senior citizen centers.

    Be sure to check with a tax consultant as to tax implications of such a donation. Some donations are tax-deductible, some are not, and some may trigger additional taxes; it all depends on your individual tax situation.

Best wishes in finding a new home for your inherited collection!


Pablo Echevarría said...

Excellent explanation. This question about selling a collection is one of the most commoon ones I get in my stamp site.

Anonymous said...

Call to Make an appointment with and take the collection to an Auction House and ask them to evaluate it. They will tell you within a few minutes if it has value or not. And they would probably like to sell it for you if it has value. They will sell the good stamps separately and maximize the price. That is their job. It will take them 6-12 months to setup, sell and give you your money but if there is value there, it is worth it.

trix said...

Is there a trick to identifying more valuable stamps. I literally have thousands.

Steelcurtain1963 said...

I began collecting stamps as a way of passing time, in 1996, and over the years I have developed a network of shut - ins whom are mostly (but not exclusively) elderly. Most of these individuals are shut - in due to physical handicaps or injuries; and, most have very limited resources. Over the years I have also developed relationships with a few stamp dealers and private benefactors whom donate stamps of all varieties; which, I generally separate into countries of origin and then mail specific nations to the shut - ins whom collect those specific stamps --in some cases it is topicals instead --which provides a lot of happiness and joy to many individuals that cannot do much else. If you care to donate any stamps, or anyone else whom may read this wishes to do so, please feel free to contact me to make the appropriate arrangements : regardless of the stamps ' values, all donations are much appreciated. My contact information is :
Warren County Philatelic Society

Anonymous said...

Why not donate to a charity and help others in need? It's an easy way of getting the true value of the stamps through a tax deduction. I would say check out They are an IRS 501(c)3 certified non profit organization. It's an easy form to fill out to get started and they also have staff available to answer any questions.