Goldst?r, a company that lets customers trade in their jewelry at automated kiosks, is debuting its service at 10 Cub Foods supermarkets in Minnesota.
The kiosks (pictured) value gold, silver, and platinum pieces, and are similar to those run by Coinstar and ecoATM, which give consumers cash in return for their spare change and old mobile phones, says Kevin Miller, partner in the Newport Beach, Calif.–based company and chief operating officer.
With Goldst?r, the kiosk uses proprietary technology to analyze the item’s weight and metal content. It then makes an offer based on a live hookup to current metal prices. If consumers accept it, they receive store credit or cash for their item. The entire process takes about two minutes, and every customer is charged a $2 appraisal fee.
The service is geared toward the “masses, not the classes,” Miller says, with a top payout of $350. “We don’t expect people to come in with a Tiffany necklace,” he says.
The idea came from Miller’s partner, who he declines to name, but whose family was formerly in the jewelry business.
“There is no one else in this space,” he says. “We see a highly fragmented market made up of mail order, mom-and-pop stores, and pawnshops. By putting our kiosks in mass merchants and shopping centers, it makes it trustworthy, safe, and approachable for the consumer.”
The technology took two and half years to perfect, he says.
“The design of the kiosk came together rather quickly,” he says. “But getting the device that scans the gold hooked up to real-time commodity pricing to accurately give a bid on the spot took a very long time.”
The company has targeted supermarkets “because they have good traffic,” Miller says, but it also hopes to deploy its kiosks at department stores and national chains.
“Many major jewelers don’t buy back any jewelry except for the odd diamond piece,” he says. “We see this as having international implications. When you look at the sheer amount of gold jewelry in India, it’s staggering.”
Last year, it beta-tested the concept at a group of New Jersey supermarkets.
“What we found is the average consumer will pass by the kiosk a few times before they decide to approach it,” he says. “About 70 percent are appraisals and 30 percent are appraisals with acceptance offers. We have had people bring in bags of jewelry.”
He notes the company follows all legal requirements. It has a secondhand license in all 50 states, it requires sellers to submit their identification, it takes their photograph, and it holds items for 30 days.
For now, the company is self-funded, but it eventually intends to seek investors.
He says the company still sees a huge trade-in market out there, even if the gold price is not at peak.
“The numbers are staggering,” he says. “Even after the collapse in 2008 there is still more gold held in households than there is any government institution and Fort Knox combined.”
The company is now looking into possibly developing a kiosk that would facilitate gemstone trade-ins.
As far as giving the company a name with an umlaut, Miller says “that makes us distinctive.”
“The umlaut goes back thousands of years,” he says. “And gold was found 5,000–6,000 years ago.”
(Photo courtesy of Goldst?r)