Will, arriving just before the sale was about to close for the day, thought that a pair of porcelain pieces, with a hallmark he thought he recognized, could be 18th-century French made. If they were, they could be worth much more than the $125 apiece they were tagged with. Will asked if he could get the pieces for a second-day price, and the dealer agreed. A deal was struck: $100 for the pair.

When he got his prizes home, Will was able to confirm that what he had bought was indeed made by Sevres, and worth between $3,000 and $4,000 each. A “Great Find” by anyone’s measure.

But the first two comments left by WorthPoint readers were offended by Will’s attempt to reduce the purchase price:

Gary R. Smith wrote:

“…he asked for a discount on a set of porcelain pieces that were already severely under priced. What stopped him from paying the asking price when he knew he would/could make at least 20 times his investment? I know it’s evident to everyone that reads the story (that) ‘greed’ most likely took over.”

Another reader, Betty Ruis, added:

“…This is greed, pure and simple. Makes you wonder if you’d be taken for a ride with an ‘expert appraiser’ by the ‘(W)orthologist.’ Especially since this was the CEO & founder of Worth(P)oint. Sure doesn’t say much about his integrity.”

Well, these two comments brought a host of other WorthPoint readers to Will’s defense:

Mary wrote:

“The buyer of the Sevres pieces did not know for certain what he had. He could have very well been mistaken and even have overpaid had the items been other than Sevres. Many a bought piece has been found to have damage and repairs not seen until after the buy. A buyer must not pay too much for items or into a hole they will go.”

C. Mire added:

“The price of something is what one is willing to sell for and a buyer is willing to pay. Value is something different altogether. If they were willing to drop the price, then why not? Greed has nothing to do with it. Everyone dickers on price.”

Judy Linville, who conducts tag and estate sales, says this happens pretty frequently:

“I usually know when something I have priced modestly flies out of the sale during the first hectic 30 minutes. Like the sellers in this case if this was the end of the first day, I would have wondered if they would sell on the second day or be left for Goodwill. You just have to be thankful if you are the buyer and if you are the seller promise yourself to look more closely the next time. As a seller I would have given the man the next day pricing, fearing that the items might not sell at all had I waited.”

C. Isaacs relayed an experience where he paid more than the asking price and felt better about it:

“The last moving sale I was at (at closing time, the last day), I saw an old chest of drawers I liked, and I asked the price. He said “five bucks.” I said, “no, no, no!” He looked at me oddly, and said “is that . . . ah . . . too little?” I replied, “way too little!” So he said “how about $25?” –which I gladly paid. And so I carted away a pine chest with hand-cut dovetails and old square nails visible in the inside corners of the slides, which I discovered after I got it home. I also found an old pencil inscription on the inside giving the provenance and dating it to the mid 1800s. I got a great buy, and I felt a little better about it than I would have if I’d bought it for $5.”

Finally, to clarify a concern raised by Betty: “Makes you wonder if you’d be taken for a ride with an ‘expert appraiser’ by the ‘Worthologist.’” Greg Watkins, WorthPoint’s editor, had this to say:

“When you engage a Worthologist through WorthPoint’s “Ask a Worthologist” service, you are hiring a professional who is pledged to provide an unbiased, expert opinion of a collectible or antique, including an estimated range of its fair market value. We are working for you. Furthermore, the Worthologist, and any member of WorthPoint, for that matter, is contractually banned from making an offer to buy the item. This assures that there will be no low-balling on the value in an effort to make an easy score at the expense of the customer.”

We are excited when an article that appears on WorthPoint sparks a conversation like this. I you ever have a thought about something you have read on WorthPoint that you would like to share with our art, antique and collectibles community, please leave a comment. The comment box is at the bottom of each article.

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He was preaching to the choir, at least the one in which I sing. Point after point, I thought: “I have written about that. I stress the same things when I teach the core courses for my Institute for the Study of Antiques and Collectibles.”

Entrepreneurship is inescapably entwined with the antiques and collectibles business. Individually owned businesses dominate the trade, from auction houses to sellers. Most attempts by corporate America to consolidate horizontal or vertical sectors of the antiques and collectibles business failed or weakened rather than strengthened the industry. EBay’s attempt to enter the gallery auction business through the acquisition of Butterfield & Butterfield and Dunning’s is a classic example. Our business works best when the owner is an individual or family, just ask Dan Morphy of Morphy Auctions.

Early in Mellinger’s lecture, he asked the following question: “If you are starting a business, what is the most important thing you need to succeed—a great product, a good business plan, a talented workforce, financing or customers?” Obviously, you need all of these. However, if you had to pick just one, which one would you pick? Mellinger’s answer is customers. His theory is a simple one: There is no business without customers. No matter how good your product, your business will fail if there are no customers who wish to buy it.

For decades, no for a century, the antiques and collectibles sellers—especially those in the antiques sector—dictated their customers’ wants. They created [I was tempted to use manipulated, but rejected it as too strong a word] the market by what they chose and chose not to offer. The trade press, from periodicals to publishing houses, supported these choices. There was a collecting pecking (snob) order. Collectors and those who sell to them dominated the marketplace. The antiques and collectibles walls of Jericho tumbled as the 20th century ended.

The 21st-century antiques and collectibles customer is far more complex than his 20th-century counterpart. It is no longer possible to think of him as a single entity. The antiques and collectibles trade has customers, each of whose demands differ. There is no “one size fits all.”

The principal purpose of this column is to ask everyone in the trade, myself included, to take a hard look at what we do and ask if the products we offer, whether tangible goods or service products, are what our customers want. Are we still attempting to dictate need or are we responding to demand?

Needs change. Mellinger made this point over and over again during his lecture. A good entrepreneur constantly reinvents himself. When market needs shift, he changes. Sometimes he drives change; other times he reacts. What he does not do is stand still. His success hinges on one key principle—providing the product/service the customers want.

The individuality of the antiques and collectibles trade is both its strength and weakness. Most individuals, under the guise of preserving their own independence, do not belong to a trade association. One of the positive values of eBay’s Collectibles Division, now long gone, was the funds it had to do market research. Today, there is no market research. A half-dozen times a year I receive a call from a financial reporter at one of the leading newspapers or magazines asking, “How big in terms of dollars is the antiques and collectibles market?” “I do not know,” I tell them, “And I do not know who can tell you. Any number is a guess.”

When asked to define what I do in the antiques and collectibles field, my standard response is “I sell information.” Giving the matter additional thought, a more correct response is “I sell my best guess.” My best guesses are qualitative, not quantitative; based on experience and what my gut tells me rather than statistics.

