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Cash 4 Gold: Scam! Real Tips for Selling Your Gold Jewelry

by Flexo on February 3, 2009

in Consumer

Consumerist has pointed out a discussion on ComplainsBoard about Cash4Gold, an outfit that promises top dollar for trading in your gold jewelery. With the tight economy and gold prices relatively high, many consumers will find this a good deal. Unfortunately, it’s not that easy to get the true value for your traded in items. A former employee offers testimony about this particular company’s practices.

Here are some of the good bits.

We do offer a 100% Satisfaction Guarantee or your jewelry returned, BUT THE CATCH IS, that the guarantee is to contact us within 10 DAYS from when your check is DATED. (This begins with the time it took for the accounts payables dept. to ISSUE the check and also including the TRANSIT TIME for you to receive your check in the mail. **** NOTATE THE COMMERCIALS THAT INSINUATE THAT YOU GET YOUR CASH IN 24 HRS.*** If you request (sign) for FAST CASH (direct deposit) you automatically WAIVE your rights to have your items returned, EVEN if you are not satisfied with amount of your deposit.

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.

If you accept the offer, the deal is done, and you are told that the call is recorded (which most of the time, the record button does not work, or the box if full.)It’s just a way to make your feel binded by a verbal contract. IF you do not accept the deal, you have to return your check, and it takes sometimes up to a month to receive your items back after we receive the check.

All of the spelling and grammatical errors were in the original. If this story is true, and I suspect that it is, it is a shame that companies can get away with this behavior. If you must trade in your gold for money, find a reputable dealer in your area. Verify your choice with the National Association of Jewelry Appraisers or the American Society of Appraisers. And most of all, don’t expect to get “melt value” for your gold, but don’t get ripped off by an outfit like Cash 4 Gold, either.

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Tagged as: Consumer, gold, scam



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Flexo, the owner and creator of Consumerism Commentary, has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow him on Twitter.

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  • This is a great post. These commercials are on non stop and I have to believe they are making a killing because of it. I am not interested in selling my gold, but am intrigued by the business plan. Glad to see you had the time to look into it more to help everyone out.
  • They're making a killing? really?
    I've seen the commercials non-stop as well and find the preposterous.

    "Call us and we'll give you an envelope. Put you jewelry into out envelope and send it to us and we'll you'll get a check in the mall within 48 hours".

    Come on! People believe that!?
  • Carl
    From my experience, I shopped around via web. I shopped around locally. How much a gold buyer will pay out will depend on current prices. However, because of the volatility in the market now, some gold buyer prices will be base on fixed lower price others will use a real time based pricing structure. It helps to know in advance how much weight you have in gold. If you have a access to some kind of scales you can find out how much gold is in a 10k gold class ring, for example. If you have a gold bracelet, and it is not stamped 10k, 14k, etc, then a test is performed to determine this. Then you can use this calculator to get close idea of the value of your piece of jewelry. For example, a men's 10k gold class ring with some kind of birthstone, will weight about 5-7 pennyweights, depending on the ring size.

    I sold a 10k men's high school class ring and an 18k men's signet ring for combined amount of about $220 back in Oct 08.
  • Dan
    If everthing relayed by this insider is true, it's another example of the worst in human nature that greed brings out, especially when things get rough in the economy and people get desperate. I know someone who's been sellling off gold and they went to a few different jewelers with the same items and asked them to quote on what they'd take the gold for. The values were wildly different, but with the highest offer, they at least felt they were the most ethical/trustworthy. In all reality, they're probably still taking an enormous markup, but I'd venture to guess it's far and above what this ridiculous outfit is offering.

    For those savvy enough to figure out the actual gold content in their items with a simple conversion and the spot gold price, you should be able to estimate what your items are worth and call out any low offers.

