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? 

JCK News Director