While not a fan of Top 10 Lists, I decided to put my prejudice aside and identify the top 10 antiques and collectibles customers in today’s marketplace. They are not ranked in order of importance. One customer is as valued as another.

1. American Collector (over age 55): This is an old school/traditionalist collector, one who has collected one to five categories for a lifetime. He is heavily influenced by what has been collected in the past. His collections contain the commonly found material. He only wants the upper echelon and masterpiece/ultimate units he does not own.

2. American Collector (ages 40-55): This collector’s focus is post-1945 objects. His primary emphasis is on things relating to his parent’s generation, i.e., the objects with which he grew up. He has multiple collections, changing his approach every six to 10 years, a decision motivated by lack of affordability within a collecting category.

3. American Collector (under 40): A 39-year-old collector was born in 1970. He knows about the 1950s and 1960s and has vague memories of the 1970s. He is “me” focused and into instant gratification. He shops more on the Internet than in the traditional marketplace.

4. International/Foreign Collector: There are two types: (1) the country loyal traditionalist who loves buying back his country’s treasures and returning them to his homeland and (2) the American movie-, music- and television-focused collector. Both groups are big Internet buyers, the first using “live” auction platforms and the second, eBay and direct sale sites.

5. Investor: Antiques and collectibles are nothing more than commodities to be bought and sold. He understands the secondary price market can be manipulated and works actively to do so. He often acts on bad advice from sellers, e.g., auction house personnel and high-end dealers who place their interests above his.

6. Professional Decorator: The professional decorator moves in and out of the market depending on the strength of the economy. Given the state of the current economy, he is a minor player. When in the market, he is a viable sale source for second- and third-level material.

7. Amateur Decorator: The amateur decorator is heavily influenced by decorating/lifestyle magazines. Many of these magazines have moved away from using antiques and collectibles in their decorating schemes. The trade needs more Martha Stewart clones.

8. Trend Follower: This individual uses antiques and collectibles to supplement current decorating trends, whether time period, color, form (animal or vegetable of the month), etc. He creates buying markets that often last no longer than six months.

9. Nostalgia Buyer: The nostalgia buyer is an in-and-out buyer, i.e., he enters the market to buy something he remembers. Because he wants it immediately, he pays whatever is necessary to acquire it, often creating a temporary spike in value. Once he buys what he wants, he is gone.

10. Reuser/Recycler: The reuser understands the “cheaper than new” concept. He uses what he buys, usually for the purpose for which the object was made historically. Affordability is the key to keeping him in the marketplace.

Who did I forget? What customers would you add to the list? E-mail me your thoughts at harrylrinker@aol.com.

Meanwhile, if you are a seller, take a hard look at your customer base. Are you offering it what it wants? If you answer yes, ask one final question: “How many new customers did I add to my customer base in the past six months?” If the answer is less than five, consider the possibility that your first answer should have been no. No business survives without new customers.

—————————————-

Rinker Enterprises and Harry L. Rinker are on the Internet. Check out his Web site.
http://www.harryrinker.com

You can listen and participate in “WHATCHA GOT?,” Harry’s antiques-and-collectibles radio call-in show on Sunday mornings between 8 a.m. and 10 a.m. Eastern Time. It streams live on http://www.gcnlive.com on the Genesis Communications Network.

“SELL, KEEP OR TOSS? HOW TO DOWNSIZE A HOME, SETTLE AN ESTATE, AND APPRAISE PERSONAL PROPERTY” (House of Collectibles, an imprint of the Random House Information Group), Harry’s latest book, is available at your favorite bookstore and via Harry’s Web site.
http://www.harryrinker.com

Harry L. Rinker welcomes questions from readers about collectibles, those mass-produced items from the 20th century. Selected letters will be answered on this site. Harry cannot provide personal answers. Photos and other material submitted cannot be returned. Send your questions to: Rinker on Collectibles, 5093 Vera Cruz Road, Emmaus, PA 18049. You also can e-mail your questions to harrylrinker@aol.com. Only e-mails containing a full name and mailing address will be considered. Please indicate that these are questions for WorthPoint.

Copyright © Rinker Enterprises, Inc. 2009

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Here is a sampling of what readers are saying. Please don’t hesitate to send us your thoughts.

——— WP ———

Lots of children make presents for their mothers on Mother’s Day. Lots of the gifts have a flower theme. Christopher Kent’s recounting of what his mom did with flowers in “A Mother’s Day to Remember—1965” elicited more than one comment.

Thank you for sharing that heartfelt story about your mother. It reminded me of those halcyon days of the 1960s and the structured lifestyle we all lived. Sadly, the humor of those days is passé, and we are hard pressed to find a good laugh anymore. Thanks again for a laugh and a tear.

Robert

You painted a picture so vividly, I could imagine being there. Brought great memories of my mom and dad. Thanks so much.

Alison

This brought tears to my eyes. Thanks, Christopher! I think I would have liked your folks!

Lisa

What a wonderful story, Christopher, a great memory of your parents on Mother’s Day. Thank you so much for sharing it!

Barbara

——— WP ———

As you’ll learn by reading “Chris Hughes—Seeking a Collectible’s History,” Chris is real treasure seeker. And the treasures he most likes to find are military items and the stories that go with them. But he has lucked out this time. It was Jack who came seeking him.

We have one of those WWII uniforms in our garage. It is a Canadian uniform worn by an American who enlisted to fight Germany. George Knowles Sr. thought the American politics of the time were alarmingly wrong not to get into the fight. So he enlisted in Canada’s armed forces. He never received any pension or post-service benefits from either country since he was serving outside his domain of origin.

We would gladly send you this uniform for the cost of shipping just to have our garage space available. George Senior went on to achieve 17 patents for Coors. One of which is the aluminum pop-top beer can. Quite a man!

Jack

To which Chris replied:

Jack,
That is greatly appreciated . . . This uniform sounds like it would be great fun to research and author an article on!

Chris

——— WP ———

Steve found the profile of Worthologist Christopher Kent, “Christopher Kent: A Man for All Seasons,” a “gem.” We’re glad because Christopher himself is a treasure.

This brief summary of Christopher Kent’s career is a gem. The ability to identify a pivot point like this lunch box sale in the market and explain how such a sale was a catalyst for market transition to a new parameter is true wisdom. There are book-learned people being turned out of colleges like factory farming right now, but here is an example of a man with a career who has genuine talent enhanced with common sense and a dose of “book-learning,” which didn’t ruin him. Thanks for this wonderful story.

