Cashing in gold? Here's the catch.
Last reviewed: November 2009
With the price of gold near $1,000 an ounce, ads offering quick cash for gold can be tempting. You usually drop unwanted gold
jewelry in a postage-paid envelope and a few days later a check is supposed to arrive in the mail. If you think the amount
is too small, send the check back and your jewelry is returned at no charge. Often, we found, the amount may indeed be lower
than you'd expect.
Our mystery shoppers sent identical 18-karat chains and pendants (retail price $175; meltdown value about $70) to three gold
buyers between mid-May and early July. They also took the gold to jewelry stores and pawn shops in Louisiana, New York, and
Texas. The cash-for-gold companies paid 11 to 29 percent of the day's market price for gold; the other venues, about 35 to
70 percent. All the checks arrived a few days after the companies received the jewelry.
What you can do
Before you sell, make sure jewelry isn't antique and therefore worth more intact than melted down. Then:
- Calculate its worth. Note any stamped karat mark, then weigh the piece on a good kitchen scale. Go to the calculator at www.dendritics.com/scales/metal-calc.asp and enter karats and weight to learn the value based on the latest gold price. (Gold is traditionally weighed in penny-weights
or troy ounces; the calculator translates.) You can also check gold's price at www.kitco.com.
- Call several jewelry stores, coin stores, and pawn shops to ask what they pay for gold. If they won't say, don't do business
with them. Because the price of gold fluctuates, call all the stores on the same day. Most gold buyers, including those our
shoppers used, offer more for larger amounts of gold and might negotiate. Try for at least 50 percent of meltdown value.
- Consider gold parties (guests gather with jewelry; a gold- company rep pays on the spot), refiners (look online for smelters),
or online gold buyers (check their standing with the Better Business Bureau).
How much for this?
18-karat gold chain
We paid $175. Companies offered: