Gold Rush: People Rush to Sell Gold Instead of Finding It
Let the seller beware when conducting gold transactions through the mail.
March 20, 2009 — -- 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?
"Good Morning America" sent gold to three mail-in gold companies, Cash4gold, the industry pioneer, and two other mail-in companies that we chose at random: Dollars 4 Gold and Get Gold Cash.
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.
So we sent our packets off. A few days later, we started getting checks. Get gold Cash sent us a check for $206 and later raised its offer to $275. Remember, our appraiser said we could get as much as $350 for each packet. The Baltimore-based company later told us it doesn't pay as much as New York buyers do.
Next up, Dollars 4 Gold — and a new twist. The company said some of our pieces were only 10 or 12 karats, even though our state-of-the-art testing showed every one was actually 14 karats. The Dollars 4 Gold offer? $89.71. We asked the company if that was fair, given that our gold had a market value of as much as $350.
"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.
The Scrap Gold Weight Conversion and Melt Value Calculator
Jewelers Vigilance Committee offers tips for selling gold.