Steve

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The insights and observations in Harry Rinker’s story, “With Gold Sale Parties, It’s Caveat Venditor, Not Emptor,” hit home with readers. And the reaction in the following comments serves to reinforce the importance of the WorthPoint mission. As Will Seippel, founder and CEO of WorthPoint, said after reading the responses, “That is why we are here—to help people learn the value of their items and how to sell or buy them!”

I loved your article. In 1996 I, too, was taken to the cleaners out of desperation. My chiropractor husband got Alzheimer’s, and we were losing our home. I went to an antique shop and sold off most of my sterling Tiffany, brilliant period crystal and diamond jewelry. I think I got around $1,200. The jewelry alone was worth double. The crystal also double.

But I knew resale was always less . . . or so I thought. I told the antique dealer I had more stuff, so he came to my home to look. Well, I had a dirty Waterford vintage crystal stemware on the kitchen counter. He saw it and asked if I had any more. I opened my cupboard, and he saw my 32-piece set in four sizes. He said he would put those on his buy list. We then go to the living room, and he spots an antique, very small Persian rug on the floor and a 1918 watercolor above the piano. He examined all the items and made them out to be “So So.”

He pulled out $200 for the rug, painting and crystal. I, like a desperate fool, accepted it thinking after he paid me $1,200 the day before that he knew his prices. He said he would be back. After he left with all my treasures, I got a weird sinking feeling in the pit of my gut. The next day when he returned I told him NO THANKS, I was finished selling. He hesitantly went on his way, and that was that. I to this day could KICK myself for being taken. Now again we are in desperate times, but I have learned and will be Caveat Venditor. Thank you for your article.

Linda Rowan

The irony of the situation is that I was having a discussion on the vulnerabilities of those who find themselves at a disadvantage because they have to sell precious heirlooms to satisfy their financial obligations.

I’m extremely grateful that you wrote this, and it further reinforces the fact those who have chosen this profession are not all thieves and predators. I have sent this to friend and foe alike. It should be printed as a public-service announcement in all publications.
Once again, thanks.

James Adams

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Not surprisingly, Lt. Lawson Reichard’s World War II diary has generated much interest. It is one man’s experience in the “Good War” in his own words as he made his daily entry. A reader sent a comment about a project to preserve the real story of the conflict as seen by someone not in the upper echelon of command or leading daring raids. Rather a relative working with the Red Cross in North Africa.

I am working on my aunt’s letters from Africa and Europe during WWII when she worked for the American Red Cross. I am also searching for other events that were happening at the time of each letter. When Lt. Reichard’s was still in the U.S., my aunt was in Casablanca with the Red Cross. I am hoping to form all of her letters and corresponding events into a book for her nieces and nephews.

Tobey

Hi Tobey, That is wonderful that you will work to preserve that part of your family’s history. We really are the last generation to have firsthand accounts to learn from. I hope you continue to follow Lt. Reichard. He does eventually get overseas. It might be fun for you to track them together. Please write back as you get into your aunt’s letters, and keep us informed about how your project is going.

Alison Harder

——— WP ———

After reading “How to Repair Vintage Fur Yourself,” Annie had a question for Sharon Maxwell-Yamamota, WorthPoint’s vintage-clothing and accessories Worthologist. The answer may not have been what Annie was hoping for, but some novel Christmas decorations could be in the offing.

I have a beautiful jacket that I have barely worn that I can peel the fur with my fingers. Is there any help for restoring the fur? It’s an old jacket. Thanks.

Annie

Hi Annie,
I’m sorry to tell you that if you can peel it so easily with your fingers, it’s too far gone to do anything with. That is best used for crafts, like making Santas and such, using glue, since the skin would never hold a needle and thread at this point. Sorry!

Sharon

——— WP ———

And many thanks to prh for catching an error in a headline, no less. He noticed that the date for the Weekly News Roundup was 2006. We always welcome corrections.

——— WP ———

Kathy sent this question after reading “WorthPoint Offers a 14-Day Free Trial,”and Marci responded, a great example of the WorthPoint community’s give-and-take.

I would be interested in finding out how to buy and sell antiques. How do I become involved?

Kathy

Kathy, you “could” accumulate antiques and hang your shingle, but there are far better ways.

Be certain that you have knowledge first. How do you receive it? Well, by taking antiques classes, reading everything you can get your hands on, visiting antique stores and shows, attending auctions, checking auction results, etc. Speaking with seasoned dealers and asking questions. Then you must get a tax number to file sales tax.

Selling antiques is a lot of hard work, but if you have the passion, you won’t mind the work. Good luck with your endeavor.

Marci of The Way It Was Antiques

——— WP ———

It’s always nice to get positive feedback. In this case, it’s on Harry Rinker’s positive story, “Good News for Dealers—Finally.”

Great article. I am having success in my antique/gift shop even in the downturned economy. I am the “face” of my shop and work to serve the customer. I also take items on consignment from local folks and enjoy helping them out, too. It gives me a great variety in my shop. (Tickled that you used my picture of the pink Depression glass perfume bottle that I have listed on goantiques.com!) Thanks for the positive article

Carolyn of Memories Past and Present

——— WP ———

The Internet has brought the world closer and as evidenced by this comment to “Wooden Carousels: Historic Collectibles’ Worth Preserving,” spans the generations.

I am the granddaughter of E. Joy Morris. Thank you for recording his importance in carousel history. He often gets lost because of being over shadowed by PTC. I agree that the Kit Carson County Carousel is the finest American carousel in existence. One of my goals is to be able to visit one day. I have yet to see it in person.

– Morris Cook

I do hope you have a chance to ride this carousel. The craftsmanship is remarkable, and it really is a ride back into the past.

Here’s the next best thing to being there—a link to the video about the Kit Carson Carousel. Click here to view it.

— Mary Brenneman

——— WP ———

I am so glad you put all these wonderful comments in one place! I love hearing what other members have to say, and sometimes their thoughts point me to an article that I might not have otherwise read. Hope you make it a regular feature.

— Alison

——— WP ———

Barbie’s turning 50 and a number of you commented on Sandy Stuart’s story on Barbie’s birthday.

I am a collector too, and I hope Barbie stays around for a long time for other generations to enjoy. I still have my Barbie from 1969. My granddaughter also loves to play with Barbie. I have started a collection for her.

— Debra

Personally I think that Barbie should be retired. The vintage dolls would escalate in value on their own merits. Barbie is doing a burnout and it shows.
Thank you and good-bye Barbie.
I am a collector with lots of Barbies, but only #3`s.

— Mary

——— WP ———

Worthologist Christopher Kent’s story of a pint-sized antiques expert also garnered a number of comments including some from his fellow Worthologists.

