Monday, February 16, 2009

Selling Your Gold: What Consumers Should Know

As the nation’s largest buyer and appraiser of jewelry from the public, Cash4Gold has transformed the gold business in America and completed more than 700,000 transactions. The vast majority of Cash4Gold customers—a staggering 94 percent—accept the company’s offered payment for their goods rather than declining and requesting that their jewelry be returned. The company stands by its 100 percent customer service guarantee.

Cash4Gold has always been refreshingly upfront about the fact that it is just one of many options for people looking to sell their gold, and that customers may be able to get more for their gold than Cash4Gold is willing to offer. Today’s entry continues our efforts to help educate consumers and give them a sense of their options and what they should expect.

[Note: I suggest that you also read an earlier entry in which we debunked some misconceptions about Cash4Gold and provided facts concerning the offers made to customers.]

It is important to remember that Cash4Gold—as a buyer and processor of gold—values jewelry entirely on its precious metal content. Workmanship is not a consideration since the pieces are going to be refined. As we say on our website, customers should research their options before sending in their goods since pawn shops and jewelry stores may be able to offer a higher price. They base their pricing upon reselling the goods and, unlike Cash4Gold, are not responsible for the costs of melting the gold down, providing shipping to customers, executing the transactions, etc.

Here are some other important points to keep in mind:

1) Cash4Gold prices don’t reflect retail value. This may seem obvious, but some people simply don't understand that the price paid for a piece of jewelry in a store has very little to do with its melt value. Retailers mark up the price of their goods by three, 10 and even more than 20 times their actual worth. Even if someone buys a piece of jewelry on sale or at a significant "discount" from a retailer, the price paid often far exceeds the value of the metal itself.

2) Insurance appraisals are for "retail replacement value." An insurance appraisal of your jewelry should not set the expectation for the offer made by Cash4Gold. These appraisals are made to establish the cost to you to replace a lost or stolen piece at retail value. This price has nothing to do with the value of the metal. Also, if you will look at an insurance appraisal's fine print, you'll find it says, "Not an offer to buy."

3) Jewelers use appraisals as marketing tools. Jewelers may offer more for your items, but be careful to get clarity on the context. Their offer may be for trade-in only. Under this scenario you are getting “more" for your jewelry, but only in exchange for the commitment to purchase another item marked up x percent by the seller. Some jewelers may indeed offer more cash outright for your jewelry, but they would be taking a calculated business risk. After all, they have you in the store and are hoping to either keep you there and sell you another piece of jewelry with that money, or to provide you with motivation to come back to their store when you are ready to buy something else.

4) The Estate Buyer bases payment on condition and spot price. Even if you have a piece of fine jewelry (Tiffany or Rolex, for example) that has value beyond its gold content, it is important to remember that the value of items can erode. Would you pay the same for a new Rolex watch as you would for a used one? Of course not. Whereas condition is of no importance regarding melt value, it is of importance to The Estate Buyer. The Estate Buyer sells the watch to a buyer at a percentage of "spot price" who in turn sells it again. Not only will the condition of the watch be important to the person who ultimately purchases it, but both The Estate Buyer and its buyer will seek to make a profit on the transaction.

5) Do not trust the engraving. Cash4Gold uses state-of-the art machines to thoroughly test all gold it receives. Occasionally, customers who send in jewelry are surprised to receive payout offers reflecting a different karat value than they expected. For example, someone may get an offer based upon 10K gold even though their jewelry is engraved as being 14K gold. Unfortunately, engravings/stamps on jewelry cannot be counted upon to be accurate. Unscrupulous dealers who create and sell this jewelry (particularly on the street, on the black market and overseas) have every motivation to mislead. They sometimes misrepresent the quality of an item to make you believe you are getting a better deal. We have even had cases where people have sent in stamped jewelry that actually has no gold content at all and is therefore of no value.

In Conclusion

Hopefully, this information helped clear up some common misconceptions about Cash4Gold and provided some helpful information, too.

Cash4Gold is not for everyone—but its combination of ease of use, speed, security and confidentiality make it the right choice for many.

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