The headline on the full page ad on the newspaper said:
State zip codes turn up cash for residents
The ad promises to send sheets of uncirculated two dollar bills. Since it seems whoever paid for this full page ad is hoping to make a profit, I decided to figure out what the ad really means.
State residents who find their zip codes on the Distribution List will feel like they have just won the lottery.
Sound exciting. Are they giving away money?
Valuable uncut sheets of never circulated $2 bills are actually being released to the first 10,537 callers who find their zip code on the distribution list below and beat the 48-hour deadline to get Vault Stacks full of real money
Making it sound very exclusive, with limited numbers in limited locations being eligible. The limited numbers and time limit add a sense of urgency. The random looking number 10,537 is an interesting touch. The word "actually" makes it sound like an unusual and exciting event.
I took a look at the ZIP code list. If the first two numbers of a ZIP code matched the numbers listed state by state, then the person would be eligible. The states of California, Florida, Massachusetts, Pennsylvania and Vermont were listed as not available. I fired up the tubes to find out how much of the rest of the country is eligible. It turns out that all ZIP codes in the remaining states are eligible! I suspect that the unavailable states have laws that might be a problem for the advertisers. A clever way of weeding out customers from states that may be a legal problem while providing an aura of exclusivity to the others.
What is a "Vault Stack"?
.. the Vault Stack containing three protective bankers portfolios each loaded with its own full uncut sheet of never circulated $2 bills.
The pictures of the sheets in the ad show each sheet containing 4 two dollar bills. Since there are 3 portfolios with a sheet each, that totals to 24 dollars worth of currency. Plus the very important sounding "bankers portfolios".
So what does it cost to get this money? If you read all of the text you will eventually get the answer.
for just $48 per portfolio and shipping
Note how they sell it in sets of three portfolios, but quote the price per portfolio to make it seem smaller. So the bottom line is:
You send them 144 dollars and they send you 24 dollars.
Does not look like a very good deal. But just in case someone figures out that you are paying more than it is worth to get the money, they hype the collector's value of the bills.
It's impossible to predict how much the bills will be worth in the future. But, since the Gov't shut down printing in 2006 on all $2 bills you better believe at just forty-eight dollars and shipping the bankers portfolio is a real steal.
Of course they have the usual disclaimers about how the future value will be unknown.
Do two dollar bills have any collector's value? I got the tubes going again and found the Wikipedia article on two dollar bills.
Another misconception is that the $2 bill is worth more than its face value; special $2 bills have been made in recent years, however they are not worth anything more than face value on the collectors market and most current $2 bills are not worth much more than their face value.
This seems unlikely to change if this fact from the Wiki article is true:
in 2005 alone, 61 million $2 bills were printed by the U.S. Bureau of Engraving and Printing
The bills bought through the ad would have to appreciate by a factor of six to come out even. Very unlikely that will happen.
Then I found this link from the Bureau of Engraving and Printing
The Bureau of Engraving and Printing is proud to present the Series 2003A $2 Uncut Currency Sheets
The price from the government for an uncut sheet of 4 never circulated two dollar bills is 21 dollars.
So you can go on the Internet and buy the exact same item from the government for less than half what the advertisers are selling it for. There is still a premium over face value, but is is far smaller. A sheet of 32 two dollar bills is 90 dollars, which is much smaller premium over face value. If you get the 32 bill sheet, you get more than twice as many as the you get from the ad product for 54 dollars less.
Anybody who expects to make money from currency collecting should spend a large amount to time and effort to learn that business. I am sure that anyone who does currency collecting as a hobby or a business will not respond to this ad. Anyone who knows nothing about collecting currency should not be buying it at large premiums over face value.
If I can so easily figure out that this is a rip off, why worry about it?
If they paid the money to have the ad printed, they obviously believe that some people will buy what they are selling. Are they wrong? I suspect that they have enough experience in this sort of thing to think it will work. I annoys me tremendously that people are so willing to be so deceptive.
But what really worries me is that there is so much of this stuff going on. This ad was just a little easier to pin down. But how many other solicitations are there out there that are just as deceptive, and harder to pin down? How much do larger, more well known businesses, especially in financial services, sell products or services that end up being a bad deal if the customers really understood what they were buying, but are much more difficult to figure out?
If states or the Federal government tried to restrict this sort of business, how many lobbyists will descend on legislators? How many will claim that this sort of thing is just free enterprise in action?
If people think that it is easier to make money by fooling people or taking advantage of ignorance, where will we get people who want to go into productive enterprise?