Oh the adrenalin of the chase, and my you found a corker.
What happened to the cobra in the end, and is that gifted child still in the business?
You have a way with words, and have perhaps missed your calling. More please!

— Maria

——— WP ———

Hello Chris, Great article! I look forward to your articles, knowledge mixed with a bit of wry humor. I will do my best to emulate you! May I ask…who is this mysterious and precocious 7-year-old?

— David Mycko, Worthologist

——— WP ———

Christopher added this postscript to his story.

It is with great sadness that I report that after 71 years in operation Merritt’s Antiques will be closing their doors as of May 2. With a possible on site auction of the remaining contents. The reason, reports general manager Randy Westley, ”It’s not just the economy but it’s difficult to find good antiques.” The company will concentrate on its internationally known clock shop as well as the doll segment of the business. It is indeed the end of an era and the passing will be mourned by many.

— Christopher Kent, Worthologist

——— WP ———

Another Christopher Kent article, “How To Clean Silver–Buyer Beware,” brought this question from a Ina.
I purchased some 1847 Roger’s Brothers flatware to replace some missing pieces. Unfortunately the seller had “dipped” the pieces and the detail has lost much of its color.
Can that be replaced?

— Ina

——— WP ———

About Sandra Lee Stuart’s story, “What’s Hidden in Your Attic?“, a reader wrote about some of the oil paintings she had inherited.

I inherited many framed oil paintings of southern settings by Georgia artist, Pamela Renfro. They are typical of her work in that they are well executed, nostalgic depictions of country homes, stores and landscapes with great detail including animals, quilts, antiques, etc. I believe they were done in the late seventies and early eighties, before her work was commissioned by Coca Cola and other corporations.

I have been unable to find her work for sale anywhere on the Internet and wonder how to price the paintings for sale.
Do you have any suggestions?

— Katherine

——— WP ———

Writers also wrote in with comments about two of Worthologist Fred Taylor’s articles including this one from Pete about using a cupboard for a stereo cabinet.

Mr. Taylor, I had not thought about using my family’s older furniture for anything other than what it had been intended for. You gave me a great idea on how to use an old cupboard for my stereo equipment. Thanks for the insight.

— Pete

And in response to Fred’s article on locks, Ken wrote about an old china cabinet that he can no longer unlock.
Thank you for this wonderful article! My wife and I have an old china cabinet with a full mortise lock. It has worked fine for a few years, but now the key will not open the lock. The key is notched. As the key is turned, it seems to get stuck before it engages the bolt. Based on you terrific diagrams, I would guess that the security ring may have been bent slightly and that this denies the key the ability to turn fully. Is this a reasonable guess in your opinion? Do you have any suggestions as to how we may overcome this problem? Thanks again for the article.

— Ken

——— WP ———

Our latest fly-fishing video by Worthologist Steve Ellis received this comment about selling chewed up in poor condition fishing lures. Fred’s response is interesting too.

Garage sale time just around the block!
I’ve sold the chewed up missing eye, rusty hook lures to artists. Buy em cheap and sell em cheap… the lady’s love them. Your going to pay for better lures there are so few around. He’s right about the word “MINT” with lures… I think of it as “Un-fished” with the BOX and Label. Garage sale time just around the block!

— PickerBrad

——— WP ———

And finally on one of Comic Book Worthologist Matt Baum’s articles, we found this sad question from one of our readers. Do any of you have advice for Travis?

I just lost 100s of old comics in a fire. I didn’t have issues listed and saved for protection. How do I place a value on them for insurance purposes?

— Travis

——— WP ———

What’s On Your Mind – March 5, 2009

On Linda Stockwell’s story on Mary Alice Hadley pottery, one writer is looking for seconds—those less-than-perfect and therefore less-expensive items.

I am seeking “seconds”… there used to be a source in Oconomowoc, Wisconsin where I could purchase Hadley pottery ware at a discount price. If these sources are still available, please direct me to the nearest one. I live on a farm; I do not collect this dinnerware as an investment; I use it for everyday enjoyment. I have no concern for rejects due to color, mismatch or small chips. Thank you,

—Mari

——— WP ———

Worthologist Chris Hughes wrote back to a reader who commented on his story on the good old days of antique collecting, which to Chris are the late 90’s!

Carol,
Thank you for reading. I agree that a deal can be had when bartering in a shop with a dealer, but I’ve also found that online dealers create opportunities for a bargain. Two weeks ago, I bought an item online that was unknowingly priced at least 2/3 below market value. There are deals to be had everywhere, especially in this economy! I also like to recall the items that got away because it keeps me charged up, hoping to get a second chance if a comparable item pops up.

–Chris

——— WP ———

James Taylor’s article, “Your First Coin Show? Eight Tips for Success,” garnered a number of comments, including this one from an appreciative reader. James is the president of ANACS, the oldest coin grading service in the United States.

That helps me a lot. I have many vintage silver coins, which were in my great-aunt’s estate, we didn’t want to sell them but with these economic times my grandpa really needs the money. Appreciate the info.

——— WP ———

“Simply put, people aren’t going to buy collectibles from athletes with tainted numbers,” says writer Eric Brantner in his article on Alex Rodriguez collectibles. One reader wrote:

Let’s just see what A-Rod does this year. He is one of the best players to ever play the game, with or without steroids. You can blame the players, but I would blame the amount of money these players are getting for all the steroid use. If there were a cap on what players could make, like $1,000,000, players would stay with the team that drafted them and would not take all these steroids. A-Rod has had some great years with the Yankees while not taking steroids, so just how big of a part did steroids really play in his numbers?

—Tim Meyer

——— WP ———

Worthologist Liz Holderman wrote back to two readers who commented on her series of articles on collectible book terminology.

Ron: You are right, book terms are often used loosely and interchangeably, which is why they are sometimes so confusing. Technically, “hinge” is supposed to refer to the inside junction of the spine with the binding and “joint” to the outside. But many sellers don’t make that distinction. “Gutter” (another duplicitous term) can either refer to the outside indention made where the boards and spine are joined (like a bowling gutter), or the inside indention where two facing pages meet.

Jacqueline: Thanks for your excellent response on the definition of “tipped in.” Part V of this series will cover illustrations and that is one of the terms that will be discussed. I’m thrilled and impressed to learn that the Boy Scouts have a merit badge in book binding! Book repair is always an option of course, and it can save a beloved book for shelf value. I had an old family bible fully restored for just that reason (although it was very expensive). If important pages or the covers are missing, restoration will not improve the retail value very much, but it can certainly bring new life to a family heirloom.

