Cash4Gold.Com: The Truth

You see them all over television, at least on the channels I watch: Cash4Gold! We pay you money for your old, broken, unwanted gold jewelry! Your damaged gold jewelry is worth money to us! Check sent right away! Your gold jewelry and other gold items back if not satisfied!

I always thought it sounded a bit fishy. Finally, one Ed McMahon ad too many, I started checking it out, not that I have any gold, mind you, as I spend all my cash on computers and baby clothes, but I'm curious. What did I find out? In a nutshell, lots.

1. According to Cockeyed.com, in a little experiment they conducted, Cash4Gold.com sent them a check for approximately one-third the value of their broken gold jewelry. Many other customers have reported worse results, even an offer of zero for jewelry appraised at a thousand dollars or more. Now, when Cockeyed complained about their offer, it was nearly tripled to something approaching a fair price; other customers just took what they were offered and chose to gripe online.

2. Once your gold is mailed out, you are at their mercy. The envelope you send gold in is insured -- for a measly $100 via USPS, or $500 if you ship UPS. If you think your jewelry is worth more than that, you had better buy postal insurance for the rest. And if you're not happy with their offer, you have to pay to get your jewelry back -- no guarantees that it won't be further damaged in handling at the company or in transit.

3. And how about those appraisers? According to an ex-employee of the company at Complaints Board the "appraisers" are unskilled labor with a few basic tools and a day's worth of training. Most will probably receive a fair appraisal of the quantity of gold in their jewelry -- but there seems to be a very high level of poor appraisals, judging by the quantity of complaints.

Interestingly, Cash4Gold is currently suing the employee cited above for defamation.

4. Sending in that diamond engagement ring is probably a mistake. The reason is in the company name: Cash4GOLD. It isn't Cash4Diamonds, or Cash4Jewelry -- you will get a low offer for that 10K Rolex your grandfather left you, and those beautiful diamonds and pearls? Nada. The offer you receive is for the gold alone. The other parts of your jewelry may well be reused by Cash4Gold, but they won't pay you for them.

5. Getting your check the next day? Maybe, if you have it direct deposited (which costs you $4.99). The problem with that is that you don't know how much you're going to get until it gets deposited -- and you don't get to protest the amount given if you don't care for it. If you have a check sent to you, you're at the mercy of the post office, and Cash4Gold's motivation to send your check out right away. Those 12 days you get to request your items back (and watch that number -- it seems to change a lot)? Those get counted from the date on the check, not the day you actually receive the check. Add to this the potential unavailability of customer service representatives, and you are completely at the mercy of the company.

6. Cash4Gold and other similar companies mostly sell to a company called Kitco, which buys and sells precious metals. You can't send scrap gold to Kitco directly, but you can look up Kitco's prices yourself. Combining this with a trip to a pawn shop for appraisal, you can be sure of getting a fair price for your gold -- something you will not get if you approach Cash4Gold without some understanding of the value of your product.

Another good broker similar to Kitco, but that does accept scrap gold from the general public (for now): Garfield Refining. I could only find one complaint about them (posted multiple times by the same person) and if I'm doing my math right, I think that it was based on a misunderstanding -- so that's another option for those with lots of scrap gold.

7. Speaking of which, in a "generous" move, Cash4Gold does offer you, the seller, alternate ways to sell your scrap gold -- listing the pawn shop and the jewelry shop. Not any competitors, not Kitco, not eBay (my personal choice) or any other middleman broker -- just the pawn shop or jewelry shop. At least, if you care to go looking for the page, its link buried in a self-congratulatory page about how great Cash4Gold is because they offer you other alternatives. Hm.

8. Finally, though this may not affect you directly, Cash4Gold is one of the most effective fencing schemes ever created. Think about it -- thieves can send their stolen items out of state to a company that doesn't have the time or resources to check any law-enforcement databases, and that also is inconvenient for the police to put pressure on. The company is based on rapid turnover and meltdown of items -- whereas traditional pawn shops are required to hold items for a month or more before disposing of them in any way. Though thieves won't get back as much cash for their items as they could through a pawn shop, they also eliminate the risk of getting caught. This is why Florida and other states are moving to regulate Cash4Gold and its competitors -- and probably why Cash4Gold just started a new advertising blitz.

What Can You Do?

To avoid all the pitfalls and problems of Cash4Gold, try trading local -- just go to a pawn shop in your area. They will tell you exactly what they are giving you in exchange for your stuff, including price per pennyweight on different caratages of gold, and you'll get a fair price for that Rolex instead of a pittance based on the tiny amount of gold in it. And if you don't like the offer, you can just go to the next pawn shop for a new -- and free -- appraisal.

Though this article focuses on one company, Cash4Gold, you can expect similar behavior from most other cash-paid-for-gold companies. Each is built on the same basic business model -- rapid turnover of items in order to quickly extract the valuable gold -- and like any company, each is in it to make as much legal money as they possibly can. The less they can offer you for your gold items, the larger their ultimate profit margin.

There is one cash-paid-for-gold company that I can't find anything bad about - they post their prices up front and explain how they get them. Monsterslayer can give you a realistic idea of what you can expect for your gold scrap if you're willing to do the work necessary to prepare it to be melted down.

Postscript: Back to Cockeyed.com, after their original experiment was posted, it ranked third in Google for searches for Cash4Gold. The company sent Rob, the site owner, a cash offer to bury the keyword "cash4gold" in the article so it wouldn't make them look bad. This is not the action of a reputable company. If you'll read through Rob's report on the offer, you will notice that at least one consumer-complaint company did take Cash4Gold up on their offer -- which means that you are unlikely to be fairly notified of the problems with Cash4Gold. In other words, caveat venditor -- seller beware.