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Changing currencies adds business

 The Liberty Coin Service website promotes its foreign currency exchange service.

The Liberty Coin Service website promotes its foreign currency exchange service.

Ever since my company opened in 1971, it has dealt in buying and selling foreign currency exchange. For decades, the approach was to purchase it below the exchange rate. Then, if any customer wanted it, they could buy it right at the current exchange rate. On that basis, there was little downside risk.

We did develop some regular customers who found out that they could sometimes acquire such currency from us at a lower cost than any other source. The problem was that our foreign exchange currency inventory was limited and often non-existent for the countries that people sought.

In 2010, a major supplier of foreign currencies to banks and credit unions discontinued this business line. That presented an opportunity. It happens that the company where I work is located about one mile from a university attended by several thousand non-American students. It is also about three miles from the state government Capitol building and surrounding offices. In addition, we are located just over 100 miles from the Canadian border.

We checked with several banks and credit unions and confirmed that almost all of them had either discontinued foreign currency exchange services completely or offered them only on special order basis with significant postage charges on top of their fees. Those that did continue to offer foreign exchange services tended to restrict such services only to people who had existing accounts with that institution.

Next, we checked on rates being charged at airport currency exchanges and found their rates to be little competition. So, we decided to add being a dedicated foreign currency exchange operation to our other niches that we served.

Initially, we committed to stock currencies spent in the Eurozone (now 27 countries) plus other countries where we had received regular inquiries (Canada, Mexico, Great Britain, Denmark, Norway, Switzerland, China, Japan, Australia and New Zealand).

We added a daily buy and sell rate sheet to our website for these and other currencies that we were willing to buy or sell. Our buy prices were slightly below the bids, and our selling prices were a bit higher than we would ourselves buy or sell such currencies with our foreign currency wholesale supply source. To add to customer convenience, they were not required to have an “account” with our company.

To publicize our expanded foreign currency exchange activities, we sent letters to every department at the local university announcing this service. We then sent announcements to all local branches of banks and credit unions and found that several were thrilled to be able to refer their customers to us. We also contacted the local travel agencies and tourist information centers to spread the word. After a while, we also began limited newspaper, radio, and television advertising of our expanded service.

As banks and credit unions and also travel agents booking group vacations started to refer customers to us, our volume rose significantly. Finally, our auditor of our anti-money laundering compliance program advised us that, because of the growth in our volume, we probably should register with the federal government as a money-service business.

That possibility was a concern, as we had heard of banks closing the accounts of companies that had registered as money service businesses. So, we checked with both of our banks to ask if this would be a problem, emphasizing that we were only looking to buy and sell foreign currency and not offer any other money service functions such as check cashing, payday lending, selling money orders, or transmitting funds to other countries. Both banks said that our relationships would not be in jeopardy if we registered as a money service business.

It turns out that the compliance regulations for a money service business that only buys and sells foreign currencies are much less onerous than if a company offered any of the other services.

Since 2010, our volume of buying and selling foreign currency exchange has more than doubled. Profit margins are tight, which means we consider this niche as helping to cover overhead rather than being a profit center. Still, it all contributes to the bottom line. We have added several more currencies that we stock on a constant basis.

Moreover, there are side benefits from offering foreign currency exchange services that other coin dealers with brick and mortar showrooms could also gain. First, traffic to our showroom is perhaps one-third higher than it was before just from the increase in our foreign currency exchange operations.

When these customers are in our store, several of them take time to enjoy checking our other inventory, which has added to our collector base.

Further, if you think about it, having several customers in your store at the same time gives an image that your business is “a place to be” that makes all other customers feel more comfortable dealing with you.

Finally, having more customers in the store makes it more intimidating to potential crooks, which means that adding foreign currency exchange services can add to overall security without any extra cost.

If any brick and mortar coin dealer is wondering how to expand business, adding the niche of foreign currency exchange services might be an option to consider.

Patrick A. Heller was the American Numismatic Association 2017 Exemplary Service and 2012 Harry Forman Numismatic Dealer of the Year Award winner. He was also honored by the Numismatic Literary Guild in 2017 and 2016 for the Best Dealer-Published Magazine/Newspaper and for Best Radio Report. He is the communications officer of Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at

This article was originally printed in Numismatic News Express. >> Subscribe today

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