——— WP ———

Sharon Maxwell-Yamamoto, our Vintage Clothing Worthologist, is an opera singer who enjoys her glamorous vintage furs. When she paid good money to a furrier for a repair that she found inadequate, she decided to do repair it herself and she’s sharing what she learned with our readers. Perhaps it is our less than robust economy, but her article “How to Repair Vintage Fur Yourself” that is bringing out the DIY attitude in many of our readers

Dear Sharon, Thank you so much for generously sharing this information! I am just beginning to use fur and would appreciate any other information or ongoing email exchange with you. I have purchased two eBay furs that need some work and the furrier has gone out of business so I am on my own. I have many years of experience sewing… but not on fur. Can you recommend any books, pre”fur”ably with detailed pictures? Again, thank you.

—Thula

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With banks closing, fraud investigations of financial entities, major companies threatened with bankruptcy and stock prices on the decline, investors are looking for safe alternatives. This week gold jumped to $967 an ounce, the highest since July 17, 2008. Collecting gold items and coins is looking more and more to be a viable investment alternative.

James Taylor, CEO and president of ANACS, American’s oldest coin-grading service, says his business is up 20-30 percent. “People are not only collecting gold, but they want to know its value. It’s not just the new collectors, but people who have been collecting for decades are sending us coins for authentication, grading and attribution,” Taylor said.

With a community of collectors around the world, we’re interested in knowing if you currently view collecting as an investment. Do you consider investing in collecting art, antiques or collectibles an alternative to the stock market? Would you share your strategy with the rest of us?

To start the conversation, we’ve gathered some of the comments from WorthPoint’s Linkedin page for Antique Investors, Sellers and Fans.

“It’s always been something my parents did, I just do it naturally. Been buying anything silver since forever. Gold too! Even if it isn’t great looking, I always figure that one day I could scrap it for more. My Dad was big into scrapping gold and silver. It was like his side hobby! Art is also a decent investment, and some paintings and lithographs cannot only go up in value, but can be passed along in the family for enjoying until there is a need to raise funds.”
Lynne

On WorthPoint’s Linkedin page for Antique Investors, Sellers and Fans

“I joined eBay in 2003, primarily to purchase underpriced, quality scrimshaw. As of this month, eBay prohibits the listing of ALL ivory, including antique scrimshawed whale teeth. I have other sources, but eBay was by far the most fun, and the easiest to monitor.

“I consider my collection to be my personal IRA (Ivory Retirement Account). Most of my scrimshaw is posted on WorthPoint.com, divided into several different collections. Descriptive and historical text is posted with each item. Will Seippel recruited me to become WorthPoint’s scrimshaw Worthologist. My WorthPoint ID is ScrimCollector.

“I believe the knowledgeable acquisition of antiques will outperform traditional stock investments. And it is a heckova lot more fun!”
Douglass Moody, sole proprietor at TradeWinds International

On WorthPoint’s Linkedin page for Antique Investors, Sellers and Fans

“I have to admit that I invest in antiques as opposed to the traditional investment vehicles. I probably average a return of at least 60% if not much more. My IRA, on the other hand, lost 67% this year.

“I did very well this year on my platinum and gold. I lost my job in October and have been very well subsidized through my antiques. My collection is nearly gone, but it can be rebuilt once I have an income.

“I decided long ago that I would be better off with antiques than stocks. The best thing is that I can enjoy them and share them while I have them. No one is in the least bit interested in seeing a portfolio, but they do get a kick out of the antiques.

“The first time I had to sell things off was heartbreaking. The second time was annoying. The third time I was happy that I changed my approach and considered them as investments, which meant that I had to be more careful and knowledgeable about what I bought and at what price I bought it.”
Doug

“Yes, in the past 10 years carefully acquired fine antiques purchased at conservative prices have grossly outperformed the Dow, S&P, gold and silver markets. Of course, your average savings bank account most likely also outperformed my 401k plan (my wife calls it our 201 kaka plan).

“Many years ago as a kid working for Max Vas, the well-known Madison Ave dealer, he used to say ‘It’s always a good time to SELL antiques, or to BUY antiques . . . but it’s never the SAME time.’ I didn’t understand this back then, but after several cycles consisting of several years of hot sales (money chasing after merch) and no sales (product chasing after buyers), I am currently BUYING QUALITY antiques at REASONABLE prices for FUTURE sale.”
Steven

WorthPoint—Discover Your Hidden Wealth

So what makes that copy of the Avalon Hill “Dune” board game that turned up at an estate sale or the local charity thrift more valuable than a pile of “Star Wars” and “Star Trek” board games from the 1970s?

Dune

There are a number of factors involved in what makes a hobby board game valuable. Being able to identify a worthwhile, desirable board game can empower the dealer to price such an item more appropriately while enabling the buyer to determine if a price is fair or not.

Because most aftermarket hobby-board games are bought to be used as practical, playable items, a few key factors serve to determine value—I call them the “Five Cs” of evaluating a hobby board game’s worth.

• Criticism—Hobbyists are very aware of critical opinion and assessment of hobby games, and certain titles that have a longstanding reputation for quality or design significance, such as “Cosmic Encounter,” “We the People” and “Up Front,” command higher prices than poorly regarded or rarely played titles.

Cosmic Encounter

A simple Internet search for reviews of a particular title will likely provide a good idea if a game is in demand among hobbyists. Most laymen outside of the hobby may be unaware that critical evaluation of board games even exists. Nonetheless, it absolutely behooves appraiser and buyer to understand that games, as an authored medium, command critical attention from those within the hobby community. Simply put—good games are worth more money.

• Commonness—If the game is long out of print, then value naturally increases. Because of the age of many hobby games and the fact that many smaller publishers and boutique manufacturers produced relatively small print runs, some games are extremely rare. Further, if the game was never available domestically, it could carry an even higher value. If the game is seldom seen in online auctions, then it will also tend toward a higher price due to a lack of supply. Exceptionally rare games, such as 3M’s “Jati” or Ludoliere’s “Full Metal Planete,” can command prices upward of $300 based on their extreme rarity alone.

Jati

• Completeness—Most hobbyists will purchase a game with intent to play it, so making sure that every piece is present is essential. That being said, some incomplete but component-dense games, such as Milton Bradley’s early 1990s game “Heroquest,” will often be bought below assumed market value as a “parts set” to complete another incomplete game. Most hobby games will include a manifest of components in their rulebooks with which a prospective buyer or seller can audit its contents and identify any missing components. Component lists and photographs are also widely available on the Internet for most hobby games.

