This is a controversial topic and it involves philatelic ethics. It’s a lesson for dealers and it’s a lesson for collectors.

Suppose I buy a stamp collection for $500. In breaking it down, I discover a stamp with considerable value. I’m purposely not stating the dollar value for a reason. What do I do? Do I sell the stamp and make a large amount of money? Do I go back to the seller and give them more money?

Here is what I would do.

There are two types of sellers. Knowledgeable sellers are stamp collectors who know about stamps. There are other sellers who don’t know stamps at all. For example, they inherited a collection and they have no idea of its value.

If I bought the collection from a knowledgeable seller and I found a valuable stamp, I’m not very inclined to go back to them and give them more money. Why? Part of me feels like the seller didn’t do their job. They know stamps. Therefore, they should understand their value. If they didn’t take the time to discover that they have a more valuable stamp, why should I reward them with extra money?

If I bought the collection for $500 and ran into, say, a $50 stamp, I’m more likely to chalk that one up to luck and this time I get to make a few extra bucks. What if I ran into, say, a $5000 stamp? Now what? As a dealer member of the APS and an ASDA member, I’ve taken a pledge to deal with sellers in an ethical and fair way.

To be honest, if I found a $5000 stamp, yes, I’m going to give the seller more money and point out what was overlooked. But what is the cut off line? For a $50 stamp, I chalked it up to a lucky find. But at $5000, I pay more money. When should I pay more money? At a $100 stamp? At a stamp that is, say, 10% of the overall value of the collection?

Allow me to exaggerate a minute.

If I went through the $500 collection and found a copy of Scott #C3a, yes, I owe the seller more money. I would also think, “They didn’t know that they owned this stamp? Seriously?”

Let’s, say I find a stamp that had a different watermark. The owner cataloged it as the inexpensive variety. It’s a $50 stamp versus a $5 stamp. In this case, the seller probably bought it as a $5 stamp. Therefore, he’s not really “out” any money. If he had taken the time to correctly identify his stamps, then he would have made the discovery and he would have profited from his work. If I find that $50 stamp, why should I reward him with extra money? He bought a $5 stamp and he sold me a $5 stamp.

As a dealer, that’s my dilemma. Where do I keep the profits because I did the work to identify the stamp and where do I say, “You know what, this stamp is worth a lot more money. It’s unethical for me to keep the profits this stamp is going to bring.”

I’m more tolerant when buying collections from a person who is not knowledgeable. They don’t know the value of the stamps and they are depending on me to set that value. Again, I can’t give you a definitive cut off line. However, I’m more likely to give this kind of person some additional money because I feel like I didn’t do my job right in evaluating their collection. In cases like this, I’m more inclined to give them extra money even for the $50 stamp that I found in a $500 collection.

It’s a dilemma every dealer faces. When do you make a discovery of a more valuable item, when do you chalk it up to luck and you pocket the profit? And when do you pay the seller more money? It’s a judgment call. There is no set rule.

Here is a lesson for the seller, especially when you’re a stamp collector who knows the value of stamps. When you sell your collection, part of the responsibility lies on you to point out to the dealer, “These are the more valuable stamps in my collection.” If you don’t point them out, there is a chance I’m going to overlook them when evaluating your collection for my offer.

Before you say that a dealer should always pay extra money, let me sway your opinion the other way.

Suppose I buy your collection. When I go to sell your collection, I find that the $500 stamp you sold me is actually a $5 stamp. Now what? Can I go back to you and ask for some money back? No! I didn’t do my job. I should have identified that $5 stamp and structured the deal accordingly. In this case, I have to eat the loss because I failed to recognize the $5 stamp.

A reputable dealer would never buy the $500 stamp without checking it out. However, there are instances when the dealer can be wrong and they really do end up with the $5 stamp. It’s a mistake they made and they have to live with the consequences. A reputable dealer would never go back to the seller and ask for money back.

In my years of buying and selling stamps, I’ve had successes and failures. I have to live with the failures and eat the loss. When I have a success though, where is the boundary between saying, “I did well this time” versus owing the seller more money? I’ve taken that pledge to be ethical. But I can’t go back on every deal and say, “Here is $23.46 more because I found a couple of stamps that I did better on.”

You thought being a stamp dealer was easy!