May 10 2009
How To Sell Gold Without Getting Ripped Off
When the economy is bad the value of gold tends to increase and even though the price of gold is no longer at record highs it is still going for over $900 an ounce. People tend to sell gold for many different reasons. You might just be looking to make a profit off that gold you invested in a few years ago, or maybe you have old gold jewelry you want to get rid of and make some quick cash, or maybe you need the money to pay your bills, whatever the reason it is a pretty good time to sell.
So now that you’re thinking about selling you have to figure out who you’re going to sell to. This will depend a lot on what exactly you’re selling. But unless you’re selling gold bars, valuable collectible gold coins, or antique well crafted jewelry, your best bet is probably gold refiners or scrap gold dealers. Pawnshops and jewelry stores are also viable options but they generally do not pay out nearly as much and that’s what we all want right?
What are gold refiners or scrap gold dealers you say? They are merchants that buy all types of scrap gold like gold chains, bracelets, necklaces, dental gold, gold bullion coins, and really anything with high gold content and then they separate the pure gold from the scrap metal and other waste materials and smelt it all down into reusable gold. You can usually get a better price for your gold than jewelers and pawnshops unless you’re trying to sell one of the aforementioned types of gold. I’ll bring up how to sell those in another upcoming post.
Okay now that we’ve established who you’re going to sell to you have to find the actually person or company to sell to. I’m sure everyone has seen one of those cash4gold commercials by now that advertise how easy it is to get some quick cash for your gold by sending an envelope full of your gold to these companies but it’s not that simple unless you want to get about 1/3 of your gold’s actual value. That’s right one third and sometimes even less. They will even acknowledge this by offering a bigger check if you can call them and get in touch with someone before they smelt your gold down. A lot of online gold refiners run a similar scam so be forewarned if you want to go that route. If you don’t believe me check these two complaints out here and here.
Similar to the cash4gold scam, companies have started ‘hotel’ gold buying parties where they give you the same old sales pitch to unsuspecting individuals. What’s worse about these scams is that many of these ‘companies’ will write a decent sized check but it will bounce and they will be long gone before you can get any money from them or your gold back. Gold Buyers of America is such a company that offers you, “a fun and easy environment with no pressure to buy or sell anything. We take pride in the fact we allow people to feel comfortable and safe by coming in for a private one on one consultation to evaluate the gold items they wish to sell.” Yeah I bet these people feel real comfortable when they skip town town with their money.
If you’d rather sell your gold without getting ripped off a much better option is taking your gold to local reputable dealer that should offer you around 80-95% of the price of your gold. An online refiner that I’ve personally dealt with is Midwest Refineries and they offer 95% of the gold value after smelting which is a pretty good deal.
Hopefully now you have a better understanding of how and where to sell you gold and you will be able to sell you gold for a good price without getting ripped off. If you have any questions just leave me a comment below. Thanks.
Midwest Refineries DOES NOT pay out 95% although they claim to. At best, one can expect 85-87%. Why.
In the first place, MW claims there will be AT LEAST a 4% melt loss. I don’t know how that is since one does not refine gold at its boiling point which is around 5000F (melts around 1900F).
Secondly, MW claims that, in violation of federal law, seemingly all gold certified gold is underkarated. So, for example, you sell the 18KT gold which is 0.750 pure, they pay you for 0.710 pure or a 4% loss. The same holds true for 10-14KT.
Add it up and, in the least, they will take 13% of what you send them.
Additionally, as in the case of any buyer who operates beyond your control, you have to take their word for the final weight of any scrap you send them. So, if you are a jeweler, dentist, or a dental lab and send them 100gms of 18KT scrap, they may claim that, of your 100gms, 30gms was non-gold “contaminants.” And how would you be able to prove otherwise?
Furthermore, some claim that MW claimed to have received less gold than what was sent to them. Who knows?
Finally, the BBB records only 4 complaints against MW in the last 36 months but no details are given. On the other hand, I wonder how many people realize that, using the 18KT gold example above, they are, at best, being paid 87% for their gold instead of 95% as advertised?
It seems to me that the seller is behind the 8-ball no matter what.