• Condition—Box condition is significant, and since games are principally paper and cardboard, many of the barometers of condition for those materials apply. Cards can be damaged, boards split at the creases and plastic figures broken. Moldy, stained or torn games tend to be valued lower but may still be quite desirable. With the advent of PDF scans and downloadable content, some hobbyists will accept less-than-perfect copies if they can find adequate replacements for damaged components online.

• Currency—Popularity of certain games rises and falls in the hobbyist community. There are a number of factors that drive a game’s relative currency. For example, if at a large game convention, there is widespread play of a game such as “Dune,” then prices at online auctions may spike while availability declines as copies are snatched up by interested parties. Likewise, if a game is the topic of current discussion or debate at one of the online community forums, the value can increase or even decline.

Older game reissues affect value of originals

Currently available or scheduled reprints and reissues of older games also directly affect value as modern publishers have discovered that making older games available again can be quite profitable—but not for those selling the original editions on the secondary market. When Valley Games reissued the highly regarded “Hannibal: Rome Versus Carthage” in 2007, average online prices for the original Avalon Hill edition plummeted from $200 or more down to less than the retail price of the latest edition—$60.

There is a lot of hidden value to be found in the hobby-gaming market. Tapping into it does require a little more research and awareness than typical when valuing an old TV-show board game or an early edition of a popular favorite. It falls on sellers and buyers to become more educated and aware of how this particular niche stands apart from mass-market board games in order to tap into it.

WorthPoint—Discover Your Hidden Wealth

The simple truth is people love the All-Star game. In fact, they come from all around the country to watch it. I remember just a few short years ago when it came through my hometown of Houston. The streets were crowded, and there were celebrity sightings in every restaurant and club downtown. You would have thought the Super Bowl was in town, not an exhibition game.

2009 Starting Lineups

Every year, the starting lineups are chosen by fan voting. The players with the most fan votes at each position start the game. What follows is a list of the starting lineups and my favorite collectibles for the 2009 NBA All-Star Game.

WESTERN CONFERENCE

Yao Ming—Due to his large fan base in China, you can always expect Yao Ming to be voted the starting center in the West. But don’t interpret that as Yao not deserving to be there. The truth is Yao Ming is the most dominant center in the West right now, and if he can find a way to stay healthy, he could have a Hall of Fame-worthy career. Now is the time to buy Yao collectibles because the more All-Star nods he gets, the more valuable his collectibles will be. You can still find autographed Yao Ming jerseys for just a few hundred bucks.

Amare Stoudemire—The 2009 All-Star game will mark Stoudemire’s fourth appearance in the midseason exhibition. Ever since being named Rookie of the Year in 2003, Stoudemire has been improving steadily. Stoudemire collectibles are actually still moderately priced, meaning now could be a great time to invest in some of his pieces.

Tim Duncan—Mr. Fundamental. His game isn’t pretty, and he can be pretty boring to watch, but the bottom line is Tim Duncan produces year in and year out. He’s quietly won one MVP award, three NBA Finals MVPs and even an All-Star Game MVP. If you look hard enough, you can find Duncan memorabilia at reasonable prices. It’s not too late to invest as there’s little doubt Duncan will be a Hall of Fame inductee after he retires.

Kobe Bryant—What can I say about Kobe that hasn’t been said before? Love him or hate him, Kobe has been the best player in the league for the past several years. If you haven’t invested in his collectibles by now, you better have some deep pockets if you want any. Kobe’s collectibles are always in high demand.

Chris Paul—When I think about the future of the NBA, Chris Paul immediately comes to mind. Heck, forget the future, his time is already here. The Hornets point guard is just 23 years old, and this will be his first All-Star Game start. In his short time in the league, Paul has earned a Rookie of the Year award, first team All-NBA and All-NBA Defensive team. His collectibles are already rising in value (signed jerseys go for $700), but they’ll only get more expensive as this youngster continues to light the league on fire. Get his memorabilia while you can still afford them.

EASTERN CONFERENCE

Dwight Howard—Perhaps Dwight Howard’s most notable moment came during All-Star weekend last year. His insane Superman dunk during the Slam Dunk Contest was in every highlight reel imaginable. Like Paul, Dwight Howard is just 23 years old, and he is the future of this game. His collectibles are as yet very reasonably priced (autographed jerseys sell for around $400), so you can still invest in this rising star.

Kevin Garnett—I don’t have to tell you that Kevin Garnett is good. If you’ve watched basketball at all over the past decade, you know KG is an absolute beast. And now that he has an NBA championship on his résumé, there’s little doubt about his greatness. Since he’s already established himself as an elite player over the course of several years, Garnett’s collectibles are fairly expensive. However, you should consider that the chances are good that he will add at least one more NBA Championship to his stellar career, and he’s a likely Hall of Famer.

LeBron James—Remember what I said about Kobe earlier? The same goes for James. He’s great, and his collectibles cost a fortune.

Allen Iverson—Despite the controversy that seems to follow him—are we talking about practice?—Iverson has always been a fan favorite. This will mark his 10th appearance in the All-Star game. In fact, Iverson already has two All-Star MVPs under his belt. Because of his popularity with the fans, Iverson’s collectibles are always in high demand. That’s why I think it’s not a good investment move to purchase his memorabilia. Frankly, he’s on the downside of his career, and I feel his collectibles are a bit overpriced.

Dwyane Wade—Because of his injuries last season, a lot of people forget that Dwyane Wade was an NBA Finals MVP just a few short years ago. Even though his collectibles are fairly expensive, now could be a good time to invest. Wade is coming off an injury, and he’s on a team that doesn’t have a real shot at winning a championship anytime soon. This could be a nice recipe for getting Wade’s collectibles at a bargain price.

Are you going to watch the All-Star game? Tell us about your favorite players and collectibles in the replies.

Eric Brantner is a sports fan and freelance writer living in Houston.

WorthPoint—Discover Your Hidden Wealth

What is a licensed board game?

Chances are you’ve seen plenty and probably played several in your time. They’re the board games festooned with characters and imagery from television shows, movies or other entertainment media. Whether it’s “Hopalong Cassidy,” “Dick Tracy,” “The Six Million Dollar Man,” “Fantasy Island,” “Pac-Man,” “Desperate Housewives” or “Disney Princesses,” licensed games have a long history as examples of cross-marketing successful properties into different entertainment formats—often for a quick cash-in on what’s momentarily hot.

