For Immediate Release – August 29, 2011 – With gold near an all-time high, many consumers hope to cash in on their unwanted or unused gold jewelry, coins, and other items. This can be a lucrative source of extra cash, but a BBB investigation dramatically illustrates that sellers should shop around to get a good price for their gold pieces, and not rely on a seller’s claim to be offering the best prices.
BBB visited 12 area jewelers and coin dealers seeking offers for two pieces of gold jewelry - an 18K ring, and a 14K bracelet. The value of the jewelry’s gold content (using the “spot price” for gold on the date and time in question) was compared to the prices offered by the businesses.
Offers for the two pieces varied wildly, ranging from $120 to $318. The low offer was only 37% of the value of the gold content in the jewelry, while the best offer paid 86% of the gold’s value. Five of the 12 offers were for greater than 72% of the value of gold content, while 6 of the 12 were at or below 57%.
“This affirms the critical importance of comparing offers from several outlets if you want to be assured a solid price for gold items you’re selling,” said David Weiss, President of BBB/Greater Cleveland.
Nine of the 12 stores touted their price superiority, claiming “We pay top prices,” “We pay the most for gold jewelry,” and “Best prices on gold,” Price superiority claims were made by outlets that provided 5 of the 7 lowest offers. “Claims that one business is offering more than all the others don’t carry much weight and shouldn’t be relied on,” Weiss cautioned, “Our investigation was in part done to demonstrate that price superiority claims, whether in this or any other industry, usually need to be taken with a grain of salt.” BBB will use its findings to aggressively encourage businesses that buy precious metals to modify the inflated claims.
What’s a good price for gold? “Based on what we found, you’re doing well if you get at least 70% of the value of a piece’s pure gold content, but if you’re not careful you’ll get a lot less.” Amounts offered trended higher in the suburbs, but location wasn’t everything – one downtown store offered almost double the amount of a competitor across the street. Offered prices at coin stores, which made 3 of the 4 best offers, also trended higher.
BBB offers the following tips for selling gold:
* If the piece is purchased for its gold content, you will not get the full value of the gold from a buyer, but it still pays to shop around. Don’t lend much credence to price superiority claims. Check out businesses before you visit at www.cleveland.bbb.org. BBB not only reports on consumer complaints, but also on any advertising concerns that have come to its attention
* A reputable jeweler can tell you the weight and karats of your gold jewelry, and from there, you can fairly easily and accurately compute the gold content in a piece of gold jewelry. Pure gold is 24 karats – 14K gold is 14/24ths, or .585 pure gold. The weight of the item is usually measured in “pennyweight” -- there are 20 pennyweight in a Troy Ounce, which is the measure used in the gold markets. Using the example of an 18K necklace that weighs 4 pennyweight, it is .75 (18/24ths) pure gold, so .75 x .2 Troy Ounces = .150 Troy ounces of pure gold. Multiply this by the current spot price of gold to get the item’s pure gold value. For example, at a spot gold price of $1,700, the ring would have gold value of $255. More information on evaluating the value of gold and precious metals is available at www.kitco.com.
* 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. However, it’s important to consider that if your gold jewelry contains high-grade or rare gemstones or is an antique or designer piece, you will probably get a better price if you sell it as jewelry versus for its gold content. Take the piece to a professional jewelry appraiser to determine replacement value. This will involve a fee, but it will help you decide if it’s worth more intact than if melted down for gold content and is useful for insurance purposes.
* Don't let anyone take diamonds or other jewels from gold pieces without proper compensation. The gold in single gold stud earrings might be worth $5 or $10, yet the diamonds in the earrings can be saved. Some may be too small, and the labor to remove them might exceed their value, but engagement ring diamonds, for example, should be given a value separate from the gold.
* Don’t leave your jewelry at the buyer's to be tested and appraised. The buyer should be able to do this in your presence.
* Think twice before mailing your jewelry off to a company without knowing how much they will pay you for it. These companies will rarely pay you as much for your gold as local outlets offering fair pricing. There’s also the added expense of insuring the package against the possibility of loss or theft. Also, be cautious when dealing with “traveling road shows” offering to buy your gold. Check them out thoroughly, and know the value of what you’re selling.
* Coin dealers generally deal in larger quantities of precious metals, and will frequently pay more for gold. Jewelers generally offer to purchase jewelry for its gold content as a customer courtesy, but many will offer a higher price if the sale is combined with a purchase.
BBB is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. BBB provides objective advice, free business BBB Business Reviews and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust. To further promote trust, BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints. The first BBB was founded in 1912. Today, 122 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than three million local and national businesses and charities. Please visit www.cleveland.bbb.org for more information about BBB.