    By the way, watch out for a Cease and Desist letter; it's pretty common these days (as I learned last year) when you criticize an outfit with unsavory practices.
  • Carl
    BTW, I would suggest to buy some gold coins or bullion with your cash payout such as American Gold Eagles or Canadian Maple Leafs. I used my cash payout and bought 2 x $5 Canadian Maple Leafs. The $5 gold pieces contain 1/10 of an ounce of gold. They are the purest, too.
  • Those commercials make me so mad.

    Send your gold to a refinery and you will get near the market value. I send in silver scraps (from my business) and never more than 16 ounces and generally get a check for several hundred dollars. Gold would net you much more than that.

    I use Midwest Refineries and they are super easy to work with.

    Places like Cash4Gold are just scam artists trying to take advantage of people's fears.
  • Kp
    Thank you for this article!

    I hate their commercials and it seems like such a ripoff. Now I know it's true.
  • VoiceofReason
    I'm curious how it's a scam? You send them your stuff, they send you a check. If you are unhappy with the amount you can send it back and get your stuff returned. What part of that is a scam?

    As for the consumer report article, most if not all of that has been explained and proven false. It's amazing how much negative stuff you can find about a place when you look.

    Also, keep in mind that you are reading nothing but reactions on the internet. Quick question, how many of you would write a blog/post about a company when things go well?

    Say you go to dinner, the waiter is awesome, the food is fantastic and the bill is cheap. Do you think "I'm going to go home and write an article on this place, tell everyone about it".....of course you don't.

    Now, if you go and you are very unhappy with the things that happen you are more apt to want to vent to the world.

    Same theory applies here, you are only hearing from the people that were angry enough to blog, noone hears from the hundreds of thousands of happy customers!

    They must be doing something right if they paid for a Super Bowl Ad
  • Really
    Really, I have left many a positive note on hotels, resorts, cars, etc. You must be kidding if you think this is a good deal. They can afford a super bowl ad by ripping off gullible people like you.
  • George
    They aren't doing anything right, they paid for the Super Bowl ad with all the money they ripped off from the poor consumers. They ought to be ashamed of themselves!!!. I hope they are exposed on a major news network. Reading stuff like this makes me so angry.
  • ycg675
    Most jewelery stores will give you FULL melt value (or even more) in store credit. If you are looking to trade in your old unworn jewelry for something you will ware, it is normally a decent deal. Just remember one thing, that the store credit is normally on retail price jewelry (an no one pays retail).
  • So called "voice of reason" ... it's the same way that payday loans are scams. Perhaps not in the literal sense of the word, but in the spirit of how they affect consumers.

    The amount of money a person gets back for their gold or silver items is ridiculously low compared to what it is worth. They are taking advantage of people's desperation.

    People should be more responsible for making better decisions, but if they don't know any other way to redeem their products for money then where else would they go but one of these gold for cash sharks.

    I wouldn't say they are doing something "right" just because they can afford a super bowl ad...that only proves that they've duped enough people to make their wallets fat.

    And by the way, I often write good reviews about companies that do a great job or have wonderful service. I make a point to do it because it is so rare to see great reviews vs complaints.
  • Ray Holley
    I get calls from people a couple of times per week who sent their items in to Cash4Gold and got teeny tiny checks back in the mail. They usually tell me that they know their stuff is worth more than that, and so far every one has been right. The last one I got was from a gal whose check from Cash4Gold was for less than $114. When she finally got her stuff back from them in the mail and sent it to us, we sent her a check for $356, and the spot price of gold was actually a little bit lower when we cut her check.