Pac-Man

Sadly, most of these games are completely terrible, representing little more than a crass and condescending attempt to milk a couple of extra dollars out of popular trends with little regard to building an interesting or worthwhile game around them. Most of these games are among the simplest, most basic designs possible—roll a die, move a pawn, pick up a card or spin a spinner with appropriate photographic stills or illustrations that attempt to contextualize the crude game play. But does it really make sense for four players to all represent Batman in a “Batman” board game?

Of course, some licensed games can carry significant value for collectors focused on items representing particular characters, shows or films regardless of the quality of play the games offer. But even though I am a huge fan of the films, “The Dark Crystal” and “The Nightmare before Christmas,” I know that their respective board games are total dreck in terms of game play. I do not even want them as collectibles since my gaming dollar would be better spent elsewhere.

However, over the past couple of years, hobby-market publishers, such as Fantasy Flight Games, working outside of mainstream channels have released very successful games based on current and perennially popular licenses. These include “Lord of the Rings,” the “World of Warcraft” video games and the new “Battlestar Galactica” series that are actually great games far removed from the crude game play of the licensed games of the past. I even rated “Battlestar Galactica” one of the best games that I’ve ever played. It is a masterpiece of game design that also happens to be about one of my favorite television shows.

Battlestar Galactica

This current crop of licensed hobby games is not only a great opportunity for fans and collectors of particular properties to extend their enjoyment of them but also represent good investment potential. Licenses will eventually expire meaning that publication of some of these games will cease.

Of these more recent licensed games, in particular titles like Avalon Hill’s “Star Wars Episode I: The Queen’s Gambit” (a much better game than you would ever imagine given the movie) and Fantasy Flight’s recently out-of-print “Marvel Heroes” game based on the exploits of Spider-Man, the X-Men and other favorite comics characters will, I believe, see significant increases in value in the coming years. “Star Wars: Epic Duels,” released by Hasbro in 2002, met with good notices in the hobby community yet was inevitably found on the clearance shelf at most retailers for as little as $5 once the marketing blitz for the second prequel film subsided. Now, secondhand copies of the game pull in between $75 and $100, and with practically no chance for a reprint, those prices will likely remain constant or increase over the next few years.

Star Wars: Epic Duels

Licensed games are a good bet for collectability as long as you are looking at the right ones. Skip the faddish ones you see on the shelves of the major retailers, and look toward the hobby publishers for great games based on great licenses.

Remember that a licensed game from a hobby publisher might see a print run of 10,000 copies compared to the millions of copies that might circulate for a “Monopoly” game with licensed characters. And if you’re a fan of some of these properties, you might find that the biggest return on investment you’ll get from one of these games is a great evening of entertainment with friends, family and fellow enthusiasts.

WorthPoint—Discover Your Hidden Wealth

“You must lead such an interesting life finding and dealing in such beautiful things, traveling to so many fascinating places.” I’ve actually heard this from overly well-dressed people at benefit auctions where the plate of chicken is going for a thousand dollars. Of course, under the circumstances, I agree with them. Reality simply would not be appropriate to the setting. Reality rarely is.

Most days in the business are spent doing appraisals of less-than-stellar collections; making calls to collectors; attempting to sell a perfect Louis X1V bombe commode cajoled from a private collection only to find that the client is stalling on the purchase because his horoscope says he needs to be circumspect about acquiring things.

Tonka tedium relieved

One day, sitting in my overstuffed office, there’s a knock on my door. I get up from my desk where I have been glued to my laptop cataloging a collection of 400 Tonka Toys and find on the other side of the threshold an unassuming person shouldering two large paintings. It’s one of those “I was in the neighborhood, and you were recommended” situations that frankly, under the circumstance, I welcome.

The paintings, as it turns out, are good. The subject matter appears to be a husband and wife, done in a painterly fashion—painterly meaning the artist knew something about painting—following the 19th-century portrait-painting tradition. More importantly, the subjects are interesting, attractive and for those without ancestral portraits, would make a stunning addition to the dining-room walls.

Documentation: The appraiser’s joy

And, even more importantly, the bearer of the portraits has documentation about the artist and to some extent, the sitters. Now, this is the time when that cachet thing bears fruit. Another point that makes the life of the appraiser so much easier is the paintings are signed. Many people don’t know that most 19th-century portraiture was not signed. Appraisers make an educated guess based on style and the tradition of the painting as to whom may have painted it, and sometimes an attribution is impossible.

My assessing eye sees that the paintings’ condition is generally good. One has a small hole, but that is something a conservator can easily repair without devaluing the painting. The paintings are dirty, meaning the varnish has darkened with age, but that can easily be remedied. They appear to be in their original frames, another good thing. There is, with a cursory examination, no overpainting, meaning no one touched up the original painting either to enhance—by enhance, I mean to make the sitters appear younger by the removal of a few wrinkles or jowls, or richer with the addition of more jewelry—or repair damage that occurred in the 100-plus years the paintings have been around.

Sherlock appraiser

Now, here is when my job becomes fun, and yes, the words of the well-dressed lady at the benefit auction ring true. There is a certain intrigue in the process of authenticating that requires the sharp eye and instinct of the well-seasoned detective. We sometimes have to dredge through weighty Dead Sea Scrolls to get the information that we need. The Internet is useful and sometimes invaluable but can also be limited. We as appraisers have to go beneath the printed word to find additional links that will give us the information we need to make the declarative pronouncement.

People, to old paper guys like me, are invaluable. Documentation in and unto itself is sometimes as apocryphal as some of the “true” stories applied to certain pieces. “Oh, yes, these waffle irons belonged to George Washington, and he used them himself only on Tuesdays in leap years.” Hmm.

Paintings are real deal

After a few telephone calls to substantiate the documentation, all, as they say, was revealed. These paintings were the genuine article.

The artist, Theodore Pine, is a known quantity. His paintings hang in public and private collections. He is listed in all the important books. There are 2,000-plus links to him on the Internet. And although there are no recent auction reports to establish value, there is enough documentation to legitimize a perceived value on the portraits.

The portraits’ subjects, the Rev. and Mrs. George S. Hare DD, were prominent members of their community, and it was the tradition of Theodore Pine to paint people on the rise and of distinction. He came from a long line of artists. His grandfather, Robert Pine, was both artist and engraver. James Pine, his father, exhibited at the National Academy of Design from 1839 until 1857. Theodore, at 19, held his first exhibition at the National Academy in 1847 and continued to contribute through the 1880s.

Pine portraits in Ossining, home of Sing Sing

Many of Pine’s portraits are in the permanent collection of the Ossining (N.Y.) Historical Society Museum. Pine’s most famous portraits are dramatically different.

