After steadily declining in June, the price of gold started to rebound in early July. While gold’s current price (around $1200 per ounce) is far below its all-time high of $1,900 per ounce, in August 2011, gold is still very appealing to both buyers and sellers.
If you’re thinking about selling your gold jewelry, the first and most important thing to do is to make sure the buyer is legitimate — with the rise in gold prices has also been an increase in cash-for-gold scam artists. Here’s what to know and do to help prevent being taken advantage.
Beware of unlicensed buyers.
A Google search for “sell my gold,” or something similar, returns thousands of results. Almost every jewelry store, pawn shop, and flea market in the country is now buying gold, not to mention online buyers, and many are unlicensed and uncertified. While many jewelry buyers are in fact legitimate, many more are not, especially if they are only online.
Types of scams.
One of the most common online scams is a charge-back — when a company asks a seller to mail their valuables to an alleged buyer. The buyer then claims they never received the piece, or that they never purchased it, and issues a charge-back to their credit card company or Paypal account. Also, never send your jewelry in the mail to someone who wants to look at the piece in person before they make an offer. This is another common scam where a potential buyer who claims they never received the item or it was lost in the mail, and they keep the piece without ever paying for it.
A second type of scam is when a buyer offers a price far below what the piece is actually worth. While this is an unfair business practice, it is really the fault of the seller if they agree to the offer. That is why it is so important to have an idea what your piece is worth new, as well as what it’s worth in its existing condition.
Gold buying parties.
Another gold buying scenario to be aware of is known as gold buying parties. These are gatherings or parties organized by a local sponsor. The sponsor invites their friends and family over to their house, where a “gold buyer” will appraise the guest’s pieces and offer appraisals and cash on the spot. These buyers often pay far below what the pieces are worth, which is how they make a profit. The sponsors also usually get a cut of the sales. Again, know what your pieces are worth and understand what the arrangement is between the sponsor and buyer.
Advice for gold sellers.
Like any business, the reputation of pawn shops and jewelry stores differ from shop to shop. Some are more professional and offer better prices than others. Research multiple companies beforehand—ask plenty of questions and find out if they are a member of the National Pawnbrokers Association. Unless you know for certain that a company is legitimate, we recommend you do not mail your jewelry out of town or to an unknown source, as you may never see it again.
Instead, take your piece to two or three local buyers and get them appraised. Make sure the shop is a member of the National Pawnbrokers Association, and its appraisers are trained or certified by the Gemological Institute of America (GIA).
If you have multiple pieces, you may want to get individual offers on each piece as one buyer may be willing to pay more for some items than others. Make sure you agree to the appraisal estimate and terms and conditions of the sale before agreeing.