Costco's Silver Coins Sold Out Fast. Should You Buy Some Next Time?

Costco is a great place to buy $1.50 hot dogs, $5 rotisserie chickens, and…rare silver coins? The warehouse retailer recently offered a special price on packages of twenty-five (25) 1 troy ounce 2024 Canada Maple Leaf Silver Coins, 99.99% pure silver. Priced at $679.99 per 25-count package, the Costco silver coins sold out fast.

This is not the first time Costco has sold precious metals. The company also recently offered special members-only pricing on $2,000 gold bars.

Should you buy silver coins at Costco? Let's see if Costco's silver coins are really a good deal for coin collectors or precious metals investors.

Costco silver coins: Are they a good deal?

Let's compare the price of Costco's silver coins to silver spot prices. As of March 13, 2024, silver spot prices were about $24.16 per ounce. The Costco silver coins are one ounce each, in a package of 25 coins for $679.99, or about $27.20 per 1-ounce coin. This means the Costco coins cost $3.04 more per ounce, compared to silver spot prices.

What about the price of other Canada Maple Leaf Silver Coins? Another online retailer offers the same type of Canadian Silver Maple Leaf Coins (one Troy ounce each, 99.99% silver) for $32.95 per coin. Costco's silver coins are about $5.75 cheaper per coin -- about a 17.5% discount compared to this other coin retailer's price.

Downsides of Costco's silver coins

Unfortunately for silver investors and coin enthusiasts, Costco's silver coins did not get rave reviews from all customers. The coins only have a 3.3 star rating on the Costco website -- not because of flaws in the coins, but bad packaging and shipping. Several Costco silver coin customers complained that the packaging was faulty, with broken seals, and that their coins had spilled out of the protective tubes. Some said their coins were scratched and damaged, and others questioned whether they could still be assured of the authenticity of the coins, which were promised as having "brilliant uncirculated finish."

If you are a coin collector or silver investor and it's important for your coins to have the highest standards of quality and true "mint condition," buying silver coins from Costco or other online retailers could pose some risk. Costco advertised the silver coin deal as non-refundable and not eligible for price adjustments, so it's not clear whether any of the unhappy customers were compensated for their bad experience with the coin packaging.

How to decide if investing in silver is a good strategy

People invest in gold, silver, and other precious metals for a wide range of reasons. Some people love to collect beautiful gold bars, silver coins, and other valuable objects -- Costco's gold bars were truly gorgeous; I had to stop and zoom in on the photos a few times. It's understandable why gold has been in demand as a collectible item for millennia -- in royal palaces and more humble homes.

During times of economic uncertainty, some investors also turn to precious metals because they believe these commodities can be an enduring store of value. Even if high inflation takes away the value of a dollar, precious metals investors believe that gold and silver will tend to retain their value as a store of wealth. For example, there's an old saying among gold investors that "at any time in history, an ounce of gold has been able to buy a nice men's suit."

Is silver a good investment compared to buying stocks? Let's look at the price of silver vs. the S&P 500 for the past five years.

Precious metals are like any other investment category: sometimes they go up, sometimes they go down, and sometimes they go sideways. Gold and silver are pretty to look at, and could be worth including in a diversified portfolio, but there's no inherent reason why silver or gold should be considered a "better" investment for the long term than just buying stocks and bonds. Gold and silver don't pay dividends like stocks, they don't generate income like bonds, and they're not FDIC insured like CDs and savings accounts.

And investing in precious metals like silver can also bring a few special risks and downsides: you have to store your silver coins somewhere. What if your silver coins get lost, damaged or stolen? Or worse: what if the company that's selling silver to you is also stealing from you?

Unfortunately, some precious metals investors have been victims of precious metals fraud in recent years, where unscrupulous merchants and dealers have cheated them out of their money with bogus sales pitches and big promises. Precious metals are not the only type of investment where this could happen. But if some sales person is promising you "guaranteed returns" on an investment, trying to get you to sign up for complicated financing or trading terms you don't understand, or hitting you with high-pressure sales tactics, just hang up the phone and walk away.

The collectible coin market is unregulated, highly speculative, and involves risk -- and like all investments, past performance is no guarantee of future results.

Bottom line

Costco made headlines for offering a unique deal on silver coins -- but the story also shows why investing in silver coins can be risky for your personal finances. If you love collecting coins and you believe in precious metals as an investment category, then Costco silver coins could be a good deal. But beware of the risks and downsides of this or any investment.