A golden opportunity?
0 Comments | Sunday Telegraph, The; London (UK), Feb 21, 2010 | by Kara Gammell
The adverts promise easy money, but is selling your gold jewellery good value or an expensive mistake? A raft of firms, offering to buy your gold for cash, has sprung up as the world has gone gold crazy. Gold is a classic safe haven during times of economic uncertainty and the huge demand for the precious metal has seen its price double from $660 at the beginning of the credit crisis in August 2007 to a current level of $1,133 an ounce.
However, a recent report from Which? has questioned whether punters selling their gold for cash are getting good value for their unwanted jewellery. The Office of Fair Trading (OFT) is also looking into the practices of firms, after it received a number of complaints from consumers.
The firms are not just targeting people looking to cash in on the rising price of gold. They are also targeting cash-strapped Britons who need to get their hands on some readies quickly.
According to insurance provider RIAS, there are more than 112m items of gold in homes across Britain, with an average total value of Pounds 1,189 per household.
A spokeswoman for RIAS said: “Due to its enduring value gold remains a sound investment for future family heirlooms. If you own some gold items you may be surprised at how much they are worth.”
Cash-for-gold companies offer consumers the opportunity to sell their unwanted gold, usually broken jewellery, by post. The companies melt down the gold and sell on the precious metal for a profit, having paid for the jewellery by sending a cheque to the original owner.
However, after claims of poor valuations and indiscreet labelling attracting thieves, some industry experts are warning would-be customers to tread carefully.
Consumer champion Which? Money described buyers in its report as offering “shockingly bad value”.
Peter Vicary-Smith, Which? chief executive, said: “The poor value for money these TV gold-buyers are providing is shocking. The cash- forgold market is unregulated, and this investigation has raised serious concerns about the fair treatment of consumers.
“People should be wary of buyers’ adverts as they could almost certainly get more money for their gold elsewhere.”
As part of its investigation, Which? sent three pieces of new gold jewellery to four gold buyers that advertise on television as well as three independent jewellers and three pawnbrokers.
Which? said gold-buyers consistently gave the worst quotes.
Cashmygold.co.uk offered the lowest prices on all three items, offering just Pounds 38.57 for the three pieces of new jewellery purchased for Pounds 729. One of the poorest deals from Cashmygold. co.uk was at just under Pounds 10 for a Pounds 215 9ct gold bangle – an independent jeweller quoted Pounds 54 for the same piece, while Cash4Gold, which has Goldie, the musician famous for his gold teeth, promoting its services, quoted Pounds 14.57.
Justin Prichard, managing director of Cashmygold.co.uk.co.uk, said: “We run a very different business model to independent jewellers and pawn brokers and therefore have different costs such as postal insurance and administration to consider. Taking this into account, we believe we offer a fair price for those who are looking for a hassle free, door-to-door service.”
On average, TV gold-buyers offered around 6pc of the retail price, while high street retailers paid around 25pc.
Which? Money also focused on the indiscreet labelling on some of the envelopes used to send the jewellery – Postal Gold’s delivery address stated the company name, while Cashmygold.
co.uk’s special delivery envelope was emblazoned with the word “gold”.
A spokesman for Postal Gold said: “We are very confident that we offer an easy, convenient and discreet service to consumers to turn their gold into cash and the price we offer is fair for that service. If you are not happy with the payment offered, you can send it back and will get the gold returned to you free of charge from Postal Gold.”
A spokesman for Cash4Gold said: “We are clear with consumers that our prices are based upon melting down the gold, even telling them on our website that they might get higher prices from pawn shops or jewellery stores which can resell the items.
“Our customers have 12 days to decide whether to accept our offer or request their items back. If they choose the latter, we return their items immediately, free of charge.”
The OFT has requested information from a number of companies that buy gold using the postal service to consider whether they are complying with consumer protection legislation.
Among the OFT’s concerns is whether consumers’ rights to reject an offer for their gold and receive it back are being honoured in all cases. However, it said that at this stage, no assumption should be made that any companies involved in gold buying have broken the law.
Get more for your jewellery If you want to earn extra cash, there are alternatives ways to sell your gold
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