We've all seen the ads for companies that let you send in your old gold jewelry and they will send you cash. It's suddenly such a lucrative business that industry pioneer Cash4Gold was able to afford a coveted Super Bowl commercial with Ed McMahon and MC Hammer.
And in this recession, many people are looking for ways to make extra money. So we wanted to know, if you send your gold to one of these companies, will you get a fair price for it?
We assembled three packets of gold and had master gemologist appraiser Don Palmieri and his team at the Gem Certification and Assurance Lab in New York City verify master gemologist appraiser Don Palmieri and his team at the Gem Certification and Assurance Lab in New York City verify that they were nearly identical in weight and that every piece was 14-karat gold. We then double-checked those results at another independent lab.
Based on the karats, the weight and the price of gold that day, Palmieri said each packet was worth more than $410. He said that once buyers had figured in their profit margins, we could see optimum offers of about $350.
We wanted proof that we could get that price, so we went to a store in Manhattan without identifying ourselves. Sure enough, the jeweler there tested our gold and offered us $345 per packet.
"If I was looking to get $350 for my items and I got $89 for them, I would not be happy," said Dan Brauser, president and chief financial officer of Dollars 4 Gold. "We commit to the consumer that if they're unhappy with our payment for any reason, we'll go ahead and send their material back to them, no questions asked."
That leaves Cash4Gold, the biggest in the business. Cash4Gold says it has conducted more than 700,000 transactions since it was founded in 2007 and now employs more than 300 people. We were curious about the company because it has a "D" rating with the Better Business Bureau.
"That means that we have enough concerns about this company that we recommend caution in doing business with them," said Brodie White, president of the Southeast Florida Better Business Bureau (BBB). "We've seen the complaint volume grow, rather than dwindle."
Three-hundred customers have complained about Cash4Gold in the past year, many about the price they were offered. So how much did Cash4Gold offer us? $66.05.
We asked appraiser Palmieri what he thought of that amount. "Wow," he said. "That's incredible. Incredibly low."