CBS News found underkarating in gold pieces purchased at discount stores

A recent CBS News investigation found that certain discount merchants were misrepresenting the gold jewelry they were selling, a practice known as underkarating.

The report aired Monday, Nov. 25 on the CBS Evening News with Dan Rather in its “Eye on America” segment. CBS New Correspondent Cynthia Bowers explained that some low-end retailers and flea markets sold jewelry represented as 10k and 14k gold that was below stated karat quality. She issued an alert to consumers to beware and ask questions when purchasing jewelry this holiday season as well as year round.

In preparing the segment, a team of CBS employees went undercover and purchased 25 pieces of gold jewelry. The gold pieces were taken to the Jewelers Vigilance Committee’s Precious Metals Testing facility, and CBS reported that one-third of the items purchased and tested didn’t meet the gold standard.

“Every time a consumer buys one of these little charms and some of the gold is missing, a consumer’s had his pocket picked,” Cecilia Gardner, JVC executive director and general counsel, said in the segment.

Among the items that were misrepresented were Mickey Mouse watches and Winnie the Pooh charms purchased in Minneapolis, where they tested at 8k and not 10k as advertised.

“It is a pretty yellow metal, but it’s not gold—at least under the law,” Gardner said.

When store owner Ginny Choi was told about the pieces, she stopped selling them. Choi told CBS that she is as much of a victim as the consumer because she was unaware the products were underkarated. She said she trusted her supplier and the 10k stamp. Investigators found the same problem with a Mickey charm purchased in a Chicago flea market.

The Mickey and Winnie charm pieces were missing more than just gold—they were missing trademarks as well. In other words, they were knockoffs.