    Bottom line- Don't trust ANYONE who won't tell you how much they pay up front! Not even your local pawn shop! If they won't tell you over the phone how much they pay per gram or per pennyweight for net weight of pure gold, they will rob you blind, all with a smile on their faces.
  • martin
    what business are you?
  • Shawn
    There are several factors most people don't take into account when selling their gold or silver jewelry. Namely these involve local laws that the jeweler, pawnshop, or broker MUST abide by in order to purchase your precious metals. Depending on where you are located these laws vary widely. For example, when I buy gold from a customer I am required to fill out a form describing each piece I purchase (even broken and useless pieces) send that form to the sheriff's department, and hold onto the piece for 2 weeks before I can do anything with it. (some areas require that you hold the items a minimum of 30 days) The price of gold today is off by $28/ounce and we're only half way through the day. As a result most purchasers are forced to hedge themselves against what gold will do in the next few weeks so they don't take a loss on their puchase as well as making a profit at the same time. Because these are local laws they can vary widely from county to county giving some shops a competitive advantage over others and leading to wide ranges in the offered price to a consumer.
    In addition, who the purchaser sells to can affect their offered price as well. As a result of the Patriot Act and a lot of the subsequent legislation involving transactions of high dollar amounts, pawnshops and jewelers have become restricted to a smaller pool of refiners and dealers that they in turn can sell the gold to after they purchase it from a consumer. Bear in mind that each middleman takes a small percentage of every purchase so that they can in turn stay in business (our average on gold trends to around 7%)
    Finally, most people are unaware that a lot of old gold is actually underkarated. In the early 80's the government set national standards in parts per thousand for gold content to be considered a minimum quality. Prior to that, many manufacturers would simply round their figures up. 13.5 karat rounds up to 14kt and so forth. After this period many manufactures began stamping their pieces 14KP which stood for 14 Karat Plum (NOT 14 karat plate as some people incorrectly assume) The plum stood for plum gold or gold slightly higher in karat than the legal minum (in parts per thousand the legal minimum for 14kt is 583 parts pure gold per thousand whereas 14kt plum is generally rounded up to 585 parts per thousand) the difference between 14kt and 14kp was so minimal that it was hardly recognized though manufacturers added it as a good faith measure to their customers. The point is that gold prior to this period costs the jewelery store or pawnshop more because they are paying their customer for 14kt gold but are actually getting 13.5 karat out of the refined product.

    While all of this is good background information if you are interested in selling your gold or silver jewelry, nothing compares to having a jeweler that you know and trust. People have Doctors that they see regularly and wouldn't think of going anywhere else because they trust inherently the doctor's abilities and knowledge, I urge people to find a jeweler they are just as comfortable with. Most independent jewelers are better trained, more knowledgeable and more invested in the jewelry industry than most corporate stores out there. Find someone you trust and develop a relationship so that you don't ever have to worry about whether or not you've been scammed
  • Bubbs
    What is really hard to believe is that networks actually allow these commercials to air, knowing "Cash for Gold" is on the level with those Nigerian email money schemes. Scam business projecting itself as a reputable company, to people desperate to make ends meet at any cost. No way would I ever consider sending any gold to a company via mail. What if they claim they never received it? So while they pay below the fair market value to "customers", they turn a tidy profit. If the networks wren't so greedy for $$$ as well, they wouldn't even consider letting those commercials air.
  • Idiots that use Cash4Gold
    I GOT 4 DOLLARS FOR MY OLD KING TUTS CROWN! (ahem rip off)
  • TheLady
    The scam is proven when you have just had a 24 carat gold bracelet appraised at $1500 by a legitimate jeweler, then are stupid enough to send it to one of these gold scam ads ony to be offered $75 for it.
  • Nathan
    What Shawn said is exactly true. I own 3 "cash for gold" locations in malls, and while we pay considerably higher than Cash4Gold.com (and pay in cash on the spot), we don't pay anywhere near melt value.

    1) In my state, we have to hold the gold 30 days before selling it. A LOT can happen to market value in 30 days.

    2) No one - not even if you send gold to a refinery - gets 100% melt value. Especially on 10 or 14 karat, which is primarily what we buy.

    3) If we pay $500 for gold that turns out to be stolen, the gold is taken by the police and we will most likely never see our $500 back either.

    4) Underkarating is a BIG problem - Shawn hit it on the head. The worst example I've seen is a class ring made by Josten's, the largest "class ring" manufacturer out there, that completely failed a 10K acid test. By failed, I mean the acid dissolved the sample almost instantly. Discoloration would've meant that the piece was probably 8K; what this ring did indicated that it had virtually NO gold in it - yet it was stamped and sold as 10K gold.

