Friday, February 6, 2009

Cash4Gold's Response to Yahoo! Article

Yahoo! Tech today posted an article called "Beware the Cash4Gold Scam". The content is essentially a regurgitation of a couple of other stories that have been written and responded to, but considering the visibility of Yahoo! it's necessary to respond to this one as well.

Yahoo! Tech: "The folks at put Cash4Gold to the test, rounding up a bunch of old rings, necklaces, and earrings, and taking them to a regular pawn shop to be appraised. The offer: $198 for the lot. They then sent the items to Cash4Gold and waited for a check in the mail. It arrived within a few days as promised... in the amount of 60 bucks. (You don't have to accept the check; the deal isn't done until you cash it.)"

The Truth: They reference the Cockeyed article we have already confronted, but let's cover it again.

This scenario is not in dispute. While it cannot be confirmed that this is indeed what happened, I will trust that it did. However, it is very important to remember that Cash4Gold is not a pawn shop; it is a refinery. Whereas a pawn shop will take your jewelry and sell it in its current form (value dependent not only on gold content but craftsmanship), Cash4Gold melts down your gold and sells the gold itself. It doesn't matter what your gold looks like. Moreover, it is entirely possible that the pawn shop overvalued the gold in question.

CEO Jeff Aronson also discussed this in a more recent LA Times article. He made it clear that melting your jewelry is "not always the right way for somebody to monetize," and that "there are ways for them to make more money sometimes by reselling to pawnshops and jewelers." Moreover, the company's website takes the unprecedented step of telling its prospective customers that they may be able to get more elsewhere.

According to a recent study, 92% of Cash4Gold's customers would never use a pawn shop. The demand for their services are there because the process is quick, easy and confidential. In particular, customers can sell broken jewelry that pawn shops may otherwise have little interest in. The company's management openly acknowledges that gold owners may be able to get more if they put in the work to go to a pawn shop or jeweler. Many people simply don't want that hassle.

This may explain the discrepancy. Cash4Gold evaluates jewelry entirely on the content of the gold. Workmanship is not a consideration. Moreover, it is not a surprise that a pawn shop may sometimes pay more. They are not responsible for the cost of melting the gold down, providing shipping, executing the transactions, etc.

Even so, the point made by the Cockeyed article and reiterated by Yahoo! here is well taken. Cash4Gold does need to continue being clear about the process with prospective customers, educating them and setting reasonable expectations (a step in that direction was taken when another blog was posted called Selling Your Gold: What Consumers Should Know).

Yahoo! Tech: "As bad as that is, it's far worse if you opted for the company's 'Fast Cash' option. Here, that original offer ($60) is wired into your bank account within 24 hours of them receiving the booty. It sure is fast, but it's not much cash -- and you don't have the option of declining the offer at all. You're stuck with a pittance for your valuable gold items."

The Truth: Again, Yahoo! is taking this straight out of the Cockeyed article. Therefore, let's respond by looking back at our response to the Cockeyed article.

There is nothing secret or devious about the FastCash option. On the website where this option is promoted, it indicates that "By using the Cash4Gold FastCash program, you agree that you waive the 10-day return policy for all material." This isn't fine print at the bottom of the page or legal mumbo jumbo that's included in some terms and conditions that you will not read. It is right there in the middle of the page in regular sized print.

Also, to accept the FastCash option, you must send a canceled check along with a form that clearly indicates you are waiving the 10-day return policy. If a customer chooses this method, they indicate that they want the cash immediately -- time is of the essence.

This is not a scheme, but the company is reviewing this procedure to ensure that a customer selecting this option understands that they are waiving the 10-day return policy.

Yahoo! Tech: "(It's also worth noting that Cash4Gold has offered Cockeyed cash 4 removing its expose from the web...)"

The Truth: We also responded to this today, and Joe Laratro has been clear that his activities were completely independent of and without knowledge or approval from Cash4Gold. Even so, Cash4Gold takes responsibility for hiring him as a consultant (he no longer serves the company) and suffers the unfortunate consequences.

Yahoo! Tech: "As a side note, another website offers an in-depth expose on how the system works, this time analyzed from the inside by a former employee. Here it's outlined how the company offers bonuses to phone operators who can convince you to accept a lower offer and how the company attempts to delay payments as long as possible."

The Truth: The anonymous posting referred to by Yahoo! which claimed to be by a former short-term Cash4Gold employee was false and defamatory. At Cash4Gold’s urging, Yahoo! took appropriate action by removing reference to this posting in its article and eliminating the link to it. The false accusations posted anonymously on Complaints Board were debunked in an earlier entry on this site.

In Conclusion: The Yahoo! article is further evidence that Cash4Gold needs to continue to educate the masses on their service. Moreover, a robust online customer service will go a long ways toward setting reasonable expectations and avoiding such customer complaints. These are things that are being reviewed.

1 comment:

  1. That sounds like a very reasonable response to me, and because I'm not anti-business and don't assume that businesspeople are out to rip people off, I tend to believe you. Thanks for taking the time to post this information.