Over the last couple of years there has been a gold selling frenzy that has sparked a rush to sell gold in all its forms from gold fillings to old rings and golden family heirlooms. This has spawned a new type of gold digger, the gold buyer who simply cannot wait to give you the cash you need for the gold you don’t want. You can find them everywhere from little kiosks at flea markets and shopping malls to the world wide web. It has become a lucrative business with many unscrupulous gold buyers turning into overnight millionaires.
It seems like everyone is trying to reap as much profit as they can from the booming gold price. With the internet playing a major role in this latest gold rich, there are seedy outfits luring people to sell their gold online because it is a “convenient and efficient way to get the best price for your gold from the comfort of your home.” Authorities have been warning people to be more careful about who they send their gold to. Government agencies in the United States and Great Britain have launched a number of investigations into the mail-order/ online gold buying companies. These virtual gold buyers might promise convenience, but many make low-ball offers that go as much as 80% below the real melt value of gold.
Besides low-balling customers some online gold buyers do not stick to the window-period that should allow customers to get their gold back if they for some reason, decide not to sell. Some people would even send the cheque back and not get their gold back in return. The explanation is usually that their gold has already been melted (if they do get an explanation at all).
There are many legitimate mail-in gold buyers with high ratings from the Better Business Bureau Australia, but the problem is a lot of the companies aren’t even listed on the BBB and if they were, consumers don’t always check. Checking the legitimacy and reputation of the online buyer is one way to ensure that you don’t get scammed. There are a few more prudent steps that you should take when selling your gold to an online buyer:
- Figure out the value of your gold before selling to anyone. This is based on the weight of the gold and its purity. Use a kitchen scale. The price of gold is often expressed in troy ounces. 1 Troy Ounce is equivalent to 31.1 grams. Some dealers use pennyweights. 1 unit expressed as DWT is equal to 1.56 grams. The purity is often inscribed somewhere on the jewellery. There is some maths that you will have to do to determine what is called the melt value, but there are some useful online tools and calculators that can help you with all that math.
- You should choose a gold buyer who gives you at least two hours to accept or reject their offer. Make sure that you respond in time otherwise the buyer can assume that you have accepted the offer and proceed with payment and go on to melt your gold.
- Establish whether your gold has no other special value besides the melt value. Sometimes the most expensive thing about a golden ring for instance, is not the gold content, but it could be the precious stone set into the gold.
- Vet cash for gold sites by checking with the Better Business Bureau and do as much online research as you can to find customer complains.
- Find out if the gold buyer is willing to pay 70 to 80% of the spot price. If they offer you anything less, move on.
- Include your own estimate of the value of your gold when making enquiries and ask for an explanation if the vendor comes up with an estimate that is different to your own.
- The last and probably the most important thing to do is to NOT use regular mail to ship your gold. Use registered mail or a delivery service that will track delivery and receipt of your gold. And always insist on insurance.