Cash For Gold: Seller Beware! Is Cash4Gold A Scam?

Do have a lot of jewelry? Is a lot of it unused or unwanted? Jewelry boxes are sometimes overflowing with shiny trinkets, many of which haven’t been worn in years. They have sat in that jewelry box largely ignored because outside of sentimental value, they have had very little resale value other than the neighborhood garage sale.

In the past, the price of gold, while not dirt cheap, has been low enough that melting down and reselling gold hasn’t been the most lucrative of businesses, but over the past couple of years, that has changed. As of early 2010, gold is bringing in over $1,000 per ounce and many experts believe that not far into the future, it’s going to be much higher (just check out this gold chart update). Some experts say that $3,000 per ounce is not out of the question over the next few years. For the curious, here’s more information on spot gold prices.

This surge in pricing has caused numerous startup businesses to offer to take your gold and give you, “top dollar” for it. As we will see, “top dollar” is a very relative term. Top dollar to you and top dollar to them are very different.

One of the most popular companies in this buy and melt business is Cash4Gold. They advertise that not only will they give you top dollar for your gold, but all you have to do is drop that old bracelet in to their pre-printed envelope, send it to them, and within a few days, a check will arrive in your mailbox. According to Cash4gold, it’s that easy.

But let’s look under the covers shall we?

Recently, Cash4gold has taken a lot of criticism. It doesn’t take much Googling to find numerous accusations of scams. One of the most telling entries comes from a former Cash4Gold employee.

Cash For Gold: Seller Beware! Is Cash4Gold A Scam?

This employee tells quite a story, stating that Cash4Gold checks are sometimes made for 1 cent to unsuspecting customers. The allegation here is that the amount of the check is purposely much lower than its actual value with the hope that the customer will not know the true value of their gold. If the customer calls to dispute the check amount, customer service representatives will then raise the amount of the check to a more favorable amount to appease the customer. But even the newly raised rate won’t scratch the surface of the value of the gold. Their argument is that the seller should accept less for their gold in exchange for the convenience of easy selling.

In addition, the Cash4Gold whistleblower says that the check date is usually days earlier than when the check is put into the mail. They do this because the terms of the agreement state that the customer only has 10 days from the check date to dispute the check amount so if their payout isn’t received in the mail until 9 days after the check date, the customer only has a limited amount of time to dispute the payment. How many people with full time jobs will find time to do their homework and determine what is truly owed them, and how many people will read the fine print and know that this rule even exists?

Is There Any Defense For Cash4Gold?

There are strong indications that Cash4Gold has been pulling some tricks on consumers, given the sheer number of complaints it’s received — as I firmly believe in the saying “when there’s smoke, there’s fire”. But I also strongly believe in that other saying “seller beware”, which may in fact, pin some of the blame perpetrated by con artists upon the consumers themselves. While there are irregularities that hound the reputation of this cash for gold company that I feel need to be addressed and resolved in ways that are fair and just, consumers too, have some accountability and need to face certain responsibilities for falling prey to predatory business practices.

Some questions to ponder: is Cash4Gold actually doing anything wrong by offering the customer such an insultingly low price for their gold? Now any company that manipulates the check dates of the payouts they make is certainly in the wrong, but as far as the prices set — should they be liable for this? Remember that we’re in a free market and that convenience has a price.

You’ll need to pay for somebody to sell your gold for you, you’ll need to pay for the convenience of handling and processing your jewelry and your payment, and you’ll need to pay for the “free” appraisal. Don’t forget that regardless of where you take your gold, you will not receive the actual value of this asset. In this case, you are paying companies like Cash4Gold to make the process of selling your gold as convenient as possible. Sure, they have to cover their costs. And perhaps it is their right to offer you any price they wish and it’s your obligation to have some idea of what to expect for the gold you are selling. You have the choice to take them up on their prices….or not. I can only echo that well known warning: Seller Beware! Yes, beware of internet scams. Always make sure that you are in the driver’s seat.