Rev. and Mrs. MacFarlan

Two are of the Rev. and Mrs. Daniel MacFarlan. They are richly dressed and seated in front of silver birch trees. A village dotted with white buildings is off in the distance, boats sail on the river, and the sky is turbulent and misty.

Typical of when the MacFarlan paintings were done (1857), embellishment of detail usually was in keeping to the fee. If you wanted your house, farm and prized bull in the painting, you paid extra. These paintings are excellent examples of American portraiture and justifiably deserve to be in the permanent collection of the Metropolitan Museum of Art in New York.

Pine’s other famous painting is the posthumous portrait of Gen. Robert E. Lee, which hangs in the chapel of Washington and Lee University in Lexington, Va.

Pine portrait of General Lee

Pine’s body of work not only included portraits but allegorical themes, landscapes and architectural studies in the style and tradition of a well-traveled artist. There is a school of thought within the appraising community that specializes in American portraiture that Pine is not of the first water. I disagree. There is a demonstration of a smooth style that incorporates skill without the need for artifice and tricks, and captures the personality of the sitter with a directness and candor separate from the stylized painting traditions of the day.

To appraise or not to appraise?

This begs the question. Should you have your paintings appraised? The answer is yes if the painting warrants it, remembering that an appraisal is usually done for insurance purposes and/or to establish resale value. With the Pine portraits, to be considered were their restoration, cleaning and securing the damage of the canvas, along with establishing a value. You might ask whether restoration potentially devalues the painting. The answer is only if an inferior conservator does the work, and even then, that can usually be repaired.

Okay, now for the proverbial drumroll, the time to put an appraised value on the Pine portraits. All documentation had been done. Other considerations were taken into account such as the sale trends of such paintings. And my final verdict?

The pair of Theodore Pine portraits of the Rev. and Mrs. George S. Hare would be appraised for $20,000 to $25,000.

It was a good thing I was in my office that day.

– Christopher Kent is a member of the WorthPoint board of advisers and director of evaluations for WorthPoint. He is also an antiques and collectibles generalist, fine-arts broker and president of CTK Design.

WorthPoint—Discover Your Hidden Wealth

First, copy them. Until recently, I always suggested photocopying. Today, I recommend scanning.

When copying the letters, make certain to keep the envelope and letter together. Individuals have a bad habit of taking letters out of envelopes and placing them in different piles. An accurate remating is very difficult. The envelope is a vital part of the document, especially for wartime letters.

Second, before making copies, determine how many are needed. Copies should be made for all surviving children. You may want to include grandchildren. Do not forget to copy wartime photographs and other memorabilia associated with the writer. The cancellations and dates tell a separate story.

Consider sending a copy to your local county historical society and library, state historical society and library, the library of the college or university where he attended (if applicable) and any military museum devoted to his unit or command. World War II letters currently are a hot research topic.

Third, once the copies are made, store the letters properly. Old shoe boxes, wooden boxes or plastic envelopes are not acceptable. Go to your local art-supply store or an Internet site such as university products.com that sell archival supplies. Your needs are simple. Do not overspend.

Buy a ream of archival paper, which is paper made from plant rather than wood-pulp fibers, to place between the letters, the pages if a letter contains multiple pages, and letters and envelopes. This prevents ink bleed resulting in ghosting. The second item you need is an acid-free box or boxes to store the letters. Paper size determines box size.

Fourth, unfold the letters. Do not attempt to iron or fold back the creases. Lay the letters on top of each other, and allow time and the weight of the pile of letters to lessen the folds.

Fifth, develop a notation system for indicating parts of a letter, e.g., multiple pages and/or the envelope. Put the notation on the bottom left corner using a soft-lead pencil.

Sixth, when you have copied and preserved the letters, transcribe them. Some handwriting is difficult to read. Copying makes this more difficult. The information is important. Again, send copies of the transcriptions to the appropriate research institutions.

Finally, seventh, use the letters as the beginning of a research project to document the writer’s military service. Make the letters come alive.

—————————————————————————————————————–

Rinker Enterprises and Harry L. Rinker are on the Internet. Check out his Web site.

You can listen and participate in “WHATCHA GOT?,” Harry’s antiques-and-collectibles radio call-in show on Sunday mornings between 8 a.m. and 10 a.m. Eastern Time. If you cannot find it on a station in your area, WHATCHA GOT?” streams live and is archived on the Internet.

“SELL, KEEP OR TOSS? HOW TO DOWNSIZE A HOME, SETTLE AN ESTATE, AND APPRAISE PERSONAL PROPERTY” (House of Collectibles, an imprint of the Random House Information Group), Harry’s latest book, is available at your favorite bookstore and via Harry’s Web site.

Harry L. Rinker welcomes questions from readers about collectibles, those mass-produced items from the 20th century. Selected letters will be answered on this site. Harry cannot provide personal answers. Photos and other material submitted cannot be returned. Send your questions to: Rinker on Collectibles, 5093 Vera Cruz Road, Emmaus, PA 18049. You also can e-mail your questions to harrylrinker@aol.com. Only e-mails containing a full name and mailing address will be considered. Please indicate that these are questions for WorthPoint.

WorthPoint—Discover Your Hidden Wealth

Last August, the Association of Certified Fraud Examiners (ACFE) reported the results of its survey on occupational fraud and abuse. According to its findings, U.S. organizations lost 7 percent of their annual revenue to fraud! How sad.

The study found that check tampering and fraudulent billing were the most common small-business scams. Check tampering accounted for a quarter of small-business frauds, making it much more common than in larger organizations. Check tampering commonly occurs in situations where duties related to the cash-disbursements function are not separated. No one person should be in of charge of okaying payments, signing checks, recording payments and reconciling bank statements.

Ways to stop fraud

We recommend that small businesses take several steps to identify and prevent fraud that can add up to big losses. These steps are:

1) Instituting internal controls to prevent and detect fraud.

2) Fostering a company culture that does not tolerate unethical behavior.

3) Developing and distributing a written code of ethics for management and employees.

4) Training employees in fraud prevention. This would include teaching them the tell-tale patterns and signs of fraud.

5) Setting up procedures for reporting suspicious activity by customers and co-workers.

6) Regularly reviewing high-risk areas such as bank statements and inventory.

Everyone in the company should learn preventative techniques. After all, everyone from the stock boy to owner is harmed when a company loses money because of theft.

Unfortunately, we are in a deep and long recession. I expect to see an increase in small-business fraud.

– Jim Sturgill is a director of WorthPoint and founding partner of Sturgill & Associates LLP, a D.C. and Baltimore area CPA firm.

WorthPoint—Discover Your Hidden Wealth