Selling Gold? Know What You’re Selling and Who You’re Selling To!
As more people decide to sell their broken or unwanted gold jewelry in order to raise fast cash in these cash-strapped times, very few sellers have any real idea about the items they send-in to Internet buyers are actually worth. That doesn’t have to be the case. Nevertheless, selling gold items to Internet buyers can be risky, since the number of buyers—and scams—have increased with the price of gold.
Understand How Your Gold is Valued
Let’s say that you have a gold chain that you don’t wear much anymore and want to sell it for much-needed cash while the price is at record highs. The odds are that this chain is worth a lot more (in gold value) than it was when you bought it. However, you probably don’t know just how much that value is, a fact that unethical buyers and out-and-out scammers know well. This gives them an opportunity to take advantage of you by minimizing the cash you receive from them.
As an example, let’s say that this chain weighs 20 grams. Gold is priced by the Troy Ounce, where 1 Troy Ounce contains 20 Pennyweights (DWT). Since there are 1.555 grams per Pennyweight, your gold chain contains 12.86 DWT of gold.
At today’s spot market price of gold, $1,196.00/Ounce (20 DWT), you can now determine value by dividing 1,196 by 20 which tells you that each Pennyweight of gold in your chain is now worth $59.80. Your necklace of 20 grams contains 12.86 DWT. Its value, therefore is 12.86 X 59.80 =$775.00.
There is just one thing about this. It all depends upon the K (Karat) weight of the gold in the necklace. If it is marked 24K or 28K, that means 100% gold so the value shown above of $775.00 is what it’s worth. However, if it is marked 18K, for example, it only contains 75% pure gold and is therefore worth just $581.25. If it is marked 14K, it has just 58.33% pure gold and will be worth somewhat less.
This is the process an Internet buyer uses to determine what each item you send in is actually worth based upon assay and the current spot market price at that time. The final figure after assaying each piece and adding the figures together represents 100% of the actual value of everything that you sent. However, the buyer is running a business, so he has to deduct a reasonable amount for his overhead plus a small profit for the company.
Unethical buyers, counting upon the fact that you probably have no idea what your items are worth, may send you just 15 to 25% of actual value or, in the example of the 24K chain above, just $116.25 to $193.75. This isn’t a fair payout because the buyer is retaining the greatest portion of your property’s actual current value!
Your Best Defense is Knowledge About Your Property’s Value
In the event that all these calculations seem too complicated to deal with, there is another way. Take your items to a local jewelry store and ask him to give you a rough idea what your gold items are worth at the current spot market price for gold. He may charge you a few bucks for doing it, but in the long run you will know if an Internet buyer is ripping you off. You should receive at least 60-75% of the actual gold value from an ethical buyer after he subtracts his overhead costs and a small profit from your item’s total value.
Also, you should remember that any diamonds mounted in your jewelry also have value and should either be appraised and included in your payout, or removed and returned to you.
Perhaps most important, always investigate any buyer you are planning to sell to for the first time with the BBB (Better Business Bureau) and Internet complaint sites. If the company you are considering has a lot of ‘unresolved complaints’ from unhappy sellers, look elsewhere. This will also help you avoid out-and-out scams designed to steal your items and claim that they never arrived.
Here’s what a typical ‘unresolved complaint’ will look like:
I SENT MY PACKAGE OUT ON 2/15/2010. AFTER WEEKS OF GETTING THE SAME MESSAGE "PACKAGE NOT RECEIVED", I DECIDED TO CONTACT THE OFFICE. I WAS TOLD THAT MY PACKAGE WAS LOST IN THE MAIL; THAT I SHOULD BE RECEIVING AN INSURANCE CLAIM FORM AND THAT I WILL BE REIMBURSED UP TO $100. I KNOW THE STUFF I SENT-IN WAS WORTH MUCH MORE THAN $100. HOW CAN A COMPANY LIKE THIS BE ALLOWED TO KEEP DOING BUSINESS AFTER SO MANY COMPLAINTS? I WOULD RATHER NOT GET THE $100 AND FOLLOW THIS THRU TO THE END. IT IS REALLY UNFORTUNATE THAT COMPANIES CAN TAKE ADVANTAGE OF CUSTOMERS AND GET AWAY WITH IT. I PERSONALLY WILL BE TAKING ADDITIONAL STEPS TO TRY TO EXPOSE THIS COMPANY TO THE PUBLIC. I GOT TWO DIFFERENT PHONE CALLS FROM MANAGERS TO SUPERVISORS, AND THEY ALL SAID THE SAME THING.
DO NOT TRUST THIS COMPANY! YOU WILL NEVER SEE YOUR JEWELRY AGAIN, MUCH LESS A CHECK. (Company’s name has been deleted for this example).
Don’t allow yourself to be in this position. Read good advice on websites such as Cash for Gold Complaints; always check-out an unknown Internet buyer with the BBB at http://BBB.com and, if possible, know what the actual value of your gold property should be. To quote two old adages, “Better safe than sorry!” and “An ounce of prevention is worth a pound of cure!”