Cash for gold?

July 30, 2008 7:27:25 AM PDT
It's a way to make quick cash, but does selling gold really pay? Steve Bernas with the Better Business Bureau of Chicago shares some tips on how to make sure you're dealing with a reputable buyer and advice on how to get the most amount of money from your old gold. Advice On Selling Gold And What You Need To Know:
  • Consumers should be aware that the price of gold can fluctuate from day-to-day. The quote you receive when you call a store might not be the same when you actually take your jewelry to the store.
  • It is important to determine the value of the jewelry as a whole and not just the scrap value of gold to get the best price.
  • Knowing the karat and weight of your gold before you sell can also help keep you from getting ripped off.
  • Know your Karats. Pure gold is too soft to be practically used so it is combined with other metals to create durability and color. The Federal Trade Commission requires that all jewelry sold in the United States describe a karat fineness of the alloy. 1 karat equals 1/24 of pure gold by weight. So 14 karats would mean the jewelry was 14 part gold and 10 part other metals. It is illegal for jewelry to be labeled "gold jewelry" if it is less than 10 karats. It is important to know the karats of your gold to make an informed decision on the scrap value of your jewelry.
  • Call a local jewelry store or check with an online source, such as www.goldprice.org to verify the current market price for gold before you sell.
  • Ask how long the local jewelry has been in business- the longer, the better.
  • Get an appraisal: To ensure you are getting the best price for your jewelry, have it appraised before selling. Your jewelry may be worth more than that price when you include workmanship, artistic value, and embedded gems for the piece as a whole.
  • Gold pieces with less color, or fewer stones, are worth more. A jeweler must break the stones out before the item goes to the refinery.
  • When selling your gold, keep in mind that all transactions should be done in the open. If a buyer wants to take your jewelry or coins somewhere else or to a back room or to weigh, do not agree to do so. This is not necessary and should be considered suspect.
  • Keep in mind that just because you get something appraised for a certain amount, you are unlikely to get that exact amount for your gold- it will almost always be less because the purchaser has to make a profit margin on the transaction. This is normal and should be expected.
  • Beware of large advertised "Expos"- they generally rent out hotel rooms or meeting halls and advertise with a sense of urgency or limited-time offers, such as weekend opportunities only. The expos may claim that they pay the highest prices, but are they are really a good deal? A Toledo, Ohio company, Toledo Coin Exchange, told the local BBB that in some cases they have heard that the traveling expos pay 1/3 less than local buyers. Local Chicago gold dealers say the same after sending their employees to the expos to compare prices.
  • Many people confuse pawn shops and 2nd hand stores, thinking they are the same- although they may do the same things in terms of buying or selling 2nd hand items, pawn shops are highly regulated and 2nd hand stores are not at all. It's safer to go through a pawn shop than a 2nd hand store when it comes to gold transactions.
Consumers Beware: Internet gold buying deals can be outright scams:

There have been incidents where consumers received high quotes for their gold jewelry, only to be asked to send it to an "escrow service" or pay advance fees via Western Union. The escrow services turned out to be phone and consumers were had their jewelry stolen- along with their money. Be especially wary if the buyer is from a foreign country! If you are selling your jewelry or gold, make sure your items are insured when being shipped, so if they are lost you can recover the value.

  • Obtain appraisals prior to mailing items, so if they are lost you have proof of their value.
  • Check the company's policy as to what they will reimburse if they lose your product. Many limit their liability.
  • Make a list of the items included in the package, keep a copy for yourself, and put a copy in the envelope.
  • Take a picture of the items you are sending, including any identifying marks.
Be Alert Of Gold Buyers Who Do The Following:
  • Dispute karats. Some disreputable dealers will try to persuade you that your gold is less karat than it really is. Identify and understand the karat value stamped on your jewelry before attending a gold party.
  • Combine karats. Don't let jewelry of different karat value be weighed together. Some dealers will weigh all jewelry together and pay you for the lowest karat value. Separate your jewelry by karat value.
  • Undervalue offers. Some dealers know people are just looking for quick cash to put in their pockets and will offer you money for your gold that is lower than the actual value. It is important to know the market price for gold and the weight and karat value of your jewelry to understand the difference between a good and bad deal.
  • Don't leave your valuables with someone you don't know or trust. Don't be pressured. If you're not satisfied with the price, move on.
For more information visit www.chicago.bbb.org.

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