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Considering selling gold? Read this first
Thinking about selling some old jewelry now that the price of gold is way up?
For some extra cash, many have been considering using one of those mail-in “cash for gold” services that are advertised on TV. But are these companies the best option for selling old jewelry and scrap gold?
According to the Washington State Attorney General’s Office, with the price of gold reaching record highs of well over $1,000, ads have prompted millions to sift through their valuables for rings, chains and coins that they are willing to part with. However, the allure of the promised “fast cash” has many hastily submitting items they may know little about to companies they haven’t researched. This has created an industry tailor-made for a recession and a hotbed of opportunity for consumer scams.
By far, the most frequent consumer complaint regarding these services involves a low payout. In fact, there are widespread reports of people sending in hundreds of dollars worth of items only to receive a check for a paltry amount — sometimes even less than $1. Some are reported to have practices in place to make the process as difficult as possible for the seller in hopes that they simply give up trying to recoup the submitted items.
When seeking to trade valuables in for cash, it is imperative to equip yourself with as much information as possible to safeguard yourself in the transaction.
Be informed. First, have the item(s) appraised. While not required by law, reputable U.S. jewelry makers stamp pieces to designate karat level and include the name or trademark of the company endorsing the mark. Going to a jeweler for an appraisal will yield the most accurate results. Scrap values don’t reflect the craftsmanship or antique value. You can find credentialed appraisers at the Web sites of the National Association of Jewelry Appraisers and the American Society of Appraisers.
Shop around. A study by Consumer Reports found that mail-in companies offered 11-29 percent of market value for 18-karat jewelry, while jewelers and pawn shops paid upwards of 70 percent for the same pieces. Because the price of gold fluctuates, call businesses on the same day to ask what they pay for gold. You will not be compensated $1,000 for every ounce of gold you have. That figure applies to quantities of pure gold only.
Keep control. Once you send in your gold to a company, you have surrendered a fair amount of power in the transaction.
If you decide to mail your jewelry, choose a reputable company that offers free insured shipping that you can track online. Provide a detailed description of what you’re sending. Keep a copy of the paperwork, along with photographs of the items.
Unfortunately, once the items are in the company’s hands, there is little for a consumer to do to overcome this information asymmetry other than request the items back.
Seller Beware: Claims such as, “We pay the highest prices!” or “America’s #1 Gold Refiner!” are red flags because they are nearly impossible to substantiate.
And in these tenuous economic times, it is important to remember that selling old jewelry or scrap gold is not a long-term financial solution. While you may be compensated enough to cover a month’s worth of bills, you will not get rich.
Want more consumer advice? Go to www.atg.wa.gov.