The New Spotlight on Cash4Gold
The LA Times today has an interesting story on Cash4Gold, the jewelry-buying service that has made waves through its purchase of a (funny) Superbowl ad last week, as well as through their cheesy/unforgettable late-night commercials. The company’s done a great job drawing attention to itself, and that appears to be paying off; according to this release, it was on pace to do $23 million in business in 2008, and has been featured in magazines like Inc and Forbes.
But like Bidz, another noteworthy Internet-based company that I wrote about this month in JCK, Cash4gold has run into a bit of controversy. In Cash4gold’s case, the company itself admits it doesn’t pay the best rates in the business – even though its commercials do say that, because they are refiner, that’s “more cash in your pocket.”
We all know that taking in scrap has become a huge business for jewelers; one even told me it’s the only way he makes any money. In an article in JCK last month, JVC’s Cecilia Gardner notes that customer expectations are “frequently outlandish” when it comes to trading in jewelry.
Often, they come in armed with the current price for an ounce of pure gold, and expect that you will base your offer on that value. Be sure to explain that the gold in the item offered for sale is not pure—and that the labor that went into the manufacture of the item will not be a part of your purchase price. Instead, you will probably be paying only the value of the precious metal contained in the item. By addressing these often unwarranted expectations in the course of your conversation, you will be able to ensure that your customer feels that the transaction was safe and fair.
That makes sense. Even so, some of the figures people are citing in this instance seem awfully low. (This Inside Edition story has GCAL’s Don Palmieri calling Cash4gold’s offer “not very good.”) I haven’t talked to Cash4gold, but they argue that consumers have a right to turn down any offer, and that they make it worthwhile because their system is fast, anonymous and convenient. Still, I ask you, readers – what should be the standard procedure on this kind of thing?
VW commented:
I used the Cash4Gold service once. Needless to say, NEVER AGAIN!! I
sent in quite a few items, waited FOREVER, just for hardly any
cash. I feel that they use the excuse of items not being pure so
they can cheat you out of money!
Refiner in Ohio commented:
Hello- I do not deal with the public however I do deal only with
established businesses that have to register with my company under
the Patriot Act. When we send in refining lots, we send them to a
GOVERNMENT refinery. We buy 10k, 14k, 18k, 22k and 24k. We put all
the karats together and send it in as a "
JACK800 commented:
A fact seldom discussed in calculating the price received for scrap
gold is the holding period required by law. Almost all
jurisdictions mandate a multi-week ‘cooling off period’
to provide law enforcement an opportunity to inspect scrapped
jewelry as proceeds of a crime. A jeweler buying gold scrap today
has to factor in the uncertainty of future gold prices.
Jennifer Heebner commented:
Many jewelers have told me they are relying on gold buying and
selling as a means of supplementing slow jewelry sales. About six
months ago, I even tried to sell my old gold jewelry, after I read
a WSJ article on the subject and one reporter's experience. I
learned from that article and my own experience that unless you
have a large quantity of pure gold (as in 3 oz. or more), it's
really not worth the effort.
wjschmid commented:
I used or should I say I tried to use Cash4Gold. I sent in a
package on Jan. 7,2009. However Mike at Cash4Gold told me three
weeks later that they never received it. He also blamed the USPS.
Claiming that there is a HIGH level of theft in California, and
that they are investigating. Cash4Gold doesn't seem to think it is
there place to take special precaution for their new or past
clients, in California to secure these delievery's. Needless to say
my Gold and Diamonds have not reach them as they claim. I have
filed a claim with BBB and the USPS. I my eyes Cash4Gold should be
avoided untell they actually secure and protect shipments that are
sent them as they claim on all their ads.
