By Edward Johnson
As global markets are currently seeing rapid declines and prolonged volatility, worried investors are seeking safe havens for their funds. Many are adjusting investment plans to help their money grow. With the price of gold at an all time high of more than $1,700 per ounce, the Better Business Bureau (BBB) advises consumers to do their homework before making tempting gold transactions.
Whether through an online venue, an at-home “gold party,” or your local jeweler, many consumers are looking to sell their gold jewelry for quick cash. However, you cannot trust every dealer. In 2011 alone, the BBB has received hundreds of complaints against gold, silver and platinum dealers.
Consumers need to be on the lookout for not so reputable sellers. Many of the complaints the BBB receives stem from false advertising and delivery issues where the consumer ends up receiving an appraisal for far less than what they thought their gold was worth.
The BBB recommends following these tips to ensure a “golden” transaction of your precious metals:
Find a trustworthy appraiser. If possible, go to a local appraiser whom you know and trust. Mailing in your gold to an unknown party is wrought with potential problems. Always check with the BBB first at www.bbb.org. The BBB suggests obtaining two or three local appraisals to compare prices, prior to any sale.
The true price of gold may not be what you receive. If gold is worth $1,700 per ounce, you aren’t going to be paid $1,700 for every ounce of gold you have. Ask what you will be paid (if an online company, make sure you ask for specifics and give details on items you’ll be sending). Understand that the ounce quote is for pure gold only. For instance, 14-karat gold is composed of just 58.5 per cent gold. Ask how much the company’s going rate is for each ounce of each karat you are sending. The lower the karat, the less the gold content.
Don’t let jewelry of different karat value be weighed together. Some dealers will weigh all jewelry together and pay you for the lowest karat value. Separate your jewelry by karat value before attending a gold party.
Don’t let anyone take your diamonds from gold pieces without compensation. Single gold stud earrings might be worth $5 or $10, yet diamonds in the earrings can be saved. Some are too small, and the labor to remove them might exceed their value, but engagement ring diamonds, for example, should be given a value separate from the gold.
Know the terms and conditions when sending items by post. When shipping your gold, make sure your items are insured for the value you believe they are worth, so if they are lost you can recover the value. Obtain appraisals prior to mailing items so, if they are lost, you have proof of their value. Check the company’s policy as to what they will reimburse if they lose your product. Many limit their liability. Make a list of the items included in the package, keep a copy for yourself, and put a copy in the envelope. Take a picture of the items you are sending, including any identifying marks.
Ask about the company’s guarantee if you are not satisfied with the price offered. Can you get your product back if you return the check? Many companies melt down the items in 10–14 days. If you send the check back, send it “return receipt requested” so you have proof when it arrived at the company.
Edward Johnson is president & CEO of the Better Business Bureau serving the metropolitcan Washington, DC region and northeastern and eastern Pennsylvania.