If you’ve read much of what I write about buying and selling gold, you know already that I’m not a big fan of the stores dedicated to buying gold. Although there aren’t as many as there were five or six years ago, they continue to pop up and then disappear. As the price of gold gets higher, they redouble efforts with ads in print media, on benches at bus stops, and big and garish banner ads on websites. They show up on late night television explaining how simple it is to send your gold to them and wait for a check.
As a licensed jewelry buyer and a third-generation jeweler, all of that makes me wince.
First and foremost, we’ll talk about money. At a gold store, you’ll be very, very lucky to walk away with anything close to fifty percent of the value of your gold. This is despite the fact that gold is such a liquid asset and you really ought to get more than that. I’m a businessman. I understand that the company needs a margin to pay their salaries and other expenses. Nonetheless, paying twenty-five to forty percent of the value of gold makes no sense.
Such numbers might make sense if the gold weren’t immediately melted down and sold for the spot price. In other words, the companies buy an ounce of gold for seven or eight hundred dollars, melt it down, and sell it for $2700 in next to no time at all. If they had to hold onto the gold for six months or a year, it would be a little bit more understandable but seriously… that kind of a margin for a pop-up store?
A big problem I have with the stores, more than anything else, is that many of them are deceptive. They don’t make any kind of commitment before they see you and when they see you, they weigh the gold out of sight and then make an offer without ever explaining why. They just take your chains or your ring or whatever, disappear, and come back to say, “Two hundred bucks.”
Why?
You ought to know how they arrive at that price. How can you make a decision without knowing? If you have gold to sell, take it to a licensed buyer who weighs the gold right in front of you and tells you why you’re offered the amount they come up with. I recommend a jeweler (like me) who is a licensed buyer and if none is immediately available, a reputable pawn shop.
Precious metal isn’t a complicated business, and there’s no excuse for how these places treat you. If you want to sell jewelry in San Diego, I hope you’ll give me a call or drop by my La Jolla showroom. If you don’t choose me, though, please avoid the gold shops and find another licensed buyer.
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