In the Times Today they reported that the Office of Fair Trading is launching an investigation into mail in cash for gold companies - saying that they are offering extremely low prices for jewelry sent in. One example was just over 10 pounds being paid for a bracelet that originally cost over 200 pounds.
Mailing in gold or selling your scrap gold to these companies is probably not the best way to sell your jewelry and certainly not the only one. You have to think that all the cash for gold company is going to do is ship sent in gold off to the refiner. The most the gold is ever going to be worth is the spot price of gold. The refiner takes their cut (between 5-10% typically) and you cash for gold company has to cover their costs ( getting Anne Diamond to appear on an advert amongst others) and make some profit meaning that what you get at the end is going to be a lot shy of the gold vlaue of your jewelry.
I am not sure that the Cash for Gold Companies are a rip off but that people have an over inflated idea of what their jewelry is worth based on what they paid for it. When you bought your ring etc your bought it for its utility and emotional value. A thick 14 karat wedding band may have set you back originally 600 pounds or $1000 but this ring that lets say weighs 6 grams only has about 80 pounds ($120) worth of gold in it and your cash for gold company will only pay you a fraction of this.
Other and perhaps better ways to liquidate your jewelry would be Ebay where you can easily get over the gold spot price or simply take your jewelry to a local second hand jewelers or coin shop who are likely also to ship it off to the refiners but have not had to pay Anne Diamond to convince you to part with your rings and necklaces therefore offering you a better price.
Before you do anything always make sure that you know how much your jewelry is worth - i.e the scrap gold value. www.in-gold-we-trust.info has a scrap gold calculator allowing to easily calculate the value of any gold jewelry. Check out this You tube video explaining how to use it
Thursday, January 21, 2010
Posted by Andrew at 6:52 PM