In the last few years, several companies have sprouted up, eager to feed off the gold frenzy. But, before you ship your baubles off in the mail or trade them in at a gold party, it's worth while to think about the best way to sell your old jewelry. After all, just because you may not care about your old trinkets, you still want to get top dollar!
How Gold Sales Work
When selling your gold, it's important to consider both its retail price and its melt value. Retail price is the cost of the bauble if you were purchasing it in a store; in all likelihood, you will only get offered a fraction of this amount. Many gold sellers are surprised or even offended about this, but unless you are selling a Tiffany pendant or Rolex watch, the distinctive styling on your jewelry will have little effect on the offer that you receive from a gold dealer.
Melt value -- sometimes called "scrap value" -- is the commoditized value of the gold itself. If you have a Rolex, its melt value is probably far less than the retail price. But in the case of Aunt Mildred's horrendously tacky ring that currently resides in the bottom of your jewelry box, chances are that it will be worth more if it is melted down, and many jewelers or gold brokers will value it accordingly.
Gold dealers measure scrap gold -- like Aunt Mildred's ring -- in pennyweights. Each pennyweight is 1.55 grams, and a reputable dealer will be able to tell you how much they will pay for a pennyweight of 10k, 12k, 14k, 18k or 24k gold. Using a scale and calculator -- or this handy iPhone app -- you could easily figure out how much the dealer should be paying you. Of course, if Aunt Mildred's ring is attractive, the work of a famous designer, or has some other qualifying factor, your gold dealer may be willing to offer a fair bit more than the melt value.
Cash 4 Gold
One of the biggest companies to cash in on the new gold rush, Cash 4 Gold initially seems like an easy, legitimate way to sell your gold: all you have to do is call the Florida-based company or go to their website, request a "Refiner's Return Pack," put your gold items inside, and drop it in the mail. Cash 4 Gold then appraises your jewelry and sends you a check. Unlike jewelry stores or pawn shops, you don't have to do research, make arrangements on the phone, or drive around town. The entire transaction happens without any face-to-face interaction, and you never have to leave the comfort of your home.
In this case, though, convenience comes with a premium price tag. As numerous sources have reported, Cash 4 Gold consistently lowballs its customers, sending checks for -- at most -- a third of the actual melt value of the gold. The company proudly proclaims that customers have up to 12 days in which to complain about their small returns, but even this guarantee is problematic. According to a Cash 4 Gold whistleblower, Michele Liberis, the company often holds onto checks for a few days in order to reduce the amount of time that a customer has to consider the company's offer. Liberis' expose -- which earned her a short-lived lawsuit from Cash 4 Gold -- further asserts that the company will offer triple its original estimate if you call and complain. Unfortunately, if you refuse their ultimate offer, it can take up to a month to get your jewelry back.
Cash 4 Gold has taken a strong line in dealing with complaints. In addition to suing whistleblowers like Liberis, it has allegedly attempted to bribe bloggers to remove or hide their posts. It has been investigated by the Florida Attorney General's office and Congressman Anthony Weiner (D-NY) has called for an FTC investigation of the company. Meanwhile, the Better Business Bureau has given it a grade of C-, citing "57 serious complaints."
Regarding the allegations against the company, a Cash 4 Gold spokesman replied that "Cash4Gold has done nearly 1 million transactions so the 57 complaints about us represent a miniscule fraction of complaints from our customers ... Cash4Gold is a great option for customers seeking a fast, secure, simple, convenient and discreet transaction."
Other cash-for-gold companies are also being investigated, as WalletPop's Consumer Ally reported earlier today.
Pawn Shops, Jewelry Stores, and Gold Parties
Pawn shops have a bad reputation as the last stop for desperate people, but they may also be one of the best places to sell your gold. In numerous comparative showdowns, pawn shops consistently come out ahead of mail-in gold companies, offering far more than mail-in buyback companies like Cash 4 Gold. An important consideration, however, is the fact that pawn shops are a business, and will try to give you as little money as possible. If you seem desperate, are in a hurry, or take their first offer, chances are good that you'll get less money than you may have hoped.
If you want to maximize your pawnshop payout, it helps to do a little research. One good way to get a feel for the market value of your jewelry is by checking online sales of similar pieces. Based on a few comparative searches, you can probably get an idea of what your piece is selling for -- and if its retail price is higher than the melt value. Keep in mind, though, that there is a world of difference between auctioning off your items on the internet and going to a pawn shop. As with anything, the convenience of a pawn shop will probably cost you: you're likely to get less money than you would on eBay.
While you're at it, you should also get a second (and a third, and a fourth...) opinion from other pawn shops. While you're at it, you might also try calling a few jewelry stores. Keep in mind, though, that even the best jewelry store will still offer you a price well below retail value. The same goes for gold parties, which generally give participants between 50% and 75% of the melt value of their gold.
Auctions and Online Sales
If you have the time and patience, the best way to sell your gold is probably through an online sale or auction. By observing comparable auctions on eBay, you can get a good idea of how much your jewelry is worth, as well as the best way to sell it. Unfortunately, this method is also time and work intensive: in addition to your research on comparable auctions, you will need to take several photographs of your trinkets and will have to set up the auction itself. If you don't have a Paypal account, you'll probably want to open one, as most auctions are done through Paypal; in fact, eBay requires Paypal for many auctions.
Even if you run an online auction, you may still find that you can't get top dollar for your jewelry, especially if you're charging more than a few hundred dollars. On eBay, private sellers tend to be crowded out by professional online stores, and unless you're willing to pay premium prices for prominent listings, you may easily get swallowed up by the competition.
As the old saying goes, time is money, and the time you spend on setting up an auction for your old trinkets may not end up being worth it. The big question to consider is how much your jewelry is worth to you and how much time you're willing to spend selling it.