December 5, 2008 – Pittsburgh, PA – Due to the rising price of gold and silver as of 2007, consumers have been targeted by companies and weekend only expos that advertise buying gold and other jewelry for cash.
The hype is significant and full page advertisements claim that these companies will pay top dollar for jewelry or gold that is no longer wanted, supposedly for little hassle and with cash upfront.
Here is what consumers need to know before selling their gold or jewelry for cash:
- The price of gold can fluctuate from day-to-day. As such, it is wise to take a piece of jewelry to several well established jewelry stores and ask for a price quote or estimate of how much the piece may be worth and then compare the offers. To ensure you are getting the best price for your jewelry, have it appraised before selling.
- Find out the karat and weight of your gold - pure gold is too soft to be practically used so it is combined with other metals to create durability and color. The Federal Trade Commission requires that all jewelry sold in the United States describe a karat fineness of the alloy: 1 karat equals 1/24 of pure gold by weight, so 14 karats would mean the jewelry was 14 parts gold and 10 part other metals. It is illegal for jewelry to be labeled “gold jewelry” if it is less than 10 karats.
- Understand the scales. The weight of gold helps determine its value. If you measure your jewelry on a home kitchen or postal scale it is important to understand that jewelers use a different measurement standard called a Troy ounce. A common U.S. scale will measure 28 grams per ounce, while gold is measured at 31.1 grams per Troy ounce. To add to the confusion, some dealers will also use a system of weights called pennyweight (dwt) to measure a Troy ounce while others will use grams. A pennyweight is the equivalent of 1.555 grams. Consumers need to be alert that a dealer does not weigh their gold by pennyweight, but pays them by the gram. This would allow the dealer to pay the seller less for more weight of gold.
- Keep in mind that just because a piece gets appraised for a certain amount, it is unlikely to receive the same exact amount for it - it may be anywhere from 10-20% less because the purchaser has to make a profit margin on the transaction.
- Beware of large advertised “Expos”- they generally rent out hotel rooms or meeting halls and advertise with a sense of urgency or limited-time offers, such as weekend opportunities only. The expos may claim that they pay the highest prices, but some local jewelers state that the expos may pay 1/3 less than local buyers.
- When selling gold, keep in mind that all transactions should be done in the open. If a buyer wants to take the jewelry or coins somewhere else or to a back room or to weigh, do not agree to do so. This is not necessary and should be considered suspect.
BE ALERT OF GOLD BUYERS WHO DO THE FOLLOWING:
- Dispute karats. Some disreputable dealers will try to persuade consumers that their gold is less karats than it really is. Identify and understand the karat value stamped on your jewelry,
- Combine karats. Don’t let jewelry of different karat value be weighed together. Some dealers will weigh all jewelry together and pay for the lowest karat value. It’s vital to separate jewelry by karat value.
- Undervalue offers. Some dealers know people are just looking for quick cash to put in their pockets and will offer money for the gold that is lower than the actual value. It is important to know the market price for gold and the weight and karat value of your jewelry to understand the difference between a good and bad deal.
For more advice you can trust from your local BBB on avoiding scams and fraud, go to www.bbb.org .
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