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Cash4Gold: How NOT To Sell Gold
Posted By Jim On 02/02/2009 @ 10:01 am In Personal Finance | 22 Comments
Did you see the Cash4Gold commercial starring Ed McMahon and MC Hammer? Did anyone else get the funny feeling like you were watching an infomercial at 2AM and not Super Bowl commercial?
I hadn’t heard much about Cash4Gold until the commercial but I never liked the idea of pawning gold for cash. Maybe it’s because I’ve always seen those “We Buy Gold!” signs in rougher areas (Atlantic City is a mixture of gentlemen’s clubs, casinos, and “We Buy Gold!” stores) or maybe because the only piece of gold I own is my wedding ring, and I’d have to be in a pretty rough spot to pawn it. I have no similar feelings towards pawn shops though, just ones that exist solely to trade in gold.
Anyway, I started to do a little more digging about Cash4Gold, I even requested a refiner’s kit to learn more, and found a lot of reasons to avoid them.
When you bring your scrap gold to a pawn shop, it’s priced entirely based on the gold. They don’t care about the design, they don’t care about anything else, they simply look up the price per DWT and quote you that. It’s very much a commodity. DWT stands for “Denarius Weight,” Denarius being an old Roman coin. It’s also commonly referred to as a pennyweight, with one DWT equal about 1.555 grams. When you bring in your gold, you’ll be quoted the price based on the gold percentage (so one price for 18K gold, one price for 14K, etc.).
They send you a “refiner’s kit” and you send them their gold. They look at your gold, determine it’s value, and send you a check. It turns out that this is how every online gold pawning service works and each one is probably going to hose you.
The gentlemen at Cockeyed.com decided to run a test to compare how much they could get at their local pawn shop versus how much they’d get from Cash4Gold . The pawn shop took his 11 DWT of 14K gold and 11 DWT of 10K gold and quoted him $198. They requested their refiner’s kit, sent in the scrap gold, and were sent back a check for $60. The pawn shop was going to give them $138 more than what Cash4Gold sent. They called Cash4Gold and demanded their gold back and Cash4Gold offered $178 this time. The article is well worth the read if you’re considering Cash4Gold or other similar services.
If one individual’s experience with Cash4Gold isn’t enough, how about this insider’s look at the business practices of Cash4Gold? A former Cash4Gold employee sent a scathing insider’s look of the company’s business practices to complaintsboard.com .
8. For those who do get in touch with us within the allotted time frame, we already know what you are calling about. Customers want their items returned, because there check amount is so insultingly LOW. The first thing a Rep will ask you is “HOW MUCH WERE YOU EXPECTING TO GET BACK?” This way we can know how much to “BONUS” you.
*Definition of a BONUS: We issue low checks just to have you call us back if you are smart enough to realize that you just got scammed. For the smart one’s we are paid to offer u a bonus up to 3x the original amount of your check and you accept. For ex: Sally Smith receives a check for $27.86 for a Rolex watch(which we don’t issue value for), a class ring, a ring with diamond chips, a pair of earrings with emeralds, as well as a few sterling silver pieces, and maybe a few items that were really of no value. Now Sally Smith calls the cust srvc dept, where she speaks to a rep who seems so concerned and will see if she can do better with the amount by speaking to a “SUPERVISOR”. We then place the caller on Mute, and speak to our neighbors or doodle on a sheet, or twiddle with our hair for about 45 seconds, while we are supposedly speaking to our supervisor about Ms. Smith’s complaint. We then come back with an offer to “BUMP UP YOUR MELT DATE or any other lies the cust srvc reps can think of, and offer you a total amount of $53.20 which is a little under double the amount of your original check; in which case if you accept, the cust srvc rep makes a 15.00 bonus off of your transaction. If the customer service rep offers you under triple the amount of your orig check, he/she makes 10.oo in bonuses.
My advice is that you probably don’t want to work with this company, but the Super Bowl commercial was funny if you’re into schadenfreude.
Super Bowl ad after the jump.
(Photo: bullionvault )
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 local pawn shop versus how much they’d get from Cash4Gold: http://cockeyed.com/citizen/goldkit/cheat.shtml
 complaintsboard.com: http://www.complaintsboard.com/complaints/cash4gold-c117648.html
 bullionvault: http://www.flickr.com/photos/bullionvault/3592555874/sizes/s/
Thank you for reading!