Commemorative Banknotes - What you need to know?

Unless you have been buying or selling banknotes, in other words have experience in the banknote market on eBay, you may end up paying over the odds for a commemorative banknote after taking postage costs into account.

Whether you are collecting them or making a profit, you may find the information below useful.

The Facts

1. Commemorative banknotes are printed in limited numbers. The ones in presentation packs are even more scarce, often commanding higher prices.
2. Every time a new commemorative banknote is launched from the issuing bank or central bank, a lot of sellers buy them in presentation packs or obtain them in branches of the same bank or a retailer selected by the issuing bank or central bank. Then they list them onto eBay in hope of making a massive profit and they usually do if they set the price, or the starting price of an auction, is right. This is because demand exceeds the supply for commemorative banknotes so that the market price on eBay is far higher than face value of the commemorative banknote. In the case of banknotes in presentation packs, the price is higher than the normal selling price from the issuing bank. Generally, the high demand for commemorative banknotes lasts for at least a few months.
3. Usually after one year from the date of issue, the market price on eBay is lower than the market price on or just after the date of issue. Quite often you can buy one in perfect condition for just slightly higher than the face value of the banknote after postage costs are taken into account. In the case of presentation packs, the price including postage costs are a little bit higher than face value. This is the ideal time to buy commemorative bank notes. In other words, it often pays to be patient to get hold of one.
4. After that period, the market price of the commemorative banknote generally rises over time keeping up with inflation. Inflation means how fast the price of goods and services go up generally over time in a country. In the case of commemorative banknotes in presentation packs, the market price generally rises a lot faster than inflation. Collectors who possess them stand a good chance of making a good profit margin in real terms (after taking account of inflation). This is because the supply of commemorative banknotes falls over time and the demand will generally rise, due to its popularity to collectors.

Examples of commemorative banknotes

• The Royal Bank of Scotland plc EU Summit £1 note
• The Royal Bank of Scotland plc Alexander Graham Bell £1 note
• The Royal Bank of Scotland plc Scottish Parliament £1 note
• The Royal Bank of Scotland plc Royal College of Surgeons 500th Anniversary £5 note
• The Royal Bank of Scotland plc Old Tom Morris St. Andrews Royal & Ancient Golf Club 250th Anniversary £5 note
• The Royal Bank of Scotland plc Jack Nicklaus £5 note
• The Royal Bank of Scotland plc Queen Mother's 100th birthday £20 note
• The Royal Bank of Scotland plc Golden Jubilee £20 note
• Clydesdale Bank plc 2006 Scottish Commonwealth Games £10 note
• Clydesdale Bank plc Millennium £20 note
• Clydesdale Bank plc Glasgow UK City of Architecture and Design £20 note
• Bank of England 1997 Hong Kong hand over £5 note (presentation pack only)
• Northern Bank Millennium plastic £5 note (MM prefix for normal and Y2K prefix in presentation packs)
• States of Jersey 50th Anniversary of Liberation £1 note
• States of Jersey 800th Anniversary of English Rule
• States of Guernsey Millenium £5 note
• Ulster Bank Ltd George Best £5 note
• Bank of Ireland Bushmills Distillery £5 note
• Bank of China (Hong Kong) Ltd Beijing Olympics HK$20 note and Bank of China Ltd Macau Branch 20 Macau Patacas note (presentation packs only)
• Radiant Joy (Single Note from Hong Kong) at HK$138 (1)
• Golden Lotus (Single Note from Macau) at MOP88 (2)
• Triumphant Spirit (4 in 1 Uncut Notes from Hong Kong) at HK$338 (1)
• Brilliant Jubilation (35 in 1 Uncut Notes from Hong Kong) at HK$1338 (1) 
• Harmonious Union (1 of each) at HK$268 (1)
• United Pleasure (4 in 1 Uncut Notes each from Hong Kong and Macau) at HK$868 (1) 
• People's Bank of China Beijing Olympics 2008 10 RMB (Renminbi or Yuan) note

For pictures of these banknotes, go to the International Bank Note Society website which is www.theibns.org and click on the appropriate links. Please note that the images of Bank of England notes are not available due to their request.

For example

When the Jack Nicklaus £5 note was released on 14th July 2005, sellers listed them in Scottish/Northern Irish category in large numbers. Often the pages were literally full of these banknotes (can be annoying for those who want to look for different banknotes in the same category). Due to its popularity, there was very high demand for them. So the market price for Jack Nicklaus £5 note was well above face value. Most of the time, sellers made huge profit margins.

One year later, market prices for Jack Nicklaus £5 note has fallen to just slightly above face value generally. There are some sellers who list them at very high prices, well above the market price. For example, at £15 for a single banknote in presentation pack. These listings mostly end with no sales, with the only exception of the banknotes being consecutive.

At the time of update of this guide, a lot of sellers are making huge profits from sales of George Best £5 notes. This is an another example in addition to the above.

As of 17th July 2008

Sellers from Hong Kong and possibly Mainland China are selling these sets at prices a lot higher than the Bank of China's issue price (see above under Bank of China (Hong Kong) Ltd). I have seen one at £694.17, see Item No. 140250139638 (Olympic 2008 Hong Kong Limited Dollar note bank set HK). You can see more examples of prices of Beijing Olympics 2008 Hong Kong $20 and Macau 20 Patacas notes. Average prices are around £20 for a single note. I believe that these should be avoided for the time being until a few years later. Then the prices are more likely to be lower.

Exchange rates as of 21/08/2008

£1 sterling = HK$14.5393 (3)

£1 sterling = MOP14.9784 (3)

Remember

It often pays to be patient and you will end up with good bargains.

dedkenny66

Note: Market price mentioned in this guide means market price on eBay.

Source:

1. Beijing 2008 Olympics Games Hong Kong Dollar Commemorative Banknote poster, http://www.bochk.com/images/upload/oce/Olympic_banknote/en/BankNote_EN.html 17th July 2008
2. The Issuance of Macao Pataca Commemorative Notes for the 29th Olympic Games, http://www.bocmacau.com/eng/whatsnew/1d_index.htm 21st August 2008
3. XE www.xe.com 21st August 2008