Don't Fall for "Cash for Gold" Scam
April 22nd, 2009 by Skip McGrath
You have probably seen the TV ads: Send us your gold jewelry and we will send you cash. Don’t fall for this. You can do much better selling to a local gold dealer. When you melt down jewelry for gold this is called scrap gold. The price for scrap gold has always been much lower than the spot gold price because of the work involved in surveying, melting, recasting and storage and distribution. Today most gold dealers will give you about 50%.
But those companies that advertise on TV who say they will send you an envelope, you mail in the gold and they send you cash -well some of those companies are giving consumers as little as 5% of the spot value. And don’t trust the so called guarantees. Many of these companies claim that you have 10 days to return the money and get your gold back, but when you read the fine print, it says “10 days from the date on your check.” But, many consumers have complained that the write the check and then hold it for 3 or 4 days before mailing, so you often only have a day or so.
When you send in your jewelry you are basically at their mercy. If you want to sell your gold, you can often shop around for local pawn shops and gold coin dealers who often buy gold. This way you take the gold in, and stand their while they test and weigh the gold. Then the dealer makes you an offer. If you don’t like the offer simply thank the person and leave.
If you would like to know what your gold is worth you first have to know how many karats it is. Fourteen karat gold is about 50% pure, whereas 18K gold is about 73% pure. You can weigh your gold on a digital postage scale to get the approximate weight, then go to the Scrap Gold Calculator at Mid-States Refining website at http://www.midstatesrecycling.com/karatpro.php. Select Troy Oz. on the pull down at the bottom of the page and then put in how many ounces of each karat of gold that you have and it will calculate the value. Notice that there is a $100 refining charge. So if you only had a 1 oz, 18K ring you would get $323 for it. But if you had 5 ozs of 18K gold, you would get $2901 which is about $580 per ounce. Even at the lower price of $323 that is about $300 more than most of the cash for gold places would give you.
Lastly if you really want to get the most money, then you can melt down your own gold. Basically all you need is a propane torch and a crucible to hold the gold. Just Google the term “how to melt gold” and you will see results from Wiki and eHow that give instructions.
The website for Midstates Recycling indicates they only purchase scrap gold from the trade. Do you know if this has changed? Thanks!
That is correct. But they will do it for anyone that has a sizeable amount such as 10 ounces or more. There is a guy locally who is buying gold and melting it down. He sends it to them when he gets 10-15 oz or more at a time. The best bet for a small amount is to check with local gold coin dealers.
They give you far more than the mail-in guys.
Selling your scrap gold would give you fast cash but always make sure you won’t be ripped off. There are really lots of scams out there.
[...] Excerpt from: Don’t Fall for “Cash for Gold” Scam [...]
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Hi – we are working on a book about blogging to make extra income. It will be ready in about 2 weeks.
Thanks for your nice comments about the blog.
Skip
Thank you for confirming these are scams, although I had my reservations (which is why I have held back) this has now confirmed that everyone is out for themselves to make money on the trustworthy – thank goodness their are people who write these reviews and give advice like you. Thank You
When you send in your gold some of the companies will also charge you a £10 “handling fee”. Basically means they can low-ball you on the amount offered, which you refuse, and they demand £10 if you want your jewellery returned.
The only people placed in the situation of needing to sell there gold jewellery are probably strapped for cash as it is, £10 can seem like a lot.
Its a scam through and through, bigger than ever now though due to the credit crunch.
Hi – Money 4 Gold is a scam!!!! I sent a lot of very good jewelery off for valuation and i received a cheque for £113.00 at least a 5th of the current value. I am in the lucky position not to need the cash but was fed up with lots of gold in my jewelery box that I just didn’t wear anymore. I sent them their cheque and a letter back immediately and called them after 10 days to enquire where my gold was, to my dismay, the customer service advisor (tel operator) told me they had put a hold on my gold and was authorised to offer me £226.00 – double the original cheque! When I refused she then offered to put me through to her superviser to discuss another offer, I again refused and requested my jewellery to be returned to me. 2 weeks later I have called them again and shock, horror my jewellery is still with them! Supposedly to be sent tomorrow!
I think about the people who are looking at ways to make money to help them in this terrible financial time and I am appalled that these companies are quite plainly extorting people in their time of need or desperation. Do not go to these companies, from my experience they are all crooks!
If you’re selling gold – beware – most high street pawnbrokers are now paying at least £6.00 per gram for 9ct gold.
This is what the TV Advertised companies are paying.
Money4Gold – £1.55 per gram
PostalGold.com – £1.48 per gram
Cash 4 Gold – £1.90 per gram
Cash My Gold – £1.34 per gram
Cash Your Gold Now – £4.00 per gram
S0 – the truth is revealed – if you’re selling gold – DONT POST IT!
I HAVE ALL THE EVIDENCE – DONT GET CONNED – DONT BE SCAMMED!!!!!
the thing that gets me is that if this gold rush is such a scam how do these companies get all the prime time air time with their adverts and also seem to have celebrity endoresments and some are even sponsoring tv shows. I as you said maybe they just need to be clear that they are offering the scrap price of the metals. Saying that I have seen a lot or smaller players who seem very rogue online maybe someone should outline or list the proper companies from the scammers
Hey, nice post. I just found this blog, but I will definitely come here again. Keep us updated.
I was scammed last year by one of those so called “Cash For Gold” companies that claim to pay you the most for your unwanted gold, since then, I have created a website that warns people of those unethical companies and shows them where to get the best price for their gold
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I stumbled upon your blog thru aol. I really like the entries which are well written and informative. I totally agree that collecting gold coins is a brilliant idea to diversify your portfolio. I have bookmarked your site and will certainly visit again. Keep up the good work.
seriously any one know a good reliable place to trade your gold … these guys? Selling Gold
I took my gold to our local reputable jewellers where he weighed and tested the gold in front of me and offered £7 per gramme. Also had an envelope through the post from money4gold and was thinking of choosing that way of selling instead as they sound so convincing. Thanks for all the info here. I will stay with the jewellers I think!