Home > Financial > Cash for Gold: What the Story?

Cash for Gold: What the Story?

By: Sarah Clark (ILEX) - Updated: 13 Jan 2011 | comments*Discuss
 
Cash For Gold Jeweller Oft Postal Gold

You’ve probably seen the adverts on TV – cash-strapped celebrities endorsing the latest way of making money by selling your unwanted or broken gold jewellery to make a fast profit. Rising gold prices have made gold a very profitable commodity, and since 2004 gold has almost tripled in value.

As there aren’t many commodities that have actually increased in value in the current climate, and because many of us are looking for ways to get our hands on extra cash, the popularity of companies who promise to buy your gold from you at ‘the best rates’ is increasing.

How do Cash for Gold Companies Work?

Most of the cash for gold companies work in the same way – they entice people into sending off their unwanted jewellery – for free – in return for a cheque which is promised to be with them very quickly. To be fair, consumers do report that the cheques they are sent arrive swiftly, but that’s not the real issue. The issue seems to be that when the anticipated cheques arrive, they are for sometimes derisory amounts and far less than the same weight in gold would be worth if taken to a high street jeweller offering the same service.

The cash for gold companies usually take the jewellery and melt it down once within about 14 days of sending the cheque, if you don’t argue with them about the amount they’ve offered you for your trinkets. They then sell it on, making a large profit.

Investigations into the Cash for Gold Business

A recent investigation carried out by Which? Money showed that the companies who advertise on the television were consistently the worst when it came to the amounts offered to sellers. They usually gave between seven and 12 days to object to the amount they offered for the jewellery, after which they would melt the gold down if the cheque wasn’t returned.

The Which? Survey found that the average amount that sellers were offered for their gold was just six per cent of the retail value - while the average price quoted by pawnbrokers was 17 per cent and high street jewellers tended to offer an average of 25 per cent of the retail value of the items being sold.

The Office of Fair Trading is planning to investigate cash for gold firms, and has requested information from some of the companies involved so that it can decide whether they are complying withal the relevant consumer protection legislation.

The OFT has asked for information about the companies’ on their business practices as well as an explanation some of the claims they’ve made on TV and online. The OFT is also looking at whether consumers’ rights to turn down a derisory offer are always being upheld.

At the moment, the consensus is that none of the companies are actually breaking the law until proved otherwise.

What to Do if You Want to Sell Your Gold

The market for the buying and selling of gold by post is unregulated – and there’s nothing illegal in what the companies are currently doing. As far as the laws is concerned, a company can offer you any price it thinks right for your gold, and it’s up to you whether you accept it.

A recent BBC investigation did find that if you’re prepared to haggle with the postal gold companies, you will almost certainly get a better offer. In one case, researchers haggled the company up to almost the same amount that a high street jeweller was prepared to pay – but this took four refusals. The golden rule is not to ever accept the first offer as you can almost certainly get a better one.

If you really want to get a better deal for your gold, your best bet is to use a high street jeweller – but failing this – haggle.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • Helen
    Re: What Are my Rights on a Faulty Television?
    Husband purchased a Polaroid tv from Asda in Sept 2019 for my birthday in October. This week it has stopped…
    20 January 2021
  • number plate history
    Re: Buying a Used Car: Your Rights
    Nice blog. In the UK there is a habit of having a personalized number plate so per person in a family can have a different…
    20 January 2021
  • Sheena
    Re: When Appliances Go Wrong
    I bought a fridge freezer online ten months ago and yesterday the freezer broke a and all my food defrosted and wasted. The company…
    19 January 2021
  • Mum
    Re: What Are my Rights on a Faulty Television?
    Hello, I bought a Samsung TV 49 inch Argus store two years ago, I didn't buy insurance I don't know what to do…
    17 January 2021
  • Samsung tv
    Re: What Are my Rights on a Faulty Television?
    I bought a Samsung TV two in 2018 in November, it broke after three days, it slowly faded and the screen went…
    15 January 2021
  • Andy
    Re: Leasing A Car Explained
    I have leased Fiesta diesel supplied with fitted dual controls used as a Driving school car. I have had it from new, the lease was 36…
    15 January 2021
  • Junaki
    Re: Dealing With Cowboy Builders
    Stefan from Gumtree. A so called plasterer. He skimmed my living room ceiling without prepping it and after a week it cracked and…
    13 January 2021
  • Alif
    Re: Dealing With Cowboy Builders
    Any recommended solicitors to launche a case against rogue builder that did not complete the job? The bit he did was unsatisfactory.
    8 January 2021
  • Mamatiger24
    Re: Experience Voucher Expired: Can I Get a Refund?
    I was given a virgin experience voucher in dec 2019. I have been unable to use it due to the covid…
    8 January 2021
  • netter
    Re: Am I Entitled To A Refund?
    Bought tv online 29th nov and then picked up instore for christmas present didnt open to check tv. Opened after Christmas which was…
    7 January 2021