This is a controversial topic and it involves philatelic ethics. Itís a lesson for dealers and itís a lesson for collectors.

Suppose I buy a stamp collection for $500. In breaking it down, I discover a stamp with considerable value. Iím 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 donít 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, Iím not very inclined to go back to them and give them more money. Why? Part of me feels like the seller didnít do their job. They know stamps. Therefore, they should understand their value. If they didnít 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, Iím 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, Iíve taken a pledge to deal with sellers in an ethical and fair way.

To be honest, if I found a $5000 stamp, yes, Iím 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, ďThey didnít know that they owned this stamp? Seriously?Ē

Letís, say I find a stamp that had a different watermark. The owner cataloged it as the inexpensive variety. Itís a $50 stamp versus a $5 stamp. In this case, the seller probably bought it as a $5 stamp. Therefore, heís not really ďoutĒ 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, thatís my dilemma. Where do I keep the profits because I did the work to identify the stamp and where do I say, ďYou know what, this stamp is worth a lot more money. Itís unethical for me to keep the profits this stamp is going to bring.Ē

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

Itís 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? Itís a judgment call. There is no set rule.

Here is a lesson for the seller, especially when youíre 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, ďThese are the more valuable stamps in my collection.Ē If you donít point them out, there is a chance Iím 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 didnít 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. Itís 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, Iíve 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, ďI did well this timeĒ versus owing the seller more money? Iíve taken that pledge to be ethical. But I canít go back on every deal and say, ďHere is $23.46 more because I found a couple of stamps that I did better on.Ē

You thought being a stamp dealer was easy!