The Royal Mint is suffering a backlash after it sent a memo to banks telling them not to accept high-value 'legal tender' commemorative coins over the counter.

Buyers have flocked to the special edition coins in recent years, with many believing they would always be worth their face value, but This is Money readers have hit out as banks have now been told to stop cashing them in.

At the weekend, we revealed on how one reader was left with £29,300 worth of commemorative coins after HSBC, which had accepted them in the past, suddenly refused them.

Special coins: The Royal Mint has been marketing the coins as being 'face value' and 'legal tender' - many will not know what those terms mean

James would buy the coins in bulk on his credit card to garner points, which in turn earned him miles to put towards flights.

However, like many buyers, James didn't realise what the strict definition of 'legal tender' entails and was hit by the Royal Mint's crackdown, which saw a letter sent to banks telling them not to accept the coins.

At the same time, it appears the Royal Mint has been busy updating its website to make it clearer banks and shops are not 'obliged' to take the coins.

But that came after it launched and sold new £50 coins celebrating the Queen's reign in the run-up to Christmas. Coin experts said the Royal Mint has been pumping out increasing numbers of the special coins in recent years.

The Royal Mint told This is Money that it will only accept returns of the coins within 14 days and those who want to sell the coins in the future will have to 'consult with a reputable coin trading agent.'

Our investigation into James' story prompted a furious backlash from readers who felt duped by the coins

One reader, Dekka from Birmingham, commented on the story: 'These coins should no longer be marketed as "face value" or "legal tender".

WHAT IS FACE VALUE? On the Royal Mint homepage, commemorative coins are proudly described as being 'face value.' Many will idly see this as a guarantee that a £100 coin is indeed worth £100. But how can it be if it cannot be exchanged over the counter of a bank? The dictionary definition of face value is: 'The apparent worth or implication of something.' The Royal Mint says: 'The "face value" description used for this coin range refers to the fact that the coins are available to buy for their denomination figure – the figure shown on the coin "face". 'We have taken steps to include the definition on our face value coins page to ensure that the definition is in a place that customers can view it more easily, should they have a query.'

'The Royal Mint can't have it both ways and to continue to use such a description would be a deliberate attempt to deceive the average consumer.'

Another, Tony from Dartford, said: 'I have just bought two £50 coins for my grandchildren celebrating the long reign of Queen Elizabeth.

'The reason I bought them was that I thought they were legal tender and that the price would remain at £50 and as they are limited should go up in value to collectors.

'I would not have bought them if I had known that the coins value relies on collectors.

'No one knows the future and one day they might need £50 in an emergency and now they have to go to do dealers. I feel like I have been conned.'

GamblingJoe, from Salcombe, adds: 'The Royal Mint were/are clearly misleading people with the term "legal tender".'

As part of our investigations, This is Money obtained a letter sent out to bank branches by Royal Mint, dated 5 January.

It says: 'The coins are issued for commemorative purposes only and are not intended to be used as cash.

'Members should not accept the coins at bank branches and customers who wish to return the coins should be referred to the Royal Mint.'

Royal Mint memo: The coin-maker has told banks not accept coins over the counter

A Royal Mint spokesman has since said: 'Under our standard terms and conditions, customers are entitled to a full refund within 14 days, if they are not entirely happy with their purchase.

'Products must be returned to us in as-new condition in their full packaging. If for any reason customers should wish to sell their coin at a later date, we recommend that they consult with a reputable coin trading agent.

'They are intended as collectable items, and are not promoted as investment items or intended for use in daily commercial transactions.

'Again, most people would not wish to trade in a commemorative coin.

'They are intended for collectors and gift buyers, and demonstrate the detailed hand-finished processes and expert skills of The Royal Mint's craftspeople.'

WHAT IS THE SILVER WORTH? What the coin is actually worth, in terms of silver, may also come to a surprise to some who have bought coins. For example, the Buckingham Palace £100 coin is made from 62.86g of 999 silver – or just over two ounces. The 999 aspect is the percentage of the fine metal in the coin, so 99.9 per cent. According to latest data, one ounce of the precious metal is currently trading for $14. So two ounces would be $28 – or little more than £19. The £50 Britannia coin is just over one ounce. It means it is made with under £10 worth of silver.

This means that many, who thought they could exchange the coins in the future for 'face-value' at banks, will have no option but to attempt to sell them to collectors.

It could mean the value of some of the coins, which can cost up to £100, is at the mercy of collectors and rarity of the product.

Previously, a spokeswoman from coinage experts the London Coin Company, said: 'We think the Buckingham Palace coin will just about hold its value - the buzz has gone over £100 silver coins after the previous version which also had 2oz of silver with a £100 denomination.

'The [Big Ben] coin will probably keep its value better as it was the first year, but we would not call either a good investment.

'The first issue, which was the first time they had released a £100 silver coin got collectors interested but it seems the Royal Mint, like others, is launching as many products as possible.

'Products sold from the mintages of most of its products over the last two to three years are way down.'

The Royal Mint adds: 'Legal tender is a concept that can be misunderstood.

'Guidelines have for some time been available, however, we have taken steps to include the definition on our face value coins page to ensure that the definition is in a place that customers can view it more easily, should they have a query.'

Yet, the belated move to clarify these strict definitions means thousands of buyers who already snapped up coins may not have seen what the terms face value and legal tender actually mean.

Cunning ruse: James would bulk buy commemorative coins on his credit card to gain airline points and then cash them in at the bank. Some of his pile of coins is pictured here

Its terms and conditions section on the website describes legal tender as having 'a very narrow and technical meaning in the settlement of debts.'

It adds: 'In practice this means that although the face-value UK coins in denominations of £5, £20, £50 and £100 are approved as legal tender, they have been designed as limited edition collectables or gifts and will not be entering general circulation.

'As such, UK shops and banks are not obliged to accept them in return for goods and services.'

Another commenter on our story suggested that high value coins must be accepted by the Post Office by law as legal tender for purchases. But it turns out this is not true either.

The Royal Mint said: 'As per our previous response, businesses, banks and Post Offices are not obliged to accept the coins as they are not intended for commercial transactions – they are collectibles.