    5) I have employees, rent, insurance, and yes - a profit margin. I don't buy gold for fun. This is a business, not a charity. All of you work for or even own companies that generate profit by buying low and selling high. Our business is no different.

    6) There is no end to the gold plated pieces people bring us. We rarely buy "fake gold", but when we do, it's straight loss.


    For these reasons and more, I (and no one in their right mind) am interested in paying even 50% melt value for your gold, unless you have quite a bit or I know you. For the scrap stuff we buy, I am happy (and almost all our customers are happy) with 40%. Cash4Gold.com sounds like they are paying between 10-15%.
  • Nathan
    By the way - you should trust "appraisal value" about as much as you should trust prices thrown out by auto dealerships.

    Case in point - a jeweler I know (who also buys gold and diamonds) appraised an engagement set with an extraordinary diamond for $15,500. The guy tried to sell it to me for $3,000. After talking to her and two other jewelers who buy gold, I was advised that no diamond buyer would even be interested in paying 3k BACK to me for the set, much less anything NEAR 15.5k.

    Appraisal value is about the most over inflated figure you can ever find. For gold, this is a formula to help you find the "market" value of your gold, though again, no one (not even a refiner) can or will give 100% market value.

    10k: (market price per ounce) x .417 / 31.1 x (your gold's weight in grams)
    14k: (market price per ounce) x .583 / 31.1 x (your gold's weight in grams)
    18k: (market price per ounce) x .750 / 31.1 x (your gold's weight in grams)
    22k: (market price per ounce) x .916 / 31.1 x (your gold's weight in grams)
    24k: (market price per ounce) x .999 / 31.1 x (your gold's weight in grams)

    *market price is for 24k, available for immediate delivery, gold bullion. 24k is 99.99% pure. 10k is 41.7% pure, 14k is 58.3-58.5% pure, just to give you an idea. So an ounce of 10k is not worth nearly as much as an ounce of "fine" or 24k gold.

    Believe any appraisal value you get for a strictly gold item that is higher than that, and you're fooling yourself.
  • Shawn
    Nathan,
    While an appraisal is important to ascertain the value of an item, you must remember that there are different types of appraisals, each with different purposes, and each with different values. Now most people would say "how can you have different values applied to the same item?" Most appraisals are done as insurance replacement appraisals. These replacements are with an exact same identical item as the original. In some cases, this can be considerably higher than simply the value of the metal and stones used in the piece, as labor cost can be a huge determining factor. (a 5ct bracelet set with 500 .01ct diamonds has an ENORMOUS labor cost) often times, these types of bracelets are made overseas where the cost of labor is much lower, however, because they are insured and replaced here in the States, we have to factor in the cost of recreating the piece to our own standards. (often this is the case with jewelry bought over TV or internet, the appraised value is high because they are bought in massive quantities from manufacturers in India or China but would cost a fortune to create on an individual basis)

    At issue here is the fact that the diamond market has dropped considerably in the past year when dealing with smaller, lower quality stones. Anything under 2cts has taken a nose dive in value because SO MANY people are selling them to make mortgage/credit card payments/living expenses which has overloaded the market with diamonds. On the contrary, high quality, large stones are selling at an all time high as wealthy investors are losing everything in the markets. (these are 10ct+ top quality diamonds for the most part) So I don't find it surprising at all that you would see such a drastic drop in diamond prices. After all, you can move the gold that you purchase within 30 days and make your money back that you shelled out. Diamonds on the other hand, may sit for a year or more which means that that money is tied up until you can sell the stone.

    As far as the appraisal is concerned, it is an unfortunate truth that there are some people out there who will overinflate the value of an appraisal because they believe that it makes an item easier for them to sell. This occurs in nearly every industry but because jewelry is a bit of an enigma to most consumers, they are often stuck taking the appraisal at face value. Just as in any major purchase, be sure to do the proper amount of research, if you are getting an appraisal, ask what the appraisers qualifications are. An answer like "I've been doing this 20 years" does NOT make them qualified to do appraisals. Check out www.Appraisers.org for the American Society of Appraisers website to get an idea of what to look for in an appraiser.

    Also, while your formulas are technically correct when it comes to the gold value of a piece, you are not factoring in at all the artistic value or the labor value. These can each be quite expensive depending on the type of piece you are looking at. Also, don't forget that any jewelry store has its own overhead to consider when selling any piece. Unfortunately, the lights, water, and paychecks of a store's employees don't simply pay themselves.

    Hope this helps
  • Nathan
    Agree that the secondhand diamond market is crap right now.

    Anyway, the formulas I gave are for use on gold only (no stone) pieces, and are intended to help people determine what their gold is worth at close to melt value.

    I maintain that appraisal values are pure garbage. And yes, expenses and labor costs are real factors, but unless a stoneless piece is absolutely extraordinary or unusual, the fact that it is "used" wipes out any value beyond the metal, IMO.
  • Shawn
    In todays market where there are almost exclusively sellers and practically zero buyers ANYTHING used (jewelry, cars, 401k's, houses even!) has seen such a dramatic drop that people's perceptions of value from just 6 months ago have been completely upended.

    In todays market the only value that is correct is what someone is willing to pay you for a particular item. However, keep in mind that a quick sale (i.e. cash in hand) will invariably lead to a lower sale price than if you have the time to properly shop/research the item.

    And as I mentioned, there are certainly appraisers out there that I wouldn't trust to place a value on a ball point pen. However there are also those who are fair, impartial, and professional, and until the average consumer insists on an appraiser who will properly value an item, nothing will change. After all, the insurance companies encourage the absurd values you mentioned. They charge higher premiums and they ALL have a clause which states that they can replace the item with an identical piece in lieu of a cash payment. With the insurance industry's buying power this is almost always the cheaper option for them while they collect the premium on an inflated value on the piece being insured. Borderline criminal but then... look at what AIG did of the course of the past year.
  • Michelle Swan
    Have you guys seen this? I've been following the company these days and this just came out

    http://www.earthtimes.org/articles/show/cash4go...
  • Adolfo Avalos
    Wow you just saved me a load of unneeded grief! There should be more people like you. Really appreciate your honesty.
  • emma kendall
    I shopped around! and got a great price from the manchester Gold Company.Here in the uk ITV news has featured gold buyers. They recommend that you pick an established name What you mean like the above company? or what about the High Street chain, established for 100 years thyat pays £4 a gram Don't make me laugh!!

    Pick someone who comes to the house, who sorts out your gold in front of you into the various carats. and who weighs it so you can see the weight. Don't go for the old rogues.
  • Dr. Rashmon
    We have something here in Canada called Dollars 4 Gold being advertised on TV. Considering the economic situation and my field of work, I decided to get rid of some gold I was no longer really using.

    I sent Dollars 4 Gold one of the items in my collection. It was a solid gold sarcophagus that once contained the body of the Egyptian queen Cleopatra. I wanted the money fast, so I opted for the quick deposit offer. After checking my bank account deposits, I noticed a deposit from Dollars 4 Gold for the sum of $379.75.

    I was very upset and called to speak to a rep. At first they offered me $800, to which I said I was hoping for a bit more. The rep offered me $1200 and said that was the best they could do. $1200 for a solid gold sarcophagus? Are these people crazy? I told them I wanted my item to be returned, but the manager told me that there is currently a curse on the sarcophagus and no courier or shipping company will agree to ship it.

    What can I do now?
  • George
    Good one Dr. Rashmon!
  • GB
    My Gold Envelope receives a D- rating from the Better Business Bureau. It is not BBB accredited, and it consistently misrepresents BBB affiliation. Please see the BBB website for details: http://www.seflorida.bbb.org/Business